Charity Ratings Tips
Read these 13 Charity Ratings Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Charity tips and hundreds of other topics.
Authentic Assets: Trusting the Best of Charity Evaluation
Trusting your instincts about giving to charity is the first step in becoming a benefactor. Trusting credible and authentic information is the next.
Guide Star provides a great deal of information including 990s, compensation, detailed descriptions of organization, leadership and board members. Guide Star lets you look back at tax returns for approximately five years. Guide Star has advanced membership levels beginning with a basic (and free) service to a fee based membership that provides you with additional information on specific organizations. Guide Star is truly comprehensive and includes any 501 (c) 3 that files a return. Enter the virtual world of more than 900,000 charity ratings by visiting: www.guidestar.org.
Charity Navigator (www.charitynavigator.org.) is a great site! Charity Navigator reviews charities according to efficiency, percentage of fund raising, program, and administrative costs in relation to total budgets, dollars raised and income received. Your “Guide to Intelligent Giving” has a star system with zero raising a red flag to all stars for those who efficiently operate from the financial perspective. Give a little room for some of the organizations that might rank low one year and then pull up the next. Based on how much funding is raised from year to year stars can vanish because fund raising costs might be the same, while an organization might simply have had a bad year for raising money.
Charity Watch is a charity guide program of the American Institute of Philanthropy. Charity Watch grades charities based on the amount of money expended on programs and the cost of fund raising. This giving report card provides contact information, financial performance and eligibility to receive gifts. Take a look at www.charitywatch.org and you will not only be able to assess how individual charities are performing, but also, you'll have the benefit of comparing organizations who are focused on the same causes! BBB Wise Giving Alliance is the result of a merger between the National Charities Information Bureau and the BBB (Better Business Bureaus) Philanthropic Advisory Service, this organization provides information on charities, their mission, programs and services, management and fund raising methods, tax status, financial status, administrative and fund raising expenses as they relate to program expenditures and total assets. When you delve into www.give.org you will also learn about the BBB's Charity Seal of Approval.
Generally Speaking: On the State Side
While a charity review is a must, it is also a good idea to review information about a charity from the state in which the organization is based. Typically the Office of the Attorney General is the venue for State oversight of charities. From New York to Alaska, offices that oversee charities on the state level also monitor registering and licensing. In New York State, all 501 c(3) organizations must be registered. Potential donors and foundations can go on line or phone to inquire whether or not the charity is current with financial reporting or if there are any violations of State laws or regulations.
Practitioners in fund raising such as fund raising consultants, telemarketers and grant writers must all register and be approved by the state as a provider. Charities who hire fundraisers who are not registered with the State are considered to be out of compliance.
If you would like to learn more about the process in your state, call or tap into the Internet site for your Attorney General. To take a look at registration documents for fund raising professionals who work with charities are in New York visit www.org.state.ny.us.charities/charities.html.
Armed with what is required on the state level, donors, charities or fund raising professionals become increasingly aware of the role they play in stewarding donor dollars and charitable assets.
Bonus Note: If you have ever wondered how those telemarketing firms that finally get through to you to ask you for support for your college, police benevolent organization, heart association or cancer society—take a look at “Pennies from Heaven” the annual Telemarketing by Professional Fund raiser review that the New York State Attorney General's Office publishes.
Regulating Giving
Income tax charitable deductions for gifts and property you have contributed to your favorite causes are just one way the government encourages supporting those charities that impact our world. Whether you are making a gift of $500 or $50,000, you often are reminded that your gift is “tax deductible".
When you take an income tax charitable deduction for supporting non-profit organizations, it is in fact the government's way of encouraging giving. This also acknowledges the role charities play in dealing with poverty, the environment, cultural life and the arts, cancer and other life threatening illnesses.
You can learn a great deal about how the U.S. government influences charitable organization's ratings by understanding more about the tax deduction process.
- The Internal Revenue Service provides a great deal of information on requirements for non-profit organizations; including how to establish a 501 (3) non-profit organization. Take a look at www.irs.gov to find links to non-profit information.
- National Association of Securities Dealers Regulators is a self-regulatory securities industry monitor and oversees the NASDAQ as well. Questions about securities gifts to charities or reviewing a charity's policies and procedures on gifts of stock, can be tapped into here. The NASD also has a cooperative program with government and industry organizations. Exploring www.nasd.com or www.nasdr.com will educate you in how to look at a charitable organization's ratings in relationship to their stewardship of securities gifts. Registered brokers/dealers, investment advisers are regulated by this Agency.
