You want to give back, and you want to contribute to an organization that is changing lives and improving the world. But sometimes it’s difficult to determine which organizations are worth investing in. It’s an understandable challenge – recent investigations into how a few national charities are spending their donor’s dollars have created confusion and distrust among even the most well-intentioned donors.
We’re here to help shine some light on how to put your donated dollars to the best possible use.
Our CEO Larry Cummings has a few tips to giving responsibly and effectively:
- How much of your donation goes to the charity? – If you receive an unsolicited call asking for a donation, ask the caller who they work for and what percent of donations are paying for fundraising expenses. Paid telemarketers often place these calls, which require heavy fees. Attorneys General in California and New York, which monitor nonprofit organizations carefully, report that less than half the money raised by telemarketers actually goes to the charitable causes donors seek to support.
- Give directly – A general rule of thumb is to donate directly to the charity itself rather than making a donation over the phone; site unseen. If you hear from a charity that you are interested in supporting, go to their website to make a donation or call them directly.
- Do your homework — Free resources such as Charity Navigator, Guidestar and Fraud.Org offer valuable and accessible information to determine the most trustworthy charity organizations. Some, like Charity Watch require a donation to access their database, and others like the BBB’s Give.org charge charities a fee in order to display the BBB logo. Other useful information can be found on The Federal Trade Commission’s website.
- Can you review their tax return? – Tax-exempt organizations are required to file an informational tax return each year and to make them available to the public upon request. Most legitimate organizations post their most recent 990 tax return on their website. However, they can also be found through Guidestar and Charity Navigator and can be a valuable source of detailed information about a charity’s activities. Among the things you can learn from a nonprofit’s 990 include:
- The Statement of Functional Expenses – how much is spent on programming vs. management vs. fundraising
- Highest compensated employees
- Net assets
- Know the organization you’re dealing with – There is a seemingly endless amount of charitable organizations out there. It’s easy to get overwhelmed by dozens of similar sounding names, each suggesting they’re doing good work. Know that not all nonprofits are created equal, and make sure the charity you are supporting is who you think they are.
- Consider supporting a federation – Federations like Medical Research Charities can offer an easy, safe way for donors to feel comfortable that their donation is going where it was intended, in addition to allowing your one donation to support a wide variety of charities.
Medical Research Charities sponsors organizations which, on average, dedicate 80% of donations to saving lives by advancing medical research. We’re selective, and we take our donors’ investments seriously. As a federation, one donation to MRC reaches 24 exceptional nonprofits. All of our research-based charities support innovative, important research to eliminate more than 30 types of life-threatening diseases, including cancer, Alzheimer’s, blindness, AIDS, and more.