Donating to a nonprofit organization is a wonderful way to make a positive impact on an issue that connects to
your values. Currently, 2.7 million nonprofits in the U.S. are looking for donors and volunteers (1). The opportunities to support a nonprofit can seem endless and overwhelming.
Unfortunately, not every nonprofit is properly managed, and your investment may not make the impact you intended. That’s why it is essential to research a nonprofit before becoming a long-term supporter. So, how do you do that?
What Matters to You?
Before you write a check, volunteer time or attend a gala, reflect on your values. What is important to you and your family? Is it providing meals to those who need them? Do you want to help expand educational opportunities for children? Do environmental issues weigh heavily on you? How you answer these questions, and the discussions around them, will bring your interests and passion into focus.
Finding Your Place
After figuring out what energizes you, the fun begins. There are many ways to find a charity that matches your values and interests. GuideStar.org and CharityNavigator.org are two examples of online databases that allow you to search charity profiles by category, cause, location and more.
Umbrella organizations, like the United Way, are a coalition of charitable organizations within a city or region. Such organizations in your area will have a wealth of knowledge about their partner organizations and can direct you to some that match your interests. Community foundations are another local resource for finding organizations that match your interests and passions and help direct your funding designation as intended.
Volunteering can introduce you to a new charity, give you a glimpse into the work it is doing and open the door for further conversations. VolunteerMatch.com connects people looking for volunteer opportunities with nonprofits that match their interests and have a volunteer need.
Finally, talk to those close to you about your search. Friends and family may have a connection to an organization that would interest you. Religious leaders are sensitive to a community’s charitable needs and can recommend a nonprofit that advances a cause you hold dear.
Dotting the I’s and Crossing the T’s
An emotional, values-based connection with a nonprofit is key, but digging into the numbers is another important step. Tax-exempt organizations with $50,000 or more in gross receipts are required to file IRS Form 990. The form includes information about the organization’s activities and governance, program accomplishments, stewardship of donor investments, governing body and management policies, executive compensation and expenditures and assets (2). Form 990 is a view into how your investment may be applied to programmatic offerings, how overhead is handled and how a nonprofit is working to grow its impact.
These forms are available on the organization’s website or through a database like GuideStar. If a charity doesn’t have to file Form 990, ask to see its letter of determination. If the organization is faith-based, ask to see its official listing in a directory for its denomination.
Finally, go tour the organization and have an overview meeting. The development department is there to build and nurture relationships with donors. A reputable charity welcomes conversations about its mission, goals, research and financial stewardship. If an organization isn’t transparent about those topics, walk away. You should feel comfortable providing support to the charity and excited to partner with it to work toward its goals!
Taking the time to research and vet a nonprofit can lead to life-long partnerships between you and the charity. Provide financial support and volunteer your time knowing you selected an organization that matches your passion, is transparent in its operations and is fiscally responsible. These long-term partnerships will help lead to sustainable change and move the needle on issues important to you.
Resources for Help in Finding and Vetting Nonprofit Organizations:
1 Guidestar.com, | 2 https://www.irs.gov/charities-and-nonprofits
Ellerbrock-Norris Wealth Strategies is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.