TV6 INVESTIGATES: Checking on charities and where your money is going
The season of giving is upon us.
Ashley Post, Communications Manager at Charity Navigator says, “In the nonprofit sector, year-end giving is just a huge trend. It’s something charities look forward to and plan for the whole year, which is why beginning in mid-to-late fall, nonprofits ramp up, and you’re probably getting more letters from them in the mail.”
While you may be feeling generous, you should know not all charities are putting your dollars where they say they are.
"Donors need to be extra careful because there are unfortunately people out there looking to take advantage of that opportunity so take the time to be extra cautious before making a donation,” says Post.
Charity Navigator is the country’s largest independent charity evaluator, and also a nonprofit itself.
Post says, “Our charity analysts go through each of the websites for the organizations we evaluate and just make sure those things are there, and if they are, they receive credit for it. We consider a charity’s financial health, how much goes into their programs which is how they’re achieving their mission, as well as their fundraising and administration, which are necessary for keeping a charity’s doors open and functioning.”
Rene Gellerman, President and CEO of United Way of the Quad Cities says, "They do the hard leg work and they also break it down in different categories so if there's certain areas you're interested in such as administrative fees, they'll benchmark that and give you some insight."
The site breaks down more than 9,000 of the largest charities nationwide and ranks them based on how accountable they are to their donors.
Post says there is a benchmark donors should look for when it comes to how much money charities spend on their programs.
Post tells TV6, "General rule of thumb is we say charities should be spending 70 percent or more on their programs and that's how they're actually achieving their mission, serving their people they are, you know, out there to serve."
That means—preferably—30 percent or less should be split between fundraising, administrative costs, and other expenses.
Unfortunately, not all charities are up front with you, and one may say your entire donation is going toward its programs. You should check on that for yourself.
Post says, “One of the best things a donor can do before making a donation is just taking a few minutes to do their due-diligence.”
One of the larger charities in the region is United Way of the Quad Cities. It is highly ranked by Charity Navigator.
During fiscal year 2018, the nonprofit spent 82.2 percent of its expenses on the programs and services.
Gellerman says, "We want to make sure our nonprofits are transparent with their financial situation."
She tells TV6 all nonprofits should be transparent with their intent of using the money they receive and that donors should choose where they give based on their passions.
Whether those passions are education, animal welfare, or other programs, you should vet the nonprofit you’re giving your money to before you donate.
Gellerman explains, "I think United Way's role in this conversation is to re-direct that because I think what people are really asking is, "is my money making a difference?"
Experts recommend another way to check the legitimacy of a nonprofit and where your money is going—visit the IRS website.
You can look for a nonprofit’s Employee Identify Number, or EIN, on its site.
Punch it in on the IRS and if it’s a 501(c)3 nonprofit, you can access its 990 form. This form provides financial information each fiscal year.
Post says, “That information we think so be free and accessible to anyone who’s interested in supporting the charity or just interested in learning more about what they do.”