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There are over 1.1 million public charities in the United States, and even more than 55,000 new ones were launched in the year 2011, according to the IRS. All of these organizations purport to do great work and make a distinction, so how do you decide which ones are the best charities to contribute to?
Back in 2005, an e-mail began to distribute on the Net imploring individuals to ‘Think Before You Donate.’ The email targeted specific charities whom it claimed weren’t deserving of your donations since of just how much settlement their CEO received, and other charities who were more worthy because of how little payment the CEO got.
The email went viral and, 8 years later, is still being circulated. Unfortunately, much of the info in it’s inaccurate, out-of-date, and from context.
But since it was on the Web, individuals thought it and kept forwarded it without verifying its claims. And teams like Goodwill, who were unfairly maligned, have to keep fighting it to set the record directly.
Despite the truth that individuals did not think (or validate) before forwarding this e-mail on to others, the property behind it was excellent– we should think before we donate. However which requirements should we make use of prior to contributing to charity? And how can we be sure that our money will be used well and go to the people who require it?
Choosing the Best Charities
Here are 4 things to consider when picking which charities to contribute to …
Give to charities that you are personally linked to or affiliated with somehow. Like your church or denomination, your alma mater, an organization you volunteer with, a listener-supported radio station you listen to, and so on. The closer you’re to the company, the even more confident you can be that they are truly doing which they state they are visiting do, and in the method you hoped they ‘d do it.
2. A Cause You Care About
Give to charities that are dealing with causes or passion locations you really care about. Like evangelism and goals, abortion prevention, cancer research, the environment, politics, the arts, kids, fraternal company, the symphony, museums, etc. The more you care about what they do, the more you’ll want to stay engaged and informed.
3. Good Financial Stewardship
Give to charities that invest most of their earnings on programs and lesser amounts on overhead costs like fundraising and administration. There’s no difficult or rapid rule on the amount of is appropriate for overhead– it differs depending on the type of company and where it’s in its life process. For example, brand-new organizations typically spend more on fundraising and administration for the first couple of years because they are simply getting started. But a general guideline advantageous charities is to invest 80-90 % on programming and just 10-20 % on overhead (including personnel wages and fundraising costs).
Another factor to look at is the amount of the organization pays in salary to their CEO, which is what that ‘Think Prior to You Contribute’ hoax was getting after. But payment is rather subjective due to the fact that all of it depends on the context like the CEO’s experience, the organization’s size, scope and spending plan, the expense of staying in the neighborhood where the company is located, and so on
4. Good Board Governance and Accountability
Give to charities that have an energetic, notified, and independent board. A great guideline for the board is to contend least 5 members who aren’t workers of the company or relative of the CEO. If the board is comprised of several staff or relative, there’s greater risk that they’ll not act separately or in the best interests of the organization. Also, look to see if they submit to an annual independent audit or testimonial of their financial records.
So how do you understand if the charity you want supporting practices good financial stewardship and board governance? Should you really be giving them? Here’s how you learn.
1. Contact them for details.
Do not hesitate to call and ask to speak to somebody about the work they do, the amount of of their earnings visits programs costs, and so on
2. Research their website.
Many companies are open and transparent about their monetary and management practices and publish their latest financial audit report or IRS 990 kind online for all to see. The audit report is a report of their finances and financial practices, which is conducted by an independent accounting firm. The 990 type is a yearly tax return that most tax-exempt organizations (omitting churches) are required to file with the IRS each year.
3. Check third-party sources.
It’s much easier than ever to research charities online thanks to charity evaluator and accreditation websites like GuideStar, Charity Navigator, and the Evangelical Council for Financial Responsibility (ECFA). Each website offers a simple method to look-up your favored charity to see if they are detailed and to discover about their governance, finances, programs focus, and more.