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You see and hear the ads; your mailbox is full of letters and cards asking you to give. How do you know whom to give to? How do decide where your giving dollars go?
If you are like millions of Americans who are solicited through the mail or increasingly on line, you need to educate your self about the business of charities. Before you give, ask for an organization's annual report and take a look at who is giving and how much; what corporations/foundations give and what projects or causes are they supporting. Equally significant, look at who is on the charity's board and their other affiliations. Become informed about where the money goes and what portion of fund-raising dollars are paid to staff and how much goes directly to the charity for its mission. If an agency spends more than 25% on fund raising costs, ask yourself if that is reasonable.
From time to time take a moment to review charities, colleges and universities on Guide Star and Charity Navigator.
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.
Charity Navigator is a great site. Charity Navigator "rates" charities according to efficiency, percentage of fund raising, program, and administrative costs in relation to total budgets, dollars raised and income received. CN 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.
What should you gather from this? Both donors and organizations truly are stewards of the funds they give and receive. So, the next time you decide that you want to give or you are solicited to give; please due your own due diligence and find out how the organization is managed. You don't have to turn away if they aren't winning the race every year, but search your own value system and even question your pending beneficiary if you see something that you think is out of the ball park of reason.