Donate Wisely

Here’s how to pinpoint the destination of your contribution


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December 24, 2013
livemint.com
Vivina Vishwanathan


One way to give, is to look at business houses that have partnerships NGOs to address social issues

Giving should come easy. It’s a logical step. But so is wearing a helmet, or strapping on a seat belt. As Melinda Gates said, helping people doesn’t have to be an unsound financial strategy. Now, if you are one of those who are convinced of the logic behind giving, the next step is to convert that conviction into action.Here’s how to pinpoint the destination of your contribution

Places of worship are the most common recipients. But a new kind of destination giving is now gaining ground, especially among netizens. Smart packaging is also getting people to open their wallets. Of course, the traditional ways of donating are still there. But you also need to look at things such as credibility and how the amount is being utilized. We tell you how.

Pick right

The first task, after you have taken the crucial decision of sharing, is to decide whom to share with. Like with most other things, it’s good to take the advice of experts. One way to do this is to look at business houses that have partnerships with non-governmental organizations (NGOs) to address social issues. The advantage here is that you can piggyback on the research and due diligence that the big companies must have carried out before partnering with the respective NGOs. For instance, Aditya Birla Group works closely with 25 NGOs. You could make these your starting point. Then there are bigger NGOs that work with smaller, local NGOs. Says Vinodini Lulla, trustee of one such organization, Children’s Movement on Civic Awareness, on authenticity of NGOs: “We normally check whether the NGOs are registered and have all their documents in place. Then there are the personal connections that you may have; that is a word-of-mouth process.”

Another way is to look for accredited NGOs. Says Dhaval Udani, chief executive office, GiveIndia: “We have a thorough due diligence process and we do it on various parameters such as governance, regulations, financial accounting, etc., when we enter into a partnership with local organizations.” GiveIndia is a registered non-profit entity under section 25 of the Companies Act, 1956.

Another organization that is trying to formalize a system of judging an NGO’s quality is Confederation of Indian Industry (CII). It has a list of accredited NGOs and plans to rate them on efficiency. “We are working on the parameters on which the rating will be done,” says Piruz Khambatta, chairman, Rasna Pvt. Ltd, and chairman, CII (western region) CSR sub-committee.

Even if you plan to do the research on your own, the first step remains checking the NGO’s credentials, registration and legal status.

How it works

Once you have done the homework and chosen one or more entities to donate to, the next step is the mode of donation. This is the easy part—mostly, it takes just a few clicks with your mouse. You can write a cheque, use your debit card, make a phone call, or even use redemption points. Most NGOs also give the option of sending money through their websites. This process is similar to shopping online. The NGO website will take you to the payment options, and you can use your credit card, debit card or net banking to pay. Some banks, including State Bank of India, HDFC Bank Ltd, Axis Bank Ltd and Federal Bank Ltd, let you donate via their platform. There is a list of charitable organizations on the bank’s website, and you can donate to the one you choose using the net banking option. These banks also mention that a formal receipt for claiming income tax exemption will be dispatched. For instance, in case of Prime Minister’s National Relief Fund, the receipt will be sent to the address provided.

Some organizations, Child Rights and You (CRY) being one, give you the choice of donating over phone. It works like any other interactive voice response. You dial the number and follow the instructions. Keep your credit card and the phone, on which you will get the one-time password, handy.

Some banks even allow you to redeem your credit card reward points as a donation.

What are the tax benefits

Government encouragement for giving comes in the way of some tax benefits on monetary donations. Says Anil Rego, a Bangalore-based financial planner: “Salaried individuals can get tax benefit on donations but up to a limit.” Section 80G states such tax exemptions. For instance, you can get 100% or 50% deduction on the amount donated to certain entities. Under section 80GGA, you can get maximum deduction equivalent to the amount donated to entities involved in scientific research. Same goes for money given to political parties under section 80GGC. Remember that these tax benefits are only for those who don’t have business income. Once you have decided to share, selected the NGO, made the payment, and filed the receipt, don’t forget to pat yourself on the back for a job well done.

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