The give and take of charities: there are tens of thousands of charities competing for donations and support. How do you decide which ones are worthy of your generosity? (Charities).

Publication: Choice (Chippendale, Australia)

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COPYRIGHT 2002 Australian Consumers' Association

IN A NUTSHELL

* There's now a fund. raising campaign for practically every day of the year and constant advertising from charities seeking your assistance. How can you check a charity's credentials (pages 16-18)?

* Can you be sure your donation will really be spent where it's most needed? We've profiled six of Australia's well-known charities to show how they use your money--pages 20-22.

* Even the joy of giving can be tainted by scammers. Some groups that claim to support charitable causes may not be as altruistic as they appear--see Try a little kindness?, page 19.

Large, modern charities closely resemble big businesses, with high public profiles and marketing budgets to match. Thousands of smaller groups, with names you may not even recognise, are also competing for your donation. How can you be sure you're giving to a 'real' charity? Will your donation actually be spent on the charitable cause?

Charities in Australia spend about $4 billion each year and employ around 133,000 people. Some are large, with familiar household names, and they're the ones we tend to support. By contrast, most have fewer than five employees and operate on annual budgets of less than $100,000.

Government funding, fundraising and revenue from commercial activities are the biggest sources of income for many charities, not donations from individuals. Even so, Australians donate around $3 billion each year and they volunteer millions of hours.

It's estimated that 11,000 currently receive government funding. We don't know how many more function without government support, relying solely on donations and volunteers. In fact, some make a point of not accepting government funding; see the profiles on pages 20-22 for examples.

HOW TO CHOOSE THE RIGHT CHARITY

How can you compare the 'worthiness' of the different associations, trusts, campaigns and other groups vying for your money and support? Is it better to give to a large, high-profile charity or to a smaller, lesser-known group?

This article should help you to identify the best places and ways to give. Consider the issues outlined here, read our profiles and use the Charities checklist, far right.

1. Is it the right cause?

Australian charities work for causes as diverse as animal welfare, environmental research and protection, health and medical research, Aboriginal issues, children's causes, services for the elderly, the arts, assistance for the mentally ill, those with disabilities, victims of drug abuse, child abuse and domestic violence, international aid and human rights. Others work in the more traditional areas, helping people to cope with hardship and poverty.

The sheer number of worthy causes can make it challenging to decide which to support. It's likely that most people end up supporting causes they're interested in or have a personal connection with. Once you know what's important to you, you can start to look at individual charities active in that area.

2. How do you know it's 'genuine'?

While the word 'charity' has a strict legal meaning dating back to 1601, we now use it to describe a broad range of associations, groups and campaigns that raise funds from the public for a particular cause. Some of the indicators that you're dealing with a bona fide charity are:

* It should be not-for-profit.

* Its principal activities should be for the good of the community, not for the benefit of its members or supporters.

* It might be registered with the Australian Taxation Office (ATO) as an income tax exempt charity (ITEC).

* It might be endorsed by the ATO or named in tax law as a deductible gift recipient (DGR).

Outcomes from the Commonwealth Government's recent Charities Definitions Inquiry should also make it easier to identify genuine charities. From July 1, 2004, the tax status of over 40,000 registered charities will become public information for the first time. You'll be able to access a charity's tax status via its Australian Business Number (ABN) using the Australian Business Register. From then on, if it's not income tax exempt or a DGR, there's a good chance it doesn't live up to the government's definition of what a charity is and should do.

3. Will you get a tax deduction?

It's estimated that around two thirds of all donations made by Australians aren't claimed as tax deductions. Since July 1, 2000, you haven't been able to receive a...

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