5 Crucial Facts to check before donating to a Nonprofit

Making a donation to support a nonprofit charitable cause you care about can be a wonderful feeling. But that great feeling can fade fast if you later discover the charity isn’t legitimate.

Luckily, there are some easy ways to guard against falling prey to a bogus charity. In this post, learn about the five crucial facts you should check for before pulling out your wallet to donate to a nonprofit.

Look for the IRS Letter of Nonprofit Determination
A simple way to check for this letter is to look on a website called GuideStar. GuideStar is a nonprofit itself with a mission to track and verify legitimate nonprofit charities for possible donors. It is free to use GuideStar.

If the charity is not listed with GuideStar, you can contact the organization and ask to see the IRS Letter instead.

Read the Charity’s Annual Report
The annual report is a document all IRS approved nonprofits are required to provide for public knowledge upon request. The annual report will tell you how much of incoming donations is being allotted to various departments, including salaries, administrative overhead and programs and services.

You want to look for a charity that uses the majority of incoming funds for programs and services.

Look for Verifiable Charitable Impact
Before you dedicate a portion of your own hard-earned income to support others, you want to know that the charitable recipient is actually making good on its mission and vision. So take a look at the mission and vision, both of which should be readily available on the charity’s website.

Then look for recent updates that outline how the charity is using donated funds to make a real difference. You want to be sure your funds will make a measurable impact on those the charity states they serve.

Does the Charity Have an Evidence-Based Strategy
While every so often a charitable organization will chart brand new ground and build its own research base from the ground up, most charities work from existing effective models. Verify the research or model that supports the charity’s efforts.

Can the Nonprofit Answer Your Questions
Here, you want to look for a responsive, open and honest leadership that is clearly passionate about their mission and vision and is willing and eager to answer all your questions and provide extra data on program results.

When you choose to donate money to a nonprofit, the burden is on you to verify that the charity is legitimate. By thoroughly vetting the nonprofit’s tax-exempt status and track record of success in achieving its mission and vision, you can feel confident in donating your funds to the greater good.