With approximately 85,000 charitable organizations in Canada and more than 80 per cent of them reporting under $500,000 in revenue in 2015, there are a large number of groups across the country in need of support.

It can seem overwhelming when you have some money set aside and are looking to make a large donation. Asking the right questions and doing a bit of research will help provide a roadmap for ensuring your money makes an impact. You should consider your goals (financial and social), what sort of organization you want to support and what you ultimately want to accomplish with your donation.

Here we provide some insight into digging a little deeper into those considerations.

Lead With Your Heart

How much should you donate? The size of your donation is entirely up to you, but consider your personal financial situation and be comfortable letting go of the money.

Whether you are donating for financial or personal reasons, it’s important that your donation is going towards a charity or cause that you care about. People tend to find it more rewarding to donate when they have a personal connection to a charity. If an organization is devoted to advancing medical research for a disease that has touched your family or you strongly believe in the charity’s cause, you will probably get an emotional benefit out of the process in addition to your tax receipt.

Follow The Money

You’ll likely have more peace of mind if you know how your money is being spent. A respectable charity should be able to provide a breakdown of its financials, including the overhead expenses and the amount spent towards its cause. As with for-profit organizations, transparency is an indication of good governance.

While there is not a specific target ratio for splitting a not-for-profit organization’s overhead and charitable spend, you should feel like they are efficient with donated funds.

Targeted Vs.General Donations

An organization has a couple of options for putting your charitable donation to use. You can ask an organization to target your donation, putting it towards a specific medical research goal or social cause. Or you can provide them with a general donation to put towards whatever the organization sees as important, often known as “greatest need.” 

While a targeted donation will allow you to see the direct results of your donation, a general donation can be just as important if it helps an organization you care about keep the lights on. Some organizations have formal gift agreements for large donors, which can help with expectations and reporting.