Our Moral Compass and Donating

How do we know what charities will use our donations wisely?

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.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

JustUs January 17, 2013 at 04:56 PM
I suggest to all to do a little research and determine how much the executives or directors of these non-profit charitables make in salary and/or benefits. Lot's of them make $100,000 or more each year. You pay for that with your donations. If these people are so dedicated to helping the poor or the sick or the downtrodden, why do they accept so much money? Why don't they take salaries commensurate with those who really devote their lives to the less fortunate? Instead of taking $150,000 - only take $50,000 and give the rest back to the less fortunate. But you would never see that happen. And that's why I don't give to them. I donate DIRECTLY to those in need. I don't want to participate in paying those big salaries. If you want to, knock yourselves out!
Tom Yarnall January 21, 2013 at 06:54 PM
Data from charitynavigator.org: The Red Cross has a rating of 60/70 , revenue of $3.5 billion and the CEO makes $501K per year. The Wounded Warriors project has a rating of 54/70, revenue of $70 million and the CEO makes $319K. The March of Dimes has a rating of 41/70, a revenue of $209 million and the CEO makes $632K per year! Who would you give to if these were your only choices? It surely wouldn't be the March of Dimes. There are plenty of good charities in the high 60's where the CEO makes far, far less.
JustUs January 21, 2013 at 07:14 PM
Tom, have you ever taken the time to research the salaries of the lower level managers (regional directors, etc.) of these non-profits in Orange County? Check it out. You'd be amazed. United Way, Good Will, Boy Scouts, Girl Scouts, Red Cross, March of Dimes, etc.... Now I could understand if these organizations made widgits and their sole purpose was to get rich. However they wanted to spend their profits is their business. But not with charitable non-profits that are supposedly in business to help the downtrodden. I think most of us could agree on that.
Clariece Tally January 22, 2013 at 01:16 AM
JustUs - let it go. First of all while some of the salaries are high, the people in these positions are educated business professionals running hugely complex organizations. These are multi-million dollar organizations are moving mountains to provide for victims of homelessness, hunger, disease, natural disasters, environmental concerns, etc. Aid doesn't just drop into the laps of the needy. And while Lance Armstrong has turned out to be a fraud for steroid use, his capacity to raise millions for cancer over the last few years may be his one saving grace. Giving $5 to a guy on the street does not to correct homelessness and it certainly does nothing to put food on the table in a third world country. Charity Watch is an excellent source to see what percentage of your dollar is used for overhead and what actually goes into service. I'm sorry you don't make a CEO's salary. But then again, finishing high school is generally the first step towards earning a college degree....
JustUs January 22, 2013 at 04:15 AM
"JustUs - let it go." Let what go, Clariece? The known fact that several of the large charitable organizations have been proven to take their donors to the financial cleaners and caught with their financial pants down around their ankles? I couldn't count the numbers of scandals that I've read about on both hands. Based on what I've read I wouldn't donate a plug nickle to one. I am not willing to take a chance. And that I why I give DIRECTLY to those in need. I fyou want to help banana republics with you money - go right ahead. I woudl rather give what I have to needy Americans. IMO Lance Armstrong has no redeeming value. He was a selfish lying swine who committed some egregious acts that hurt many people. I think Congress should subpeona him and force him to testify to what he knows about - like Roger Clemons did. Why should Armstrong get a pass? Oh, btw, if I were a betting man I would wager I have more college education than you do. So your last little jab at me was WAY off the mark, dear! Try again! :^)


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