Are you in a generous mood, but overwhelmed by the sheer number of nonprofits seeking donations? Here are 10 tips for choosing the right charity.
It’s no wonder that Americans are known as the most generous people in the world. In 2012, Americans donated more than $316 billion to charity, 3.5 percent more than they did the year before — and nearly three-quarters of the money that went to public nonprofits came from individual donors.
But while many Americans are eager to support their cause, with 1.5 million nonprofits in the United States alone, it’s not always clear which organization deserves to receive their money. To help figure it out, NationSwell talked to Jennifer Chandler, vice president and director of network support and knowledge sharing at the National Council of Nonprofits, a resource and advocate for America’s charitable nonprofits. Of course, the first thing you should consider is whether the nonprofit is fiscally responsible, she says. But beyond that, Chandler outlines five other key questions to ask before choosing a charity, as well as five “problems” that shouldn’t dissuade you from giving.
Things to Ask Before Donating
1. Do you believe in the charity’s mission?
“Does [the charity] match your interests, passions or concerns? Is it trying to solve a problem that you’re concerned about?” asks Chandler. It may sound obvious, but a charity’s mission and goals should align with what you hope to accomplish with your generous gift.
2. Is the organization accountable and transparent?
This is a broad question, but one that is tremendously important, especially in the era of email scams, which false charities with names that are strikingly similar to well-known organizations may use to trick well-meaning individuals.
So, how can you tell if an organization is legit? First and foremost, check to see if it has a website. “A nonprofit that has a website understands that most people will look for information about it on the Internet,” Chandler says. “Fundamentally, does [the organization] have the capacity to have a website to use as a portal of communication with you, the donor, and with others?”
Second, is the advocacy group using its website to post honest and accurate information about itself? Does it list its board and staff? Is there a way to contact the organization? Does it list its financials? Is it transparent about its tax status? All these questions are equally important, Chandler says, as they speak to the viability of a charity.
As far as tax status, Chandler says, check to see if the group has been designated as a 501(c)(3) charity by the Internal Revenue Service — 501(c)(3) refers to a section of the tax code concerning nonprofits. Chandler notes that the term “charity” can often be used to describe any socially good organization — not just public charities, which are tax-exempt nonprofits that receive a substantial part of their income from the public and use those funds to benefit the public. Public charities qualify for 501(c)(3) status from the IRS. While there are many worthy organizations that are not designated as public charities, the 501(c)(3) label can provide some level of assurance, especially for individuals who are looking to make a tax-deductible gift. “I’m always shocked when I’m looking at the website of a charitable organization and I can’t find whether or not it’s a public charity,” Chandler says. “When I can’t find it, I assume that it’s not.”
3. What exactly has the nonprofit accomplished?
How do you know if your chosen charity is doing what it set out to do? Some organizations post progress reports and their annual reports online (more on that later). Some use videos, photos or testimonials to showcase their work. Others make public their financial statements and the data they use to measure their effectiveness. “There are many ways to describe what [an] organization is accomplishing, what kind of difference it is making,” Chandler says, but the important thing to look for is that a nonprofit can clearly articulate its achievements to show donors what their gifts will do.
4. Can you get involved?
If you’re interested in giving time instead of money to an organization — both are equally valuable! — a great way to get a feel for a nonprofit is to check it out yourself. Call up the office and talk to a staff member about what the group does, or visit the website to see if there are local events that welcome participation. Being able to meet and talk to employees and volunteers will not only make you feel more connected to the organization and its cause, but will also allow you to determine if the organization fits your values and goals. “Research shows that if you’re already involved in a nonprofit — you volunteer or are familiar with it — you’re more likely to be a longer, tenured, loyal donor,” Chandler says.
5. Who else is giving?
We use word of mouth to help make decisions in almost every other area of our lives — choosing a charity is no different. Check out a charity’s Facebook page to see if you recognize the names of any friends, family members or neighbors on the organization’s friends list. Some nonprofits even list the names of their larger donors — individuals, foundations and corporations — on their websites or in their annual reports. If you see a name that you trust, you might feel more comfortable giving to that organization.
This article by Erin Skarda originally appeared on nationswell.com on April 17, 2014