Donating money? Here's a guide for you

"I can't help it so I give it all away
What you give you get back. . ." -- The Scorpions

In Trichy, Sriram Srinivasan, professor of mathematics at the National Institute of Technology, helps educate the underprivileged and offers support to several children who are first-generation learners. He does much of this through an NGO (non-government organisation) funded by a group of his friends.

Meanwhile, in far-away Gurgaon, Indira Varadarajan works through the Rotary Club to help women in nearby villages learn vocational skills like tailoring, making pickles and cooking meals for corporate canteens in the

vicinity. And in Mumbai, Deepa Kshirsagar contributes regularly to Bharatiya Stree Shakti to fund the education of a girl child. She never seriously considered giving, till she saw the beneficiaries of the Bharatiya Stree Shakti outfit. Today, she funds the education of a girl child. "Rs 1,500 a month is not a big sum, but if I skip a few unwanted indulgences, I can manage to give for this cause regularly."

These are just three members of a growing tribe of 'regular' givers. They don't wait for calamities to strike; they find a need and they set about fulfiling it. They may not necessarily do this on their own, but often through organisations that are already in the field but unable to do much due to lack of funds. Some, like Srinivasan, inspire friends to fund NGOs. But we can't all be like him. Some of us may have the money and the inclination to give, but have no idea how to go about giving or even where to give. If you are among those with a willing mind and a full purse, here's a quick primer on how you can go about giving.

The cause

"One should first identify a cause that is close to one's heart, that one is comfortable with before committing to

contributing to it," says Priya Viswanath, chief executive officer, Charities Aid Foundation India (CAF).

This is something that works for Srinivasan. "I have been lucky to have had a good education and I feel that it is something that nobody should be deprived of. My association with an NGO is rooted in the fact that I identify with its mission. I spend most of my

free time working for it," he says. In fact, after allocating a portion of his salary to take care of his household needs and essentials, Srinivasan gives the rest to the NGO. Luckily for him, his wife and parents support him wholeheartedly.

There are charitable organisations in almost every field today. Whether you want to help rehabilitate mentally ill destitute women, provide free legal aid to labourers, or give free prosthetic limbs to the poor, there's an organisation out there that can use your money.

The organisation

"People tend to doubt the credibility of organisations they give to and that is natural considering the mushrooming of organisations that claim to be raising funds," says Viswanath.

Vivek Patel, a UK-based surgeon, gives only to the Prime Minister's Relief Fund these days because he had a bad experience some years ago. "I was supporting an NGO in Gujarat, which promised to be looking into the affairs of a Kutch village that was wiped out during the 2001 earthquake. Much to my horror, when I visited the village in 2003, I discovered that it was not being supported by the NGO I was giving to," he says.

There are also innumerable cases of charities misusing funds. In fact, the Council for Advancement of People's Action and Rural Technology (Capart), a grant-making body under the Ministry of Rural Development, has recently blacklisted scores of NGOs for this.

In the backdrop of such cases, the Sampradaan Indian Centre for Philanthropy (ICP) in Delhi mooted the idea of a body that would evaluate charities. But, says Pushpa Sundar, executive director, Sampradaan, "It was perceived as a negation of the very philosophy of volunteering." Though there was much opposition, the consensus after the debate was that evaluation was necessary.

Since there is no rigorous system of evaluation in place yet, it is up to you, the giver, to check the antecedents of the organisation.

Inspect their registration, the cause they support and, if you have the time, visit them. Another good option is to go through CAF, which validates all sorts of voluntary organisations. Though it is not mandatory for NGOs to opt for it, most find it a good way to benchmark their activities and get an accreditation of sorts. "As a fund raising and deploying agency, we have to be very clear about where the collected money is going and if it is being put to good use," says Viswanath.

Another way is to examine the composition of the board of directors or trustees of the charity. In general, no well-known person is associated with a shady organisation. (Of course, there are exceptions, but in most cases, the big names drop out if they find that the charity is up to no good.) The annual reports of the organisation are also useful indicators of how the money is being spent.

Follow-up

The best way to ensure accountability is your involvement as a donor. This is a critical factor in making sure that charities remain on course. Active participation will help you assess the organisation's ability to undertake the task it claims to perform. "We need to constantly look at how outfits are performing and how they are utilising the funds they have raised citing a particular cause," says Viswanath.

Kshirsagar, a Mumbai-based finance professional, adds, "It is easy to associate with a cause, but unless you see them work, you are never at peace about your money being put to good use." She supports Bharatiya Stree Shakti and is satisfied that she can actually meet the girl child whose education she supports. "I am making sure that I can see my contribution actually making a change," she says.

