GuideStar Recommends Five Simple Steps When Donating to Charity
Proactive Giving Is the Best Way to Make an Impact in a Cause You Care About
Taking a few minutes to look into the nonprofit that piques your interest can go a long way when it comes to making sure you are giving to the right charity.
In down economic times, philanthropy is more important than ever, and so is the hard-earned money of donors across country.
Washington, D.C.—December 17, 2012—It’s the time of year when many people donate hard-earned money to charities, and it’s also the time when nonprofits increase their fundraising appeals to take advantage of the spirit of the season. When faced with so many solicitations, how do you know which nonprofit deserves your money? The task of finding the best charity to support can be daunting, but it doesn’t have to be.
“It comes down to one word: research,” said Lindsay J.K. Nichols, GuideStar’s communications director. “Taking a few minutes to look into the nonprofit that piques your interest can go a long way when it comes to making sure you are giving to the right charity.”
GuideStar offers the following tips to help you get the most out of your end-of-year charitable giving:
1. Clarify values and preferences. What do you value? Do you have an artistic streak? Do you love animals? Do you want to support health research? Consider the type of charity that you’d have the best connection with—small or large; new or old; local, national, or international.
2. Focus on the mission. Missions are the lifeblood of the nonprofit sector. Make sure a nonprofit has an easy-to-understand mission that aligns with your principles and beliefs. You can look up a specific nonprofit in GuideStar’s database of more than 1.8 million organizations, or use the advanced search to find charities by category, size, and location. The mission should also be easily found on a nonprofit’s Web site.
3. Verify a charity's legitimacy. Let’s face it: there are sham nonprofits out there. And some charities that used to be exempt are no longer, because of the Pension Protection Act of 2006. Verifying that the IRS currently recognizes a nonprofit as a tax-exempt organization is imperative. A glance at a nonprofit’s report on GuideStar will answer this question. Nonprofits that do not meet IRS criteria are flagged.
- If the charity is not on GuideStar, ask to see its IRS letter of determination.
- If the organization is faith-based (churches and other religious nonprofits are not required to file with the IRS), ask to see its official listing in a directory for its denominations.
4. Get the cold, hard facts. Once you find a nonprofit that meets the requirements above, dig a bit deeper into the organization’s GuideStar profile, visit the nonprofit’s Web site, read its annual report, or look into its recent press articles or media mentions to learn more about its programs and how it’s spending donation dollars. A reputable organization:
- Defines its mission and programs clearly.
- Is transparent about its inner workings.
- Has measurable goals and uses concrete criteria to describe its achievements.
- Is open about programs and finances.
5. Trust your instincts. If you still have doubts about a charity, don't contribute to it. There are usually multiple nonprofits focusing on a similar mission, so find another nonprofit that does the same kind of work and makes you feel more comfortable. Reputable charities:
- Are willing to send you literature about their work or direct you to a website.
- Don't use pressure tactics and will take "no" for an answer.
How do you go about doing all of this? GuideStar created a Giving Season Resource Center to help both donors and nonprofits make the most of the giving season this year: http://www.guidestar.org/rxg/give-to-charity/giving-season-resource-center.aspx. Other resources include:
We are commonly referred to as a watchdog, but the truth is, we’re not. The fact is, we’re a nonprofit ourselves. We know that donors bring a variety of values to their giving decisions, so we want to display as much information as we can about a nonprofit without making judgments on your behalf.
- Last year we partnered with Hope Consulting on a project called Money for Good to explore donor behavior. We reformatted our nonprofit reports—the information you get when you look up a nonprofit on www.guidestar.org—based on the findings of that research to highlight the information you care about most.
- Check out the Quick View Summary at the beginning of a report to see at a glance if we have key pieces of information about a nonprofit. A green check mark means we have it. A yellow exclamation points means we don’t.
- If a nonprofit gives us all of the information we ask for, it receives the GuideStar Exchange Seal. If you see the Seal, you know that the nonprofit is fully committed to transparency.
- Check the summary and impact tabs for expert analyses of a nonprofit. You can see additional recommendations compiled by Philanthropedia, a subsidiary of GuideStar, on www.myphilanthropedia.org, and analyses of specific causes and organizations in GuideStar's TakeAction resource center.
- Remember that overhead—the ratio of how much an organization spends on administrative costs in relation to its total expenses—is just one piece of a much larger puzzle when assessing a nonprofit, and it certainly isn’t as important as impact. More here: http://trust.guidestar.org/2012/04/17/is-overhead-dead/.
You can find reviews for many charities from real people who have interacted on GreatNonprofits. These reviews also appear on GuideStar.
Charting Impact, www.chartingimpact.org
We also partnered with the BBB Wise Giving Alliance and Independent Sector to bring you Charting Impact, an initiative that enables a nonprofit to create a standardized report that addresses the organization’s effectiveness. Charting Impact reports are available at http://reports.chartingimpact.org/Participants.aspx.
“In down economic times, philanthropy is more important than ever, and so is the hard-earned money of donors across country,” added Nichols. “Be confident that the money you give is being put to the best possible use.” Check out our infographic about Choosing a Charity: http://www.guidestar.org/rxg/give-to-charity/tips-for-choosing-a-charity.aspx.