There are many organizations out there that perform services that range from helping educate children to supporting a multi-national medical organization fighting a rare and deadly disease. One of the first things you need to determine before you contribute to any non-profit organization is what cause and/or service you feel strongly enough to contribute time and money to support them. Then once you have decided on a cause, you should do diligent research on what organizations or charities are working towards meeting the needs of your selected cause. You want to make sure your money and/or time is not being wasted. After you have done your initial research, you then need to know how the money is being spent. There are five keys to determining the validity of a charity while you are doing the initial research.
Do they have 501(3) status?
According to Link to Non-Profits In order to obtain 501(3) status in most states, a non-profit organization must first be incorporated by the state and/or have some identifying documents that allow them to collect money from donors. A start-up charity will not have this status immediately, but they should be taking steps to acquire it. One of the first steps is an EIN number for tax purposes. It is perfectly in your rights to ask a public charity to fill out a W-9 form before giving them a donation.
Where is the money going?
In your initial research, you should ask the charity where the monies will be spent. A good portion of donor money is spent on administrative costs, but it is perfectly legal to ask for a receipt or letter acknowledging your contribution. Organizations like GuideStar offer links to major non-profit organizations along with information about their financial status. The American Institute of Philanthropy is also a good source of information with links to major non-profit organizations.
Do They Have A Solid Mission Statement?
This is a key factor to determining if the charity is legitimate or not. A good solid mission statement can tell you a lot about what the organization stands for and will help you determine whether or not the organization is fulfilling it or not. You should be able to see proof in action by the tasks they perform to fulfill the mission statement. Non-profit organizations are required to file 990s which have a section that tells you what their mission statement is. Be suspicious of vague mission statements.
Is there any evidence of needs being met?
This is an important factor to determine if the charity is legitimate or not. Charities should be actively involved in some way to address needs raised that created the cause. For example, a childcare center should be actively enrolling children in a facility. If there is no evidence of something being done, then you have the right to ask for proof of what the charity is doing to address needs.
Do they have a good “track” record?
This actually ties in with looking for evidence of needs being met by the charity. A young start up charity will not have a track record of performing activities geared towards meeting needs. You should look for what goals the charity wants to accomplish in order to meet the needs addressed by the cause. For a good track record the charity should meet or exceed their stated goals at least 80 percent of the time. A charity without some set goals should be avoided like the plague. A key factor in determining validity here is to ask for measurable goals. For example, a historical society’s goals can be measured by the response they receive from the community at an event. If they receive a favorable response, then they can move forward with their goal of educating the community about their historical resources.
Links can be found on-line to various non-profit organizations. You must do due diligence however to research non-profit organizations before committing either time or money. The time you spend now will save you grief later. Please be aware that there are some illegitimate charities that pose as legitimate charities. If you follow the above guidelines, you can be confident that your time and money is being well spent.