Did you know that just because someone has established a charity, it doesn’t mean that all of the money that is being donated is actually being used for the cause for which they started the charity? A charity is, at it’s core, a business with (hopefully) good intentions. It’s designated to be a non-profit by the government but it doesn’t mean that it operates for free. Just like any other business, there are overhead costs associated with running charity organizations. Things like salaries, office space and supplies all need to be taken care of and often come out of the donations made to the charity.
Unfortunately, there are times when some charity organizations don’t always have the best of intentions or don’t have good leadership and funds can be misappropriated. Sometimes this happens quietly in the background, while people continue to give to the charity. This is why transparency of charity organizations is so important.
What does this mean for the average person looking to donate to a charity? How do you make sure that the organization you’re giving to is on the up and up? Well, there are a couple of great resources online that can help with that:
- GuideStar – This site gathers and disseminates information about every single IRS-registered nonprofit organization. They tons of information about each nonprofit’s mission, legitimacy, impact, reputation, finances, programs, transparency, governance, and so much more. They do that so you can take the information and make the best decisions possible on where to donate.
- Charity Navigator – It has become the nation’s largest and most-utilized charity evaluating site. Their team of professional analysts has examined tens of thousands of non-profit financial documents and used this knowledge to develop an unbiased, objective, numbers-based rating system to that is easy to use and understand. Charity Navigator’s rating system examines two broad areas of a charity’s performance; their Financial Health and their Accountability & Transparency. They’ve also developed a really great Holiday Gift Giving Guide that can be useful for any time.
So, if you ever have any questions about an organization you’re considering donating to, have a look at those sites to do your due diligence. You want to make sure that the intentions of the charity match the intentions of your giving!