- The US securities and Exchange Commission (SEC) www.sec.gov helps administer federal securities laws, regulates firms engaged in the purchase or sale of securities, as well as people who provide investment advice.
Checking it Out: Charity Ratings and the Big Picture
If you are one of the more than 225 million Americans who made a gift or a number of gifts to charity last year, you might be more than a little curious about where your money goes and whether or not your generosity is making a difference.
Whether you are a modest donor who gives a number of smaller gifts ($50-$100) on an annual basis, or you are a major donor who regularly makes larger gifts ($500 or more)—it is wise to do a little detective work regarding your favorite cause. Remember, when looking at a charitable organization's ratings, you are looking at a number of performance issues including:
- Financial stability: is the charity operating in the red or is the budget balanced?
- What are the programs or services the charity performs?
- What is the ratio of income (including service revenue, grants, cash and stock gifts, endowment income) to expenses?
- How much does it cost the charity to raise a dollar? Fund raising costs should not generally exceed between 10-25% of the total dollars raised?
- Is their stability on the staff, administration and board or is it a revolving door?
- What kind of media attention does the charity receive? Are there stories rating the charitable organization relationship to winning grants, impacting children and families, improving the community; or is there controversy?
- Is the charity the sole provider of a particular program or service or do numerous agencies do the same thing?
Consult Charity Ratings to Judge and Compare Charities
There has been an increasing demand among nonprofit organizations themselves, donors to nonprofit organizations, and the government for increased reporting and accountability for philanthropic and other nonprofit organizations.
Several third-party institutions have emerged to collect and disseminate information on such charities, and to provide charity ratings designed to help you judge and compare charities based on operating metrics.
Charity Navigator
Charity Navigator is a premier, independent charity evaluator. Charity Navigator works to advance a more efficient and responsive philanthropic marketplace by evaluating the financial health of America's largest charities.
GuideStar
Philanthropic Research, Inc. is a 501(c)(3) public charity founded in 1994. PRI's mission is to revolutionize philanthropy and nonprofit practice with information. PRI does business under the name "GuideStar" and operates the GuideStar Web site to deliver nonprofit information.
GuideStar Reports are Web pages displaying information on single nonprofit organizations. The amount of information available on these mini-Web sites depends on each organization's participation level. The most active nonprofits provide information for their GuideStar Reports, upload documents, and post classified ads and new releases.
*GuideStar Reports can be found by searching the database and selecting one of the organizations on the search results page.
You have the Right to Information
Charity rating organizations seek to protect donors' right to information (including the right to be informed of the organization's mission and how the organization intends to use donated resources, and the right to know if the organization has the capacity to use donations effectively for their intended purposes).
You also have the right to be informed of the identity of those serving on the organization's governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities. You should:
• Be able to access to the organization's most recent financial statements.
• Be assured that the gifts you give will be used for the purposes for which they were given.
• Receive appropriate acknowledgment and recognition for gifts your give.
As a donor, you should be assured that information about your donation is handled with respect and with confidentiality to the extent provided by law, and you should expect that all your giving relationships will be professional. You also have the right to know whether those soliciting your donation are volunteers, employees of the organization or hired solicitors, and you have the right to ask for your name to be removed from mailing lists that will be shared.
*Most importantly and most generally, you, as a donor, should feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.
Rating Charitable Organizations and Donor Priorities
Every year Americans give trillions of dollars to faith-based, cultural, health, educational, disaster and international relief charities. With so many non profit (non governmental) organizations in the United States and abroad, how does one review charities that are worthy beneficiaries? So just how do you evaluate charities you would like to give to?
Generate:
- Whether you are an individual, corporation or foundation, your decision to support a specific charity evolves out of your own passion or life experience; a cause being introduced to you; or your awareness of critical needs in our world.
- Think thematically as you search those categories of charities you are fervent about in terms of values, mission and populations served.
- In addition to the virtual world of email, make phone calls, talk to people,
- Request materials. In today's society, phrases like download are time efficient but still leave room for the sense of connection that comes from receiving materials in the four dimensional world. Request brochures, annual reports, media clips and other samples of what the organization does.
- Ask others who have given to the organization about their experience.
- After a review of charities, you will be aware of the charity's strengths and challenges and be in a position to determine where your philanthropy will be directed and to what extent.
- Expect to be asked for a gift as fund raising professionals are expert at identifying donors. They also possess the gift of recognizing those who evaluate the charity in a big way have the potential to be major donors as well!
