Though never ideal, charity scams can often times be more common than current or potential donors would be comfortable coming to terms with. Familiarizing yourself with the various governing bodies that check up on and analyze how these charities operate is a great first step to prevent giving away hard earned dollars to organizations.
1. The IRS Nonprofit Charities Database has a tool called “The Exempt Organizations Select Check Tool”. This tool allows you to enter the name of an organization and see if the organization is exempt or not, which is an important piece of information to know before you donate anywhere. Please bear in mind If the organization is not exempt, your donation will not be tax-deductible.
2. Charity Navigator rates charities based on their financial health, accountability, and transparency to guide individuals to make smart decisions throughout the donation process. Evaluating over eight-thousand charities, it is clear that this organization takes various factors into consideration when producing comprehensive guides for donors. On the off chance that your charity is currently not on the list, be sure to further investigate why this could be the case.
3. GuideStar keeps records of financial documents, such as the 990, which help your current and prospective volunteers evaluate the how legitimate an organization is. The 990 document not only informs donors of how the dollars are allocated, but also sheds light on how the top or upper management officials within the organization are compensated.
4. Charity Watch rates charities on specific criteria such as exposing any sort of abuse or misallocated funds. While advice, articles, and basic information are open to the public, a membership is required to have access into specific charities’ internal structure, spending habits, and other useful information to help you make a decision.
5. The BBB Wise Giving Alliance helps donors in evaluating organizations on particular criteria. Among the twenty standards, some that the organization focus their studies on include oversight, effectiveness, finances, solicitations, and informational materials. If said charity meets the necessary requirements, the philanthropic body would actually earn a point added to their profile. As the score is ranked out of twenty, be sure to keep tabs on how your favorite charity or charities are ranking.
What Donors Should Keep in Mind:
-Be careful with giving your credit card number over the phone or to an organization that only wants cash donations. If said organization or charity only wants cash donations, investigation is the best way to better understand this process.
-Keep in mind that charities do infact have administrative costs and it is impossible if 100% of the proceeds go to the cause directly.
-Trust your gut feeling, if a certain organization seems strange or a little off, be sure to check up on the charity with any of the governing bodies mentioned above.
-Avoid donating via text as much as you can. It is the least secure way to give money to an organization or charity.
-While donating dollars is always good, donating items such as food, clothing, or other goods is also a wonderful way to get involved with a charity.