Are you looking for a charity to support? Increasingly complex non-profit financial structures and an increase in the sheer number of such organizations mean the competition is fierce for your charitable dollars.
If you hope to give a charitable donation to a favorite cause, do your homework before making a final decision. Use these tips to help select the best charity to receive your money.
Do You Feel Strongly About the Cause?
One of the first things to consider when selecting a charity to support is how strongly you feel about the cause. Donating money to a currently popular charity working for a cause that you don't really feel connected to, or one that a friend or colleague is urging you to support, may leave you feeling unfulfilled if you don't believe in the work and goals of the charity.
Start by making a short list of causes you're passionate about, then look for charitable organizations that support those causes. If you're having trouble finding an organization to support, take a look at websites like Charity Navigator, which may help you narrow down your list.
Is the Charity Mission Stated and Supported by Research?
Transparency, validity and effectiveness are important factors in selecting a charity to receive your donations. When researching potential charities, consider their mission statement. Is the purpose of the charity clearly stated? Does it exist to provide a valid service, or fill a recognized and legitimate need? How well does it meet these needs? Ask for academic or government research, studies, and reports that show the cause of the charity is a valid concern. This will help you to confirm you'll be supporting an organization that will make a valuable impact.
Organizations like Give Well, and even the Better Business Bureau's Charity page provide detailed reports on these aspects of non-profit organizations and can be useful sources of detailed information to help you make an informed giving choice.
Pay Attention to Expenses and Overhead
Once you find a charity that interests you, take a look at their financials. Access the organization's tax information by reviewing their IRS filings, including their Form 990, which will show details required for a tax-exempt non-profit organization. The website guidestar.com publishes most organizations' financial filings for free.
A Form 990 shows a charity's income, spending, mission and the salaries they paid to their executives. While you want to confirm that this is a viable and financially sound organization, be cautious of depending on financial data as the only evaluation tool to choosing a charity.
In the past few years, much attention has been given to the overhead ratio of charitable organizations, with a focus on how much of each charitable dollar goes directly to the people/cause the charity supports. Recently, leaders at three large nonprofit information sources denounced this practice as the sole deciding factor for donors in selecting a cause.
Has the Charity Been the Subject of an Investigation?
If a charity has been the subject of an investigation, this could be a red flag that there are financial, reporting or even criminal issues surrounding the organization. The sites listed above will often provide information about the legal status of an organization. You should also conduct an internet search of the organization: something as simple as typing the name of the organization and the word "investigation" can be a good place to start.
The Bottom Line
When it seems like new charitable organizations are popping up on an almost daily basis, it can be difficult to select one. The first thing to do is to select a cause you feel strongly about, then research the charities this support the cause. There are several websites that provide detailed information on charities.
Review the mission statement of any charities you are interested in to confirm their purpose is clearly stated and the cause is legitimate, and validated by government or academic research. Study their financial statements to confirm the organization's money is well managed. Finally, do a quick internet search to see if the charity has been the subject of a financial or criminal investigation.