Year-end giving guide: Tips for making small and large donations, avoiding scams and other advice

December is the season of giving, and San Diego County is a generous place.

A recent report by Wallet Hub concluded that San Diego is the sixth “most caring” city in America. The ranking is an amalgam of several different scores, including how much residents volunteer, how much people help their neighbors, how many people work in community and social services per capita, and each city’s crime and poverty rates.

San Diego County also has thousands of organizations that help people — and help channel people’s generosity.

There are around 1,500 nonprofit foundations, 1,300 arts and culture nonprofits, 1,250 human service nonprofits, 550 animal services nonprofits and 450 health nonprofits, including hospitals, according to CauseIQ, a nonprofit intelligence platform.

If you are one of the San Diegans who gives, or wants to give, to a charity or a nonprofit before the end of the year, this guide has pointers for how to avoid getting scammed, how to involve your family in giving, when to hire help evaluating a charity and how a donor advised fund might be worth starting.

One note about tax law changes: Starting next year, under the 2025 Tax Trump Bill, charitable donations face different deductions. This will especially affect high-income tax filers.

For donations through the end of 2025, every dollar is deductible, up to caps. Starting Jan. 1, for tax year 2026, “only the portion of total charitable contributions above 0.5% of your AGI is deductible,” said a newsletter from Kiplinger, the personal finance publisher. It outlines several changes and provides some pointers for taking advantage of the current rules, before they expire.

Kristin Wiggins, the vice president of philanthropy at the Jacobs & Cushman San Diego Food Bank, and Chad Brown, a senior financial adviser with Millennium Private Wealth and a specialist in high-net-worth philanthropic giving, offered these tips.

1. Check 990s

Sometimes the decision to give comes down to a simple yes or no. Yes, you are familiar with the organization or cause. No, you have never heard of it, or you have heard bad things.

Like that crowdfunding platform where a guy is asking others to pay for his Disney World vacation because he wants “to have a really good life“? Or the person asking for an upgraded Xbox because “I’ve been continually attacked for the use of my xbox one and its time for a change“? Hard pass. (For other gutsy asks, check out reddit.com/r/dontfundme.)

But for the gray areas, several tools can help with vetting.

Many nonprofits are required to file a financial snapshot with the IRS on Form 990. These are sometimes available on their websites. If not, some third parties provide them. One is Propublica’s Nonprofit Explorer. Propublica is a nonpartisan investigative news outlet — also a nonprofit — that makes documents, including 990s, available for scrutiny. The link to that tool is here: projects.propublica.org/nonprofits.

With that in hand, look for stability in leadership, mission, vision, Wiggins said. Also, look at the ratio of funds raised to program or administrative expenses. A nonprofit should spend far more on its programs than on executive retreats to St. Kitts. The average ratio of fundraising to program costs is 80%. The food bank’s ratio is higher, at 92%, Wiggins said.

Overall, look for long-standing trends, she added. A departing CEO, a change in vision or a sudden drop in funding can coexist with a well-run, effective and impactful nonprofit. But if things are consistently chaotic, consider donating elsewhere.

(Nonprofits with small revenue file a different, simpler version of the 990 Form, called Form 990-N, or e-postcard. Churches and certain other nonprofits are exempt from filing 990s.)

2. Get a first, and second, opinion

For further vetting, Wiggins pointed to GuideStar and Charity Navigator, which assign scores to nonprofits. Charity Navigator is a nonprofit. GuideStar sells reports and data, but even the free snapshot score offers a useful glimpse.

With Charity Navigator, “you’re looking for a four-star rated charity,” Wiggins said. GuideStar, now named Candid, provides a transparency seal that ranges from platinum to bronze. “Platinum is where you want to be,” she said.

Brown shared one more way to vet a charity: Reach out and ask.

“Most nonprofit organizations have staff available specifically to answer donors’ questions, and I recommend talking to them before making a major gift,” he said.

A request to donate should never feel rushed, Brown added. “Scammers frequently claim an urgent deadline,” he said. But “a reputable charity,” he said, “is going to take your money anytime.”

Brown shared a few more guidelines for avoiding scams: Don’t trust your phone’s caller ID, and don’t make donations via gift cards, wire transfers or cryptocurrency.

3. Hire someone to do the homework

If your company is sponsoring a Little League baseball team, you probably know how the money will get spent: jerseys, trophies, team photos.

But if you have a less concrete goal or cause in mind, you’re not sure how or where to contribute, asking for professional help can make sense.

In his role as a financial adviser, Brown helps his high-net-worth clients decide how and where to contribute.