Payment options

So, you have the cash and you've found the ideal charity. Now, how do you give them the money? Mail a cheque or make a visit to give in cash. If, however, you aren't too sure which charity should get your money, you can give to a funding and distribution organisation like HelpAge India, CRY (Child Relief and You), Action Aid, Cancer Patients Association of India, CAF, GiveIndia and ICICI Communities, who will do the needful.

If you are a part of generation Net, try logging on to a donation portal like www.giveindia.org or www.icicicommunities.org, both of which list organisations and causes. They also promise 100 per cent secure payment.

Some organisations, notably GiveIndia,  also open payroll accounts with specific organisations for employees who wish to give. "The periodical deductions go into your charity account, from where you can decide on how to use them. If your organisation is not registered with us, you can fill in the details of the contact person  or the institution and we will be happy to get in touch," says N Venkat Krishnan, director, GiveIndia.

The returns

Yes, of course you gain in terms of satisfaction and good karma earned. But there are more tangible returns when you donate. For salaried individuals, tax breaks are available under Section 80G of the Income Tax Act. This comes into effect only when the organisation you give to is eligible to issue Section 80G certificates.

Donations made to the Prime Minister's National Relief Fund and the National Foundation for Communal Harmony are eligible for 100 per cent deduction without any qualifying limit. Donations made to the Prime Minister's Drought Relief Fund, Jawaharlal Nehru Memorial Fund and the Rajiv Gandhi Foundation among others are eligible for 50 per cent deduction without any qualifying limit.

If you donate to an approved local authority, an approved sports authority and other similar organisations, your donation is eligible for 100 per cent deduction if the amount donated is equal to or less than 10 per cent of your gross total income. And if you donate to private and religious charities, you are eligible for 50 per cent deduction if the amount is less than or equal to 10 per cent of your gross income.

More than money

Raghavendra Sarma, a chartered accountant, wants to promote the age-old tradition of Vedic mathematics. He has joined up with six other friends with the same passion, and together they have set up the Bangalore-based Ayurangan Vedic Maths Trust. "The charter was simple; we would take in children and adults who were interested in learning maths through this form and we would support them," says Sarma. So far, over 500 children have participated in these classes.

In Chennai, there's the heartwarming story of how two young women set up The Banyan to rehabilitate mentally ill destitute women.

Every city and town has its share of such people who set about making a difference. Then there are several initiatives like the Rotary Club, Lions Club and Round Table India, which do charitable work on their own or through local bodies and can use your money.

Or you could volunteer your spare time. S P Raman retired from a private sector company in 2004 as general manager and is an executive trustee in a temple. "I find the work spiritually rewarding," he says. Not only has he worked towards maintaining the temple better, the fund  deployment has also improved. "It has been a passion to be able to serve my community and I am paying it back in a small way," says Raman.

You don't have to be a Bill Gates or Warren Buffett to change lives. All you need is the willingness to give time, money and perhaps a little effort. As Varadarajan says, "Even as little as Rs 100 a month from individuals to support budding youngsters interested in studying helps in a big way." Just make sure that what you give really goes where you want it to go.

Donor's Guide

Go to a party and bring the conversation around to donations and charities and you're bound to hear a few hard-boiled types say that they give only because they get a tax cut. Thankfully, more people give because they genuinely want to help, or want to make a difference in some way.

However, do remember that giving is a major financial decision and calls for the same amount of thought that you give to monetarily remunerative decisions. Here's a set of questions that can help you get your thoughts in order and clarify your reasons for giving.

To give or not? Why give?

• To contribute to your community.
• Because you feel the need to repay a particular organisation.
• Because your friend does.

How much to give?

• Have you met your family's living, insurance, education and retirement expenses?
• How much can you spend on charitable giving without financially risking your savings?

Planned giving. How to do it systematically

• Should you consult a financial advisor about planned giving?
• What criteria will you use to decide if the money given is well spent?
• How will you know if your criteria are met?
• How much time can you spend on follow-up and evaluation of your contributions?
• Do you want recognition for this gift or would you prefer to remain anonymous?

Choosing the donee

• Where should you give?
• Should you give directly to the organisation or its volunteers or, should you give through a paid fund-raiser?
• Are you satisfied that the organisation will use your contribution well?
• Will another organisation be able to make better use of your contribution?

Timing. When should you give?

• Is there a good time of the year to make donations? Do you plan to do it during certain festivals or schedule it to suit your tax plan?
• Do you plan to respond to pleas for donations during natural or man-made crises like earthquakes, floods, riots and so on?
• Should you set criteria for funds used for donations made during a crisis?