Supporting charities has become easier than ever with more than a dozen ways to make donations directly from your smartphone. Unfortunately, the question of which charity is worthiest of your money has not become any easier. Today, we are seemingly constantly being asked for money from various organizations through advertisements, emails, phone calls, and more. How, exactly, do we vet these organizations before giving them money? How do we find new organizations that we may want to support if that vetting turns up some unsavory information? Below are a handful of important tips to keep in mind when choosing a charity to support.
Familiarize yourself with the resources.
The first step in choosing a charity is learning what tools are available to aid in the process. One of the most popular resources is GuideStar, which has records for 1.8 million registered nonprofits. For free, you can access Form 990s, IRS filings, and more. This information tells you about an organization’s income, spending, and even executive salaries. For a price, you can get a complete financial analysis of an organization, but the basic information is probably enough for most everyday philanthropists.
GuideStar does not rate charities, instead leaving it to donors to judge the effectiveness or overall quality of an organization. If you would prefer a “score” for a particular charity, you can turn to the BBB Wise Giving Alliance, which has reviews of 1,300 national charities and 10,000 local charities. The ratings look at 20 different benchmark standards, such as effectiveness and governance, and say whether the organization meets the BBB standards in that area. A charity that meets all 20 benchmarks is said to be BBB Accredited.
Another resource is Charity Navigator, which has a more quantified rating system based on four stars. The organization has evaluated about 7,000 nonprofits by looking at transparency, financial health, and accountability. When looking at scores, it is important to pay attention to the breakdown. Something that Charity Navigator considers a problem may not bother you, such as an operational overhead greater than 25 percent.
These three resources are not only good for vetting charities, but also for finding a new charity to support, because you can search their databases according to several different factors, from area of impact to geographic location.
Get to know your personal values.
Choosing a charity becomes difficult if you don’t know what you’re passionate about and what kind of change you want to see in the world. Take some time to reflect on what is most important to you and what kind of work you would like to see accomplished in that area. Then see if any nonprofits are actually spearheading that kind of work.
Some people are concerned about the environment, while others think hunger is a more pressing issue. Certain philanthropists concentrate exclusively on supporting healthcare and biomedical research, while others may be more interested in animal welfare. While you don’t have to limit yourself to one issue, you should know which issues interest you and which do not. Figuring this out will eliminate many possible candidates.
You may also want to think about whether you have a preference for a charity that works in rural or urban areas. Would you prefer to contribute to a small, local nonprofit or do you want to support the mission of a large, national or even global organization? Where would your ideal charity conduct its work? Some charities have a narrow geographic focus, while others may operate in several different countries around the world. One point to consider is that a charity with a narrow focus may have a greater impact on a specific community and thus allow you to see the impact of your donation more directly.
Take time to evaluate the charity.
Once you have determined your values and researched some potential organizations, take some time to do due diligence and figure out which will use your funds in the way you want. Explore the organization’s website and look for solid details and quantitative backing for the mission. Nonprofits should have clearly delineated goals and a system in place for measuring progress toward those goals. All achievements up to this point should be accounted for with quantitative data and evaluated using concrete criteria.
If you choose to compare multiple charities, make sure that you’re looking at two organizations that are doing roughly the same work. Comparing the overheard financials of an organization that works in a single city to an international nonprofit isn’t a fair comparison. Obviously, organizing multinational projects requires much more overhead. Similarly, looking at the project costs of an organization that funds AIDS research and one that builds wells in Africa makes no sense. Typically, major research studies require exponentially more cash than digging wells.
Familiarize yourself with the common warning signs of an illegitimate or mismanaged organization. If an organization does not have clear outlines of its programs and its finances, a red flag should go up in your mind. When these organizations refuse to talk about their finances or specific programs, then it’s best to pass on donating to them.
Organizations should also be open to communication and offer to send materials about their programs or direct you to online resources. An organization putting any kind of pressure on you to donate is another major red flag. Legitimate organizations will never pressure people into donating money.