When you give money to a charity, it can be tough to know what happens to your donation after it’s left your wallet. Will it go directly towards purchasing a new cow for a family in Kenya, as you’d been told—or will your hard-earned money all be squandered bankrolling the sushi buffet for the organization’s wealthiest donors?
You may not see your money again, but there’s no reason you shouldn’t consider your donation an investment in the world of social good. And as with any other investment, you’d like to make sure that you’re getting value for your contribution. So how can you be sure that the charity you select will use your donation wisely?
“Use your head and your heart,” says Rich Cowles, executive director of the Charities Review Council. “It can be a more satisfying experience if you do a little bit of research.”
Here are five ways to ensure your donation will make a difference.
1. Become active in the giving process. It’s easy to give to the Salvation Army at Christmas when volunteers are ringing the donation bell outside of every shopping center, but you may need to work a little harder to find some other organizations that fit your interests. “Think about a legacy and what you’d like to support,” says Cowles. “We encourage people to make a budget for their giving and figure out what kinds of causes interest them, then find charities that support those causes.”
Many nonprofits’ websites provide great overviews of their missions, but if you’re not sure where to start, several online resources, including Razoo, Charity Navigator, and Network for Good, can provide you with detailed information on specific nonprofit groups based on your particular interests.
2. Study financial statements. If you’d like to learn how a nonprofit is spending its money, you can download the group’s 990 tax forms from Guidestar. “If you still have questions, ask the charity for a copy of its most recent, audited financial statements,” says Jonathan Huston, the Chief Communications Officer for the nonprofit group Physicians for Human Rights. “These should be available upon request.”
Ideally, at least 70 percent of the program’s budget “should be going to the program, as opposed to fundraising and management,” says Cowles.
