Greetings!  

Americans are the most charitable people in the world. This isn't a generous exaggeration. The voluntary giving of the American people during times of need has been documented in many different studies. 

With an open heart and wallet, most people take it on faith that the bulk of their donations are going to the people who need it. What they sometimes find instead, much to their shock, is that a great deal of the money is consumed in transit - going to the calling centers collecting the funds. Or perhaps the organization is poorly run, amassing large cash reserves or entangled in punitive contracts. 

There are a couple of resources available to help sort out the ones that are efficient with donations: 

• Charity Watch - this 20-year old organization provides a newsletter three times per year which rates 600 charities in great detail. Basic information is available on their website (www.charitywatch.org), or you can subscribe to the newsletters for $50/year. 

• Charity Navigator - an online resource that reviews and rates 6,000 of America's largest charities (www.charitynavigator.org). There is no fee for their services.

Although you might give to charity without concern for receiving a tax deduction, if you want to take a write-off on your taxes, you'll need to follow the IRS' rules for documenting a charitable contribution, particularly if the value is $250 or more. These rules include: 

• If your contribution entitles you to a banquet, performance or sporting event, you are only allowed to deduct the amount that exceeds the fair market value of the benefit received.  

• You must maintain a bank record or confirmation from the organization for any donation of cash or other monetary gift. This record should include the name of the charity, date the gift was made, and amount. 

• If a gift of $250 or more is made, the IRS requires specific documentation.You'll need to have a written acknowledgement from the charity including donor's name (you), date of contribution, dollar value of contribution, and a specific mention about whether goods and services were received in connection with the donation. This statement must be included on your receipt in order to be acceptable to the IRS.  

By periodically reviewing the effectiveness of a particular charity and making sure you have proper documentation for your donation, you can ensure that your gift is properly credited on your taxes and that it goes as far as possible to help those in need.