If you’re thinking of leaving a portion of your estate to a charity, it’s important to pay close attention to a few options long before writing them into your will. Experts warn against simply picking charities that you like without really getting to know how they work.
After all, you’re giving them a significant amount of money. You want to know what they do with the funds they have. How do they handle spending? What checks and balances are in place? What would they do with an influx of new money? Is it really going to be used for things that you support?
The best way to find out is to have a relationship with a number of charities. Get to know the way they operate. Have contacts you can talk to when you need to. Learn about other spending habits and the goals that were achieved.
In some cases, you may want to make smaller donations for a while, perhaps even for years. If you like what they do with $2,000 per year, there’s a better chance you’ll approve of the way they spend $20,000 — or more, depending on how much you’re leaving. You may even want to increase the amount you give on a regular basis to see how they handle the increase, as this can shed some light on what would be done with a true windfall.
As you do this, make sure you learn about trusts, direct giving, and all of the legal options that you have. The more you know, the more you can do to make sure your money is handled properly.
Source: New York Times, “In Estate Planning, Family Isn’t Always First,” Caitlin Kelly, accessed March 22, 2017