While following this week’s news on Lance Armstrong’s admission of using performance enhancing drugs, I think about integrity. What makes people slide from what they know is right, to another choice? None of us are perfect, and the answers are complicated. And I’m reminded that in my work, I get asked periodically, “How do I know which charity to donate to so that my investment is used as promised?” That is such a great question. And there are ways to greatly reduce the risk of your donation getting allocated in an inappropriate way.
Here are some tips:
1. Check out the organization on these sites: www.charitynavigator.org, www.givewell.org, and/or www.guidestar.org. These sites provide a rating of charitable organizations based on a variety of factors. They will confirm the status of a charity and post information about their finances, board, impact, transparency, and more. Not every charity is listed, but it’s a great place to start. And if a charity you are interested in isn't listed, I’d ask them why. These sites also have great educational articles and tips for donors.
2. Get to know the charity. Visit them (or call, if you don't live in the same town) and ask questions. Have the CEO give you a tour. Ask questions about what they do, and how they do it. Ask about their fundraising efforts over the past few years. Does their funding all come from one source, or are there several ways to support them? What percent goes to overhead or fundraising costs? In addition to the information you receive, you will likely develop a gut feeling about the people and the operation. A really great way to get to know an organization is to volunteer for it.
3. Review their website and printed materials. Confirm their charitable status, and look at their 990 form. Read their annual report. Besides confirming their viability and status, look for things that interest you. Do you feel excited about investing in their work?
4. Find out how they measure success. Many organizations with a social mission are striving to change lives. What does that mean for them? The numbers of people served is good to know, but what community need is being met? And what is the longer term effect? For example, if they tell you teens in the program are becoming "productive" citizens, ask them how they measure that. Do they vote? Volunteer? Graduate from trade schools or college?
There is no doubt that our country needs generous donors to lift up the work of the nonprofit sector. We have come to depend on charitable organizations to fill in service gaps, and partner with our schools, hospitals, governments, and other businesses to meet critical needs. So join in and give – just be sure you have completed your due diligence in a way that aligns with your moral compass.
Cindi Phallen has more than 20 years of experience as a leader in the nonprofit sector. She is the founder and president of Create Possibility, which works to help nonprofits run more efficiently. For more information, visit possibility-cp.com or call 858.618.4762.