Giving to charity is a worthy endeavor. Sharing the wealth with those in need is beneficial to giver and receiver alike. Unfortunately, as this world becomes more and more steeped in poor decisions and uber selfishness we are finding an increase in the bogus charity arena. Therefore it is vastly important that you become an educated and responsible giver.
While here you will learn to spot the signs that a charity may not be legit. This will enable you to do the good deeds your heart demands of you while actually reaching the people you set out to help. It will also save you the heartache of discovering you have been scammed and the money you devoted to orphans was really used on Michael Kors purses.
Investigating Your Charity Options
While you may not be performing a landlord credit check, you are investing time and energy to make sure that the organization seeking to utilize your assets is worthy of that sacrifice. Just like that landlord, you don’t want to allow someone untrustworthy into your wallet and home. Here are some tips to determine whether your charity of choice is deserving of your devotion:
- Investigate government reports: You need to find out about the organizations Form 990 (more info here). This is the paperwork that tells you how the group intends to use its money. Some charities will charge you a fee to view the paperwork but if you are really trying to find out about them you should be willing to risk that nominal fee rather than all the other monies you had considered investing. And, don’t be tricked by the group that offers to provide you with their tax-ID number; you could get one of those yourself!
- Pay attention to marketing: Sometimes bogus charities will utilize emotions to fuel your desire to participate. They will readily make you cry with their imagery and “documented” troubles. However, if they don’t explain what they are planning to do to alleviate the problems they employ to move you to tears, be skeptical. If they are asking for your funds they should be telling you what they intend to do with them.
- Review financial statements: While the Form 990 should provide you with plenty of numbers to alleviate your concerns, it is often buried deep within the multitude of pages. If they will allow you to view their audited financial statements that’s great. Since they aren’t required to provide that information you might have to dig deeper within your state to access it. Besides, if they won’t provide their financial statements that’s probably a big red flag (find more red flags here).
- Know the percentages: Looking at financial documents might be challenging. So, knowing that an organization should be investing 60% of its funding towards programs and services can help. Of course that’s not a rule, every organization has overhead and administrative costs. However, a good charity will allow you to delineate where your money will go.
- More than numbers: While the money you are investing is a big part of your decision, organizations cannot be run by money alone, people are involved. That’s why it is in your best interest to take a look at the board of directors (here would be a great chance to use those landlord credit check ideals). Feel free to investigate their backgrounds to include previous and current affiliations.
There’s so much more to learn and before you invest in any charity you should take your time to research. Definitely read more about this to make the best decisions for your time and money.