Tips for making your donation count
The end of the year means your inbox, social media feed and mailbox will start to fill up with giving requests from charitable organizations asking you to make a donation to fund their cause. It’s hard to say no, but how do you decide where your donation dollars will have the most the impact? We’ve done a bit of research for you, collecting tips from top charity watch sites to help you evaluate the organizations you support and take the stress out of giving this year.
- Is the organization a true nonprofit?
Verify the organization is truly a 501(c)3 nonprofit organization. The tax identification number of the charity should be visible on appeal materials and their website, and can be verified on the IRS website: https://www.irs.gov/charities-nonprofits/exempt-organizations-select-check
- Is the nonprofit’s financial picture transparent?
Look at the organization’s Form 990 to get a snapshot view of how the organization delegates funds. Here you will find fundraising costs, executive compensation, and program spending. This information is made public on sites such as Guidestar.com and ProPublica.org, or by asking the charity for a copy.
- Are there any complaints against the charity?
Take a look at the organization’s social media pages review section, speak to previous donors if you are able, or consult one of the charity watch sites, like GiveWell.org.
- Who’s running the organization?
Find out about the charity structure, governing board, executive committee, etc. How efficiently is the organization run? To what degree does the organization assign day-to-day management responsibilities? Does it have a tightly run executive committee or does it rely on the full board? How much turnover has the charity experienced of employees and board members in the last two years? Charities that are well run should be transparent about management.
If you don’t want to donate cash, many organizations have wish lists for everything from pet food to beds and generally always need volunteers!
- Donor communication
A charity should be able to clearly and articulately explain its mission and goals. Healthy organizations know who they are, what they do and why they are needed. Annual funding needs should be clearly communicated and follow-up on funded projects should be regularly communicated.
- How do you measure impact?
Charities know that you want to make an impact and that you expect transparency. Many will include a statement such as “0.79 cents of every dollar donated goes directly to the animals.” But there are other ways to measure impact. In the case of animal welfare charities, statistics are a great benchmark and many have these numbers listed on their website.*
- Trust your instincts
Ask questions and choose a charity that you believe in and will feel comfortable making a commitment to. By supporting an organization through economic downturns, good times and bad, you’re contributing to long-term sustainable change.
Below are the online resources we used for this article and recommend for more help making an informed decision and researching nonprofit organizations:
* The Overhead Myth: In 2013, GuideStar, BBB Wise Giving Alliance, and Charity Navigator wrote an open letter to the donors of America in a campaign to end the Overhead Myth—the false conception that financial ratios are the sole indicator of nonprofit performance. In a second letter, released October 2014, they invited the nonprofits of America to do their part to focus donors’ attention on what really matters: your organization’s efforts to make the world a better place. Learn more about this campaign at www.overheadmyth.com.