Sunday, April 30, 2017 | 2 a.m.
You don’t have to wait for the holidays to give to a charitable cause — the need exists year-round. But with so many charitable organizations from which to choose, how do you decide where to give? And how can you ensure that your contribution will be put to good use?
Here are some pointers to help you pick a charity, using both your heart and your head.
STEP 1: Pick a focus
Whom do you want to help?
• What causes are important to you? Children? Veterans? Animals? Pick a mission that matters to you.
• What are your objectives? Donating to subsidize mammograms for low-income women, for example, may feel more fulfilling than donating to an umbrella cancer charity.
STEP 1.5: Decide on size
Smaller organizations often face more difficulty raising money than big organizations with significant name recognition and substantial marketing budgets. However, smaller organizations also may need more scrutiny, as they are less likely to be in the public eye.
• Do you want your donation to serve only people in your community? A smaller, local or regional charity might be your best bet. (Think PTAs, rec centers, local homeless shelters or animal rescue organizations.)
• Do you prefer that your money remain in the United States or be used internationally? Reputable charities will be transparent and specific about the populations they serve.
STEP 2: Confirm the organization’s legitimacy
American generosity
Charitable giving continued its upward trend in 2015, with an estimated $373 billion donated by Americans. Individuals gave $264.6 billion of the total, or 71 percent. They gave to:
• Religion: $119.3 billion (33 percent)
• Education: $57.9 billion (16 percent)
• Human services: $45.2 billion (12 percent)
• Gifts to foundations: $42.3 billion (11 percent)
• Health: $29.8 billion (8 percent)
• Public-society benefit: $7 billion (7 percent)
• Arts, culture and humanities: $17.1 billion (5 percent)
• International affairs: $15.8 billion (4 percent)
• Environment/animals: $10.7 billion (3 percent)
• Other: $6.6 billion (1 percent)
Research the group’s reputation with trusted organizations that compile information about charities. Options include:
• Better Business Bureau’s Wise Giving Alliance
If you’re considering giving to a faith-based organization, search:
• Evangelical Council for Financial Accountability
If a charity is not listed, ask to see its letter of determination, which is an official legal document that proves that the organization is tax exempt. It’s also smart to do an internet search of each organization.
STEP 3: Scour the organization’s financials
PRO TIP
CharityWatch recommends that at least 60 percent of donations go to charitable services rather than administration or fundraising. However, 7 of 10 nonprofits nationally spend at least 75 percent of revenue directly on programs.
• Read the charity’s tax-filing documents, or Form 990. The documents will show how much of a charity’s income goes toward programs and what percentage is spent on administration and fundraising.
Form 990 filings are available for free online from a variety of websites, including GuideStar, Foundation Center (foundationcenter.org/find-funding/990-finder) and ProPublica (projects.propublica.org/nonprofits)
• Read the organization’s annual report, which should be posted on the group’s website, to review financial information and client outcomes. Keep in mind: Does the annual report inspire you?
It should.
STEP 4: Pick up the phone and call
Administrators at any charity should be happy to spend a few minutes on the phone with you answering questions about the organization’s programs, goals and finances.
• Be wary of cold calls that solicit charitable donations. If you receive a call from a group you’d like to support, don’t donate right away. Instead, hang up, find a website or phone number for the group, and donate that way. (The same is true for unsolicited emails.) That will protect you from scams and could prevent a portion of your donation being siphoned off to third-party telemarketers.
Ask about a donor privacy policy
You may not want your information traded with or sold to others. Reputable charities typically allow donors to request that their name and address not be shared.
Other questions to ask a charitable organization
PRO TIP
A charity’s unrestricted net assets should be no more than three times the previous year’s expenses or three times the current year’s budget, whichever is higher, according to Wise Giving Alliance. Charities should be putting the money they collect to good use, not sitting on it.
• What is your organization’s mission?
• What are your organization’s goals?
• What progress is your organization making toward its goals?
• Is the mission supported by academic research?
• How does your organization evaluate itself?
• What sources are available to increase my confidence in your work?
A reputable charity will …
PRO TIP
When comparing charities, be sure to compare only organizations with similar missions, especially when looking at financials. The type of work a charity performs can affect its operating costs dramatically.
• Clearly define its mission and outline its programs.
• Send you literature about its work and/or direct you to a website.
• Have a working phone number and a legitimate street address.
• Discuss its finances.
• Have measurable goals.
• Use concrete criteria to describe its achievements.
• Take no for an answer.
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