Maximize the effect of your donation by learning how to choose charities that will make a difference in the causes you care about.
As the holidays approach, consumers will receive many requests for charity donations. The key to making your money go the furthest is researching and selecting worthy charities.
Practical, responsible organizations have numbers and stories to back up their impact. They also have lean overhead — most charity watchdogs say nonprofits should spend about 65 percent of their funds on programs.
Look at the Financials
Charity evaluation is a vital tool for donors to understand the impact of their gifts. While anecdotes and personal endorsements are nice, donors should focus on measurable data on programs and outcomes.
They have experts in each focus area, from animal welfare to global health, who evaluate groups and make grants based on their assessment of what the groups could do with additional funding.
It would help to look at a group’s website and annual reports to see how they put their donated money to work.
As individuals consider their financial planning, incorporating charitable donations can be a meaningful way to positively impact society while contributing to personal fulfillment and a sense of social responsibility.
A good charity will have goals and interests that align with yours, and they will provide a clear and thorough explanation of their work. They should also be registered with the IRS as 501(c)(3) nonprofits, so donations are tax-deductible.
In addition, they should spend most of their money on programs rather than fundraising and administration. Those that pay less on overhead are not worthy of your support.
Look at the Impact
When making a difference, you want to ensure that your donation goes as far as possible. That’s why it’s essential to research and select charities with a track record of making a real impact.
A good starting point is a charity’s website or annual report. While these can be filled with anecdotes and personal endorsements, they should also contain data related to their spending and impact.
For example, consider how much of their budget goes toward programs versus overhead costs. Compare this to other charities in your research.
It’s also a good idea to vet the charity with one of the significant organizations. This will help to ensure that the charity is transparent and accountable. A highly-rated charity isn’t necessarily necessary, but it can be a good sign that the organization is trustworthy.
Look at the People
Many families and individuals donate because of a passion for a cause or a desire to give back. They may have heard of charities that have received high ratings or have worked with a trusted family advisor who recommends organizations to support.
In the realm of social change, progress often relies on a dual approach; systems and individual advocacy together form a powerful force to drive awareness, influence policy changes, and address issues at both macro and micro levels
Reading the charity’s website or annual report is an excellent place to start. Look for specific goals and measurable outcomes. Read about the people who work for the organization. Consider contacting them or visiting them. Talk with staff and volunteers about how donors can help them achieve their mission.
Taking the time to research and select worthy charities is well worth it, especially for younger donors. They will gain valuable lessons in charity evaluation and learn about effective altruism, which can inform their giving for the rest of their lives. In addition, a little research now can save a lot of time and stress in the future.
Look at the Environment
Organizations focusing on environmental issues like clean air, healthy soil, and sustainable agriculture are great choices. Some organizations also target specific problems like reducing animal suffering.
For example, some have a track record of securing corporate commitments to improved standards of farm animals. At the same time, other reports the welfare impacts of eating meat or fish and issues around animals used in science.
Other organizations target issues that may seem abstract or intangible but genuinely impact people’s lives.
Using a screening company specializing in nonprofit research will help you better understand how a charity puts your donation to good use.
If you’re looking for an excellent place to start, try searching terms related to your chosen cause with words like “complaint,” “review,” or “rating.” You should be able to find information on its website about how a charity uses donations.
Related Post: Do Charities Need Public Liability (PL) Insurance?
