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Buckle your seatbelts, folks. This is one of my FAVORITE topics. And it just so happens that I’m a little bit of an expert on it. I think that donating time and money should be important pieces to our financial and family puzzle. But how do you choose a charity that you can trust?
First, it’s important to know some important terms. Let’s look at some definitions:
Nonprofit – A nonprofit is an organization or institution whose purpose is not to create a profit, but rather is dedicated to a certain cause or point of view. This includes charities but also includes universities, religious organizations, scientific research organizations, and many others.
Charity – A charity is an organization set up to provide help and raise money for those in need (dictionary.com). So, a charity is a specific kind of nonprofit organization.
501(c)(3) – 501(c)(3) refers to the section of the tax code that permits an organization to be tax exempt as long as it is “organized and operated” as a: religious, educational, charitable, scientific, literary, testing for public safety, prevention of cruelty to children or animals, or amateur sports competition organization. (IRS tax code) Basically, this means that the organization doesn’t have to pay taxes and includes universities, charities, community associations, and other common nonprofit organizations.
Okay, now that we know our terms, let’s get down to it. How do you choose a charity?
Find a charity with a mission that you love
This one is so important. Look for a charity that you can really relate to. Do you hate animals? Well, then don’t donate to your local animal shelter (and you’ll probably want to stay away from my house, too). Your donation won’t mean anything to you and will feel more like a sacrifice than a contribution.
Think about what is important to you. Are you passionate about children being healthy or having a quality education? Is there a religious cause that you can get behind? Do you want to help locally, nationally, or internationally? Do you want to support a large charity or a smaller one? Really sit and think about this one.
Then, you can Google keywords that interest you and add donate. Your search will probably come up with several options. You can start to browse through the different charities. But what should you look for aside from the mission?
Decide what kind of relationship you want to have with the charity
Now you have to do some more thinking. I know, you wanted this to be easy. But it’s an important decision.
Do you have some extra money at the end of the year and your tax advisor is suggesting that you make a charitable donation? Then, you are likely to look for a charity to make a one-time donation. You still want your dollars to count but you aren’t looking for volunteer opportunities or other ways to get involved.
Do you have the desire to become involved with a charity and volunteer, become an ambassador and rally others to donate and volunteer? Then you will need to look for a charity that can provide these opportunities.
And it is completely okay to say that you want to first donate to the organization and then get more involved later. That’s how most people do it!
Check to make sure your charity is legit
Have you seen those images floating around the internet that talk about how much different heads of charitable organizations make and how they are frauds? Yeah, me too. I get it. You don’t want your hard-earned money to go to some rich guy’s pockets instead of to people or a cause that needs it. I’m with ya. (A little bit of a tangent here, but check out this Ted Talk about how we should change the way we think about charities and the money they raise and spend.)
So, there are a few things you can do to make sure the nonprofit that you are looking into is worth your time and money.
Is the organization a registered 501(c)(3)?
First, an easy first step is to see if the organization is a registered 501(c)(3). We talked about this term above but it means that the organization is legally registered and doesn’t have to pay taxes because of its status. This doesn’t necessarily mean that the organization is well-run but it at least means that it is legally registered. And, if you have a company match, they will usually require the organization to have this status.
How does the organization spend its donations?
Next, search the website and find an annual report, impact data, or a financials page. Here you should find a breakdown of expenses. It may look something like: Program 75%, Administration 15%, and Fundraising 10%. Now, don’t get too wrapped up in the percentages. #1 Organizations can play a bit with these number. #2 Investing in things like administration and fundraising is also important (See the same TED talk above!). But, it is important that the organization is transparent and shares how their expenses are broken down.
What is the charity’s impact on its beneficiaries?
Finally, take a look at what the organization shares as their impact data. This tells a lot about the way the charity operates. For example, if you are looking into an organization that says it is dedicated to improving children’s education and when you look at their impact data they say that this year they have handed out 1,000,000 pencils, you may think – Wow, that’s a lot of pencils! But, is one pencil going to help improve the child’s education? Are they doing anything else?
Often, it is easier for an organization to share “reach” numbers than actual “impact” numbers. What if that same organization said that they distributed 10,000 books to 100 classrooms, trained teachers in literacy techniques, and saw an increase in literacy of 27% at the end of the year. Now, we’re talking. That is IMPACT!
Be a responsible donor/volunteer
What does it mean to be a responsible donor or volunteer? Well, the first step is to do your homework and research the charity. If you have followed the steps above, you should be well on your way.
Next, you should understand that the organization probably has time and resource constraints. So, while it is important for them to share with you how they are spending your money and how it is impacting their cause, daily email updates or phone calls are probably not appropriate.
And if you are going to volunteer, do it responsibly. This means not only respecting the organization and its rules, the people or cause you are serving, and the time and resources spent, but also checking your ego at the door. Before deciding to volunteer with any organization, I suggest you read Toxic Charity.
It’s a real look at how some charities and church groups do more harm than good. How could that be? The power dynamic is a difficult one with charities. Once you become the person giving, you automatically are in a superior position to the person receiving. You have the power.
You probably have heard about people going on mission trips for a week or two to another country. (Don’t get me wrong. These can be done well. But many times they are not.) A group of 20-30 high school or college students build a house, school, or community building for a needy family or community.
But are these students builders? Would you want them building your house? More importantly, are there qualified people in the community who you could donate the money to so they could build the house and receive an income?
Proponents of these kinds of trips say that the students then return to their towns and spread the word and raise money for the community they visited. But the research shows that most of the time they don’t. They enjoy their experience and move on.
In Toxic Charity, Robert Lupton talks about how we need to be careful with how we get involved with charities and churches in order to do it the right way. And there IS a right way! As Lupton says, “Authentic relationships with those in need have a way of correcting the we-will-rescue-you mindset and replacing it with mutual admiration and respect.”
My charity of choice
Ok, I put this at the end for a reason. I want you to go through the steps of thinking about what you’re passionate about, researching the charity, thinking about the relationship you want, and making sure that you are a responsible donor. And I want you to do that on your own.
But, I am also passionate about my charity of choice, so I feel like I should share it with you. Full disclosure here – I work for this organization. Which means that I know it very well.
My charity of choice is Mil Milagros, Inc. I have worked there for the last five years and every day I get a little more passionate about what MM does and how it does it. Mil Milagros’ mission is to prevent malnutrition and hunger and improve children’s health and education in Guatemala. Having lived in Guatemala for more than seven years, THAT is a mission that I am passionate about.
I also have the advantage of seeing the benefits of what Mil Milagros does every single day with the people and communities with whom we work. MM builds lasting relationships and gives the communities – principally amazing women leaders – the resources and training necessary to make their own change in their communities.
If you are interested in finding out more about Mil Milagros, Inc. and/or feel compelled to donate, please visit www.milmilagros.org.
I hope this overview helps you to choose the right charity for you!
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