Making good decisions about your money doesn’t just involve budgeting and investing. You can help others by donating to a charity or supporting a crowd funding project. But make sure you check exactly where your money is going.
Donating to charity
With thousands of charities competing for your donation, do some research to make sure your money is being used for the cause you want to support. It’s important that you’re comfortable with the charity’s activities.
You may decide to make a regular, set donation or a one-off donation. You can also donate your time and skills.
Be careful who you donate to. Find out if a charity is legitimate by checking:
- where the charity is based, e.g. the business address
- that the person you are speaking to does represent the charity. Call the charity to check
- that donations are tax deductible. Donations to charities are only tax deductible if the charity has been endorsed by the Australian Taxation Office as a deductible gift recipient (DGR) organisation.
- the corporate registration number, such as an Australian Business Number.
Find out about the latest charity scams at the Government’s SCAMwatch website, www.SCAMwatch.gov.au.
Crowd funding is used by artists and entrepreneurs to fund their projects. Money is usually raised online, with people pooling their money towards a project.
There is no monetary reward for supporting a crowd funding project and sponsors are often enticed with a small gift such as a signed CD, free T-shirt or a discount on products in return for their support.
Most sites will have information on the project’s aims and objectives, how it will work and its budget. If you want to participate, you will need to nominate the amount you would like to pledge and the account the money will be deducted from.
Once the project has reached its target funding, your pledge will be deducted from your account. In most cases, only projects that raise enough money can go ahead. Most but not all sites return funds if the target amount is not reached. Check the refund policy on the crowd funding site before signing up.
If you’ve heard about a crowd funding project that you’d like to support, make sure you check its legitimacy first.
You should also try to find out as much as you can about the project and its owner before you sponsor them. For example:
- have they used crowd funding before?
- have they been involved in successful projects in the past?
- did they deliver the gift, if one was promised?
Donating to charity and contributing money to a crowd funding project can be a great way of showing your support. Just be careful someone isn’t taking advantage of your generosity.
Australian Securities and Investments Commission