Is This Nonprofit Worthy of Your Donation?
Four steps to evaluate an organization before giving them money
As year-end comes into view, many families start to think more about giving. For some, the motivation to give is tax-deductions. For others, it’s the spirit of Christmas. But every year, just as people start getting into the spirit of giving, a number of articles and memes will circulate telling everyone who does NOT deserve their money.
“Don’t give to Operation Christmas Child. It’s not worth the shipping cost!”
“Don’t give to the Salvation Army! They don’t actually pay their thrift store workers fair wages.”
“Don’t give to the Red Cross! They had a major scandal where the money went missing.”
Sometimes the critiques are valid. Sometimes, they aren’t. How should you determine who receives your holiday gifts? Where will your money actually make a difference?
1. Determine your own values and causes.
When you say you want to make the world a better place, what exactly do you have in mind? You want to find an organization that fits that vision.
If you are a religious person, then giving to a religious organization fits within your values. If you aren’t a religious person, then you might want to avoid organizations that have conversion or “church growth” as a primary goal. You might look for other values like promoting peace, promoting democracy, or improving women’s rights.
That will still leave you with way too many organizations. You need to narrow down by type of cause. These fall roughly into categories like education, financial empowerment, environmental action, food for the hungry, clean water, housing, roads, healthcare, etc.
If you are at a loss and don’t know of organizations, search the internet for “Best organizations solving…” and fill in the blank with the problem you would like to see solved.
2. Check the financial reputation of the charities you are considering.
The easiest way to do this is to look at CharityNavigator or GuideStar. A reliable organization will provide their tax returns and an annual financial report. These two sites gather that information and crunch numbers.
They look for things like ratios of how much money goes to headquarters staff versus program expenses. They also look for basic financial viability. Unless you have enough to single-handedly turn around the organization’s financial status, you want to give money to an organization that already has enough in regular contributions that it will be able to complete its program goals.
3. Do a quick search for the organization’s name followed by “scandal”.
Organizations with good public relations staff are pretty good at curating the top 10 Google results if you search their name only. Adding “scandal” or “court case” or “abuse” will bring you to the stuff they don’t want you to see. Look at this, but take it with a grain of salt. What you really want is to find a Snopes Fact Check article or a reliable news source (New York Times, The Atlantic, BBC, or similar) that has reported on the case.
Before dismissing the organization based on the scandal, check the date. If the scandal is old, you might want to do more searching and see how the organization has addressed the issues.
The bigger the organization, the more likely it is to have a public scandal. However, big organizations are also the ones who tend to do the most effective work and have the highest caliber staff. They just have so many people and are involved in so many projects that the opportunities for failure are correspondingly many.
An isolated instance that was quickly remedied is actually a good sign. It means the organization has transparency. People felt free to speak out. The leadership was flexible and changed course. All of those are good things. Recurring scandals on the same theme, or scandals that evidence a historical pattern of abuse — those are serious issues. Don’t give your money to an organization that has recurring problems.
4. Look at their annual reports or read their blogs.
You want to see a clear presentation of their impact and a high level of respect for their clients. If every picture is of sad, poor, helpless, dark-skinned people, and every story is of how the organization rescued that person from their miserable state, then it is not actually a good organization.
A good organization comes alongside the people it helps. It hires people who see the dignity and share in the joys of their clients.
Look for organizations that feature smiling people or hard-working people or diligently studying children. Look for stories that showcase how hard people were trying before and how, with just a little help or just the right help, they were able to overcome their challenges.
Finally, look for clear impact reports. These are different from finance reports or annual donor reports. Impact reports are most often reports made to grant funding organizations. They say things like, “After receiving our program’s assistance, 70% of participants reported reduced levels of poverty.” Or, “After participating in our program, 80% of young people were able to utilize our five conflict resolution tools and reported greater confidence interacting across religious divides.”
Many, many organizations say that they are going to change the world. Far fewer organizations stop to evaluate whether they are accomplishing what they set out to do.
One final note
If an organization aligns with your values, is financially sound, has no major scandals, and seems to be making a real difference, then give as much money as you can afford to give.
But — what if it’s a new organization? Or a friend’s organization? What if it’s too small of an organization to be included in the rating pages?
While you won’t be able to use the same tools, you should be able to use the same principles to evaluate those cases too. If it’s a new or tiny organization, does it have a solid funding plan? Has it clearly outlined the problem it will solve and how? Will the leadership be sending you regular updates on how things are progressing?
If your friend is asking you to support their own organization, ask them about the financial aspects, and ask how they will report on their outcomes. If they get offended, then they don’t know how to run a good, professional nonprofit.
There are many people and causes in the world that need help. Many organizations promise to help and then ask you for the money. You can best make a difference by giving your money to the organizations that show that they know how to help and have a strong record of providing the right kind of help.
This year, give wisely, give strategically, and — yes — give generously.