Donor Driven: Doing Individual Due Diligence
When you contemplate making a major or planned gift to your pet charity, what else can you do to ensure that your investment in a charity's future is received with a sense of responsibility and respect? Remember you give to the organization and not the individual who asks you, therefore, if the charity has made the financial grade, there are other strategies you might consider that will unearth how your entrusted assets will be used to advance the agency and its mission!
- Find your “honest broker”. Your honest broker is the one individual who looks out for your philanthropic interests now and in the future. A role captured by development expert, David R. Dunlop, the “honest broker” ensures that the charity's needs and the donor's passions are blended. The honest broker looks out for the donor's interests; understands the donor's financial position and assets and protects the donor's philanthropic dreams.
- Make a site visit; not a social call. While you may attend numerous charity fund raisers where staff don their party persona; visiting the charity's front lines will tell you much more about what is really happening beyond the charity's image.
- Get Vested. Givers make good board members and even better major benefactors. If your commitment to a hospital is strong; why join the Auxiliary board or the board of directors. If illiteracy overwhelms you, become a tutor. If the art world makes you see life as beautiful, become a docent.
Rating Charitable Organizations and Donor Priorities
Every year Americans give trillions of dollars to faith-based, cultural, health, educational, disaster and international relief charities. With so many non profit (non governmental) organizations in the United States and abroad, how does one review charities that are worthy beneficiaries? So just how do you evaluate charities you would like to give to?
Generate:
- Whether you are an individual, corporation or foundation, your decision to support a specific charity evolves out of your own passion or life experience; a cause being introduced to you; or your awareness of critical needs in our world.
- Think thematically as you search those categories of charities you are fervent about in terms of values, mission and populations served.
- In addition to the virtual world of email, make phone calls, talk to people,
- Request materials. In today's society, phrases like download are time efficient but still leave room for the sense of connection that comes from receiving materials in the four dimensional world. Request brochures, annual reports, media clips and other samples of what the organization does.
- Ask others who have given to the organization about their experience.
- After a review of charities, you will be aware of the charity's strengths and challenges and be in a position to determine where your philanthropy will be directed and to what extent.
- Expect to be asked for a gift as fund raising professionals are expert at identifying donors. They also possess the gift of recognizing those who evaluate the charity in a big way have the potential to be major donors as well!
Donor Driven: Doing Individual Due Diligence
When you contemplate making a major or planned gift to your pet charity, what else can you do to ensure that your investment in a charity's future is received with a sense of responsibility and respect? Remember you give to the organization and not the individual who asks you, therefore, if the charity has made the financial grade, there are other strategies you might consider that will unearth how your entrusted assets will be used to advance the agency and its mission!
- Find your “honest broker”. Your honest broker is the one individual who looks out for your philanthropic interests now and in the future. A role captured by development expert, David R. Dunlop, the “honest broker” ensures that the charity's needs and the donor's passions are blended. The honest broker looks out for the donor's interests; understands the donor's financial position and assets and protects the donor's philanthropic dreams.
- Make a site visit; not a social call. While you may attend numerous charity fund raisers where staff don their party persona; visiting the charity's front lines will tell you much more about what is really happening beyond the charity's image.
- Get Vested. Givers make good board members and even better major benefactors. If your commitment to a hospital is strong; why join the Auxiliary board or the board of directors. If illiteracy overwhelms you, become a tutor. If the art world makes you see life as beautiful, become a docent.
Checking it Out: Charity Ratings and the Big Picture
If you are one of the more than 225 million Americans who made a gift or a number of gifts to charity last year, you might be more than a little curious about where your money goes and whether or not your generosity is making a difference.
Whether you are a modest donor who gives a number of smaller gifts ($50-$100) on an annual basis, or you are a major donor who regularly makes larger gifts ($500 or more)—it is wise to do a little detective work regarding your favorite cause. Remember, when looking at a charitable organization's ratings, you are looking at a number of performance issues including:
- Financial stability: is the charity operating in the red or is the budget balanced?
- What are the programs or services the charity performs?
- What is the ratio of income (including service revenue, grants, cash and stock gifts, endowment income) to expenses?
- How much does it cost the charity to raise a dollar? Fund raising costs should not generally exceed between 10-25% of the total dollars raised?
- Is their stability on the staff, administration and board or is it a revolving door?
- What kind of media attention does the charity receive? Are there stories rating the charitable organization relationship to winning grants, impacting children and families, improving the community; or is there controversy?
- Is the charity the sole provider of a particular program or service or do numerous agencies do the same thing?
| Guru Spotlight |
| PJ Campbell |
