Don’t know what to look for before you donate to a nonprofit? Don’t worry — you are not alone.
With online donation sites like JustGive.org and Network for Good it is now easier and more convenient to donate than ever before. But how do can donors know if their organization will be efficient and effective in spending donor money?
Sites like Charity Navigator and Guidestar have supplied donors with the legitimate forms and facts about nonprofits, but not a whole lot of explanation. The answer is out there, but that takes time and energy.
In a recent article, Si Cantwell from Star News Online outlines the best way to evaluate a nonprofit before you donate. She walks readers through form 990s (a document administered by the IRS for all 501 c(3) tax-exempt organizations), audited financials, un-audited statements of income and expenses, and other standard information.
To find out how you can determine where, and to what programs, your charitable donation will go toward visit Star News online.
Posted in Uncategorized
Tagged 990-n e-postcard, charitable giving, charity navigator, donor help, donorschoose, form 990, guidestar, helping small donors, justgive.org, justgiving, network for good
Posted by Katya Andresen on May 12, 2010
Many of the same trends we have here!
A great summary from our friends at Canada Helps (sort of the Network for Good of Canada – we consider them our brothers/sisters across the border):
By Heidi Genrich
My entire holiday season was made on December 1st, 2009 when Charity Navigator, GiveWell, Great Nonprofits, Guidestar and Philanthropedia issued a joint press release condemning the use of overhead ratios and executive salaries to evaluate nonprofits.
Judging a nonprofit’s quality by how much they spend on laser printers vs. African wells, arbitrarily creating universal budget guidelines for all types of organizations, always seemed a little silly. Even if the overhead-ratio-executive-salary method of comparing nonprofits worked in specific circumstances, it made no attempt to measure the actual impact of their programs.
Tim Ogden put the problem best in his post on Philanthropy Action:
In short, picking a charity based on the lowest overhead ratio is like buying the cheapest car that money can buy. You might spend less in the short run but it’s inevitably going to let you down.
Ken Berger, the CEO and President of Charity Navigator, may have sent the biggest waves through the nonprofit community with his statement that “too many donors are paying too much attention to measures like overhead.” Charity Navigator became the web’s nonprofit gold standard precisely because it encouraged donors to judge and compare nonprofits based on their overhead ratios. This is a turning point that is long overdue.
As a longtime critic of overhead ratio evaluations, Dan Pallota’s post on the press release may be the most interesting. The next step is to figure out an accessible standard by which the average donor can evaluate the >1 million nonprofit organizations in the US.