ASK KIM
Still Time to Research and Give to Charity
by Kimberly Lankford

I'd like to make some charitable contributions before the end of the year so I can take the deduction on my 2004 taxes. But I haven't decided who to give the money to yet. Do you know of any good resources that can help me decide which charities to support?

There are plenty of Web sites that can help you compare and research charities, but you may have more time than you think.

If you give to a donor-advised fund, you'll be able to donate your money now, get an income-tax deduction this year and take your time choosing charities.

Donor-advised funds are available at many mutual fund companies and brokerage firms, such as Charles Schwab, Fidelity, T. Rowe Price and Vanguard, and generally require an initial contribution of $5,000 to $10,000. For lower contribution limits -- and even more help with selecting which charities to support -- see if a community foundation in your area offers a donor-advised fund.

Donor-advised funds also make it easy to contribute stock or mutual fund shares, which can be complicated for some small charities to accept but can give you a bigger tax break if your investments have increased in value over the years.

If you give appreciated stock, not only will you get to take a charitable deduction, but you'll also avoid paying capital-gains taxes on the stock's gains. It's also a good strategy if you've held the stock a long time and are having trouble figuring out your cost basis.

Better yet, your gift can continue growing. Once you make your donation to a donor-advised fund, you can direct the proceeds to one or more of the fund's investment pools, which essentially operate like mutual funds. Most of the big charitable funds offer at least four investment pools, which typically range from aggressive portfolios investing primarily in stocks to conservative portfolios investing mostly in short-term bonds and money-market funds.

When you're ready to research charities, start with these Web sites, which rate charities by performance, fund raising and governance:

• American Institute of Philanthropy scrutinizes the numbers that nonprofits report on their tax returns, known as Form 990, reviews fund-raising pitches and other documents, such as audited financial statements. Charities that don't cooperate get an F. The best get A's. AIP currently rates 500 charities and updates its ratings three times a year in a guide called Charity Rating Guide & Watchdog Report ($3 for shipping).
  
  
• BBB Wise Giving Alliance is affiliated with the Council of Better Business Bureaus and currently rates about 500 charities. The BBB reports whether a charity has met all 23 of the BBB's standards, including effective governance, reasonable fund-raising expenditures relative to contributions and accuracy of solicitation materials. Its evaluations are based on a charity's tax return, audited financial statements and solicitation materials. You can read the charity reports at no cost on the alliance's Web site.
  
  
• Charity Navigator is free and analyzes 3,400 charities. Founded in 2002 by retired ad executive John Dugan, the group analyzes such criteria as a charity's fund-raising efficiency and administrative expenses and gives the charity an overall star rating. The site also offers peer comparisons and charity alternatives.
  
  
• Guidestar offers information about the programs and finances of more than more than one million IRS-recognized charitable organizations. Search for individual charities are causes. And view scanned Form 990s after a free registration. The site is maintained by Philanthropic Research.