“My clients usually come to me with the cause, and then we help them drill down on the best way to satisfy their goals for the cause,” he said.

The larger the gift and the more niche or potentially obscure the cause, the more it makes sense to outsource vetting.

“If a client wants to build affordable housing in Nairobi, we’re probably going to reach out to some specialists,” he said.

Large donations also warrant this kind of careful vetting, Brown added.

“I think for seven-figure gifts, we’re definitely seeing more and more clients utilize specialist firms to vet organizations on their behalf,” he said.

4. Make kids a part of giving

Giving to charitable causes is a way to make an impact on the world and leave a legacy. And the sooner parents involve children in their philanthropic endeavors, the better, Brown said.

“It gets everybody on the same page,” he said. “Starting early helps parents — everybody in the family — to understand their shared values.”

Wiggins said donors can bring their children to the table by having a conversation around goals. “What impact do we want to have?” the conversation could start.

“This idea of involving your kids is so important because you’re modeling generosity and teaching compassion and empathy,” she added.

She brought up an example from her own home. Through a local Rotary club, her family, over the years, has “adopted” families or children during the holidays — as a way to give gifts and meet specific wants or needs. Last year, her family chose to provide for a child whose age matched one of her own sons. She took that son shopping and invited him to pick out items.

“It was something as simple as that, where the boy had asked for a Minecraft plushie, but I left my son pick out the one he thought (that child) would like the most. And we wrapped the gifts together,” she said. She told her son about the organization and the reasons they were making this gift, and her son “felt good about being part of that.”

5. For added tax benefits, consider donor-advised funds

Heading to a nonprofit’s website and clicking the “donate” button is an easy way to give.

But what if you want to donate more than $10 a month, or more than $10,000 in one go? What if you want to set up a philanthropic system to give to multiple causes, or consistently share part of your wealth with others?

“I am a big fan of donor-advised funds, for a variety of reasons,” said Brown. In a nutshell, donor-advised funds, or DAFs, are “basically smaller, more nimble cousins of private foundations.”

Wiggins, with the food bank, said these funds are increasingly popular.

“The biggest trend that we’re seeing is a growth in donor-advised funds,” she said. During the recent record-long government shutdown, Wiggins said “a significant number” of donations came to the food bank through such funds. People “saw a particular need in the community” and made contributions using money they had previously put in their fund.

These funds allow “investors to donate directly to a charitable fund while retaining some control over the assets. Donor-advised fund administrators are public charities that qualify as section 501(c)(3) organizations,” Morningstar, the financial services firm, writes in a guide on these funds. “That means donors can benefit from an immediate tax deduction when they contribute cash or other assets to the fund.”

Contributions are irrevocable, but the donor “retains an advisory role over how to invest the assets and how much to contribute to various charities over time. Any remaining assets benefit from tax-free growth as long as the account remains funded,” Morningstar said.

One key difference between foundations and DAFs: Each year, foundations must file tax returns and distribute at least 5% of the previous year’s average assets, while DAFs do not have these requirements.

An added benefit to DAFs: They protect investors, because the organizations that can receive contributions are vetted, Brown said.

“Giving directly from a donor-advised fund can help people feel confident that their gift is going to a legitimate charity, because DAFs can only make grants to charitable organizations that are recognized by the IRS,” he said.

According to Morningstar, tax benefits are a key benefit of DAFs. Donors contributing cash can take a deduction of up to 60% of their adjusted gross income, while those contributing securities or other assets can result in a deduction of up to 30% of the AGI.

One drawback: They typically require a large up-front investment, and financial service providers charge administrative fees that often shrink as the amount invested goes up.

6. Small and mighty

Talk of major gifts shouldn’t make any donor feel his or her gift doesn’t matter.

“At the Food Bank, we have just short of 4,000 donors who give monthly. Most of the gifts are $5, $10, $15, $25 a month. People don’t think of themselves as necessarily ‘philanthropists’ at that level, but collectively, there is such power in that,” Wiggins said.

Those 4,000 donors who give monthly add up to more than $2 million annually. Not only is that a lot of money, but it is a predictable flow of income, she said.

“We can plan for that. We can feel confident that we’ll have that revenue moving forward, and it helps us be more effective,” she said.

Wiggins shared a closing thought.

“From my perspective, philanthropy is joyful. The process of giving … makes people feel good, right? You feel good when you give, and you know you’re helping something that you care about. … There’s a lot of things we can’t control in the world and in the community, but we can give in order to try and help make our community better,” Wiggins said.