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Some Charities Offer Sweet Perks to Donors. Should You Take Advantage?

Updated: Dec 08, 2015 1:14 PM ET | Originally published: Dec 04, 2015

Right about now, your in-box and mailbox are probably stuffed with year-end solicitations from dozens of nonprofit groups. The pitch: A generous gift will aid a good cause, cut down on your tax bill, and maybe give you a few extra perks.

What could you get? Art museums may bring you behind the scenes—the Tampa Museum of Art thanks $1,000 donors with tours of local artists' studios, for instance. Service organizations offer other kinds of access: $1,000 donors to CARE get invited to conference calls with the CEO.

"We've seen a big change in donor expectations," says Michael Nilsen of the Association of Fundraising Professionals. "Before, you would write a check, and that was the end. But now donors have the power to research their giving and select those organizations that will involve them and treat them the best."

If these benefits will sway your giving decision, you have three things to do.

Compare and Contrast

If a particular donor pitch looks enticing, check similar groups to see how it stacks up. (The richest rewards tend to kick in with larger contributions.)

Environmentalists in Northern California, for instance, might choose between California Trout—a $1,000 gift to the group gets you a backpack, invitations to conservation lectures, and access to its fly-fishing trips—and the Sierra Club, which gives $1,000 donors holiday cards and a limited-edition photographic print. (Contributions to the Sierra Club support its lobbying and advocacy efforts, and so are not tax deductible.)

Chicago financial planner Andrew J. Feldman cites one client who loves giving to the Lincoln Park Zoo, for instance, because its backstage tours let her feed giraffes and rhinos. Such unusual experiences are more common to large groups, Nilsen says: "Smaller nonprofits tend to give more tangible donor perks."

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Vet the Charity

Donor rewards don't necessarily mean good money management. So even if the benefits are sweet, make sure your dollars will actually support the charity's mission.

Use Charity Navigator, which vets nonprofits for accountability, or a similar site to see what share of a charity's income goes to programs. Avoid groups if it's below 75%, says Charity Navigator's Sandra Miniutti. Donor gifts often fall into fundraising expenses, she says; most established groups keep those below 10%.

Weigh the Tax Impact

Finally, understand how the perks might affect your tax bill. The IRS requires nonprofits to include a line on deduction receipts spelling out any value received in return, and it expects you to reduce your write-off accordingly.

If getting the full tax break matters to you, suggests New York City planner Robert Hayden, opt for perks that are more experience based and thus harder for a charity to assign a specific value to. Note that benefits that the IRS considers "insubstantial"—such as free admission or a logo-bearing mug—won't reduce your deductible contribution at all.

Read More:

10 Ways to Give Charity When You're Short on Cash
How to Avoid Year-End Charity Scams

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