Are Your Donations Going to the Right Nonprofits?

Are Your Donations Going to the Right Nonprofits?

December 07, 2017
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I'm an animal lover, and I donate time and money to nonprofit organizations that save and protect the lives of homeless dogs and cats. Friends ask me how I, as a donor and an independent financial advisor, select the organizations. Believe me; I know how confusing it can be since there is a vast array - more than one million - of nonprofits engaged in active fundraising. So, in the midst of year-end appeals, how does a potential donor make the right match?

What is your interest or passion? I suggest that you start by looking for those organizations that use their resources to have the most impact and do the best work. Do your research. Two sources – the organization’s website and a charity assessment tool like Guidestar – are the best places to start.

Word of caution: For many people, a standard measure of success is the ratio of donations that support programming to administrative costs. This should be one element to consider, but keep in mind that for a nonprofit to actually do its work, it needs talented and committed staff.

Here are some questions that can help:

1. What is the mission of the organization?

You want a clear picture of the purpose of the nonprofit and how the work achieves those goals. Look for information about its history – how did it get started, growth, and achievements. How will your donation be used? What are the qualifications and achievements of its staff? Who is the board of directors? Is the 501©(3) status current?

2. Are accurate financial reports available?

What can you find out about the financial health and priorities of the organization? Check out the website. Can you easily access annual reports, audited financials and IRS 990 filings?

3. Is the organization achieving the outcomes it promises?

You want to support an organization is making a difference. Can they honestly describe the impact their work is having on their mission-related goals? Look for outcomes achieved and changes that resulted.

4. Do donors receive regular updates?

The chances are that you want to support a mission in which you have a particular interest. As a donor, you want to know how your support is contributing to progress and what, if any, challenges are confronted in meeting goals. Think of yourself as a partner, with a shared commitment to a set of goals. Will your view of this partnership be shared by the organization via regular communication and updates?

Have questions? Do you need advice on how your donations affect your personal financial plan?  Contact me today!

Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.