Whether it's the holiday season, tax time or another occasion prompting you to be one of the millions of American households contributing more than $2,000 to charity this year, you may be confident you're supporting good causes. But are you supporting good organizations?
In my years as a journalist, volunteer, donor and nonprofit employee, I've experienced good, bad and ugly charities. Frankly, I'm a bit jaded. But I haven't given up on giving -- far from it. I'm even a big fan of 24-hour giving campaigns like Seattle Foundation's GiveBIG and #GivingTuesday, the post-Thanksgiving movement throwing shade on the mass consumerism of Black Friday and Cyber Monday. The lessons I've learned the hard way can help make my family's contributions more effective and shape our conversation on smarter giving.
Do Your Homework
With the magic of the Internet, a 501(c)(3) organization's mission, personnel, finances and impact statements are mere clicks away. Serious philanthropists will do their homework, including checking a charity's IRS Form 990 for any red flags over the past three years. But serious philanthropists also have people to help them do this -- and enough money to tolerate higher levels of risk, if they don't catch a problem until later.
For the rest of us, here are three things anyone can check quickly:
- Who's on the Board? A nonprofit's board is the first and last line of defense against incompetent, unethical and illegal behavior. Check the organization's website. Are there at least five board members, not including the executive director? Do they show a range of expertise, including representation of the population the nonprofit serves? (A young nonprofit may have a steering committee instead; the same reasoning applies.) Are there any new members, or have the same names been listed for years?
Some philanthropists like to consider how much of their donations go to overhead versus programs, through the organization's marketing materials or sites like Charity Navigator (for nonprofits with more than $1 million in annual revenue). I used to be one of them, but now I know better. The temptation to give to charities that claim nearly every penny goes to programs, rather than operating expenses, has two consequences: 1) organizations limp along without the resources needed to make sustainable impact or 2) organizations cook the books to make it seem like more of their expenses are program-related. The Overhead Myth leads to the Starvation Cycle. If you truly want to support an organization's theory of change, you need to be willing to support keeping its lights on.
Other donors like to see that a nonprofit has gotten consistent support from foundations, which have vetting processes that should pick up any problems after the first year or two. It does take more time to find and confirm this information, but after participating in Laura Arrillaga-Andreessen's Giving 2.0 course and Philanthropy Northwest's Best Practices workshop for grantmakers, I'm convinced it's worth the effort. Fortunately, many foundations now list their grant recipients online; a community foundation can guide you to vetted nonprofits in its city or county.
Start Small
Once you've found a new charitable organization to support, start with a small donation -- less than $100 -- and see how it goes. Did you get a receipt and a thank you? Does your employer match your donation? Do you get invited to participate in events, virtually or in person? Do you get some kind of proof of impact? If you're satisfied, keep giving! If not, there are many other fish in the 501(c)(3).
Giving feels great. Giving to an organization that's ineffective or incompetent, especially at the expense of supporting a better one, feels disappointing. Giving to an organization that turns out to be unethical or illegal feels awful! Let the giver beware -- and be aware. On #GivingTuesday and throughout the year, let's support the charities that not only want and need, but truly deserve our gifts.
Based in Seattle, Nicole Neroulias Gupte is the communications manager at Philanthropy Northwest.