Donating Responsibly

88% of American households donate to charity. That is a pretty huge majority. Also, statistics reveal that charitable giving in the U.S. is on the rise. All of this is great news! The money that God blesses us with should be used to help people. However, as Americans are giving more, it is critical, now more than ever, to be responsible donors. What do I mean by this? Basically, we should all do due diligence to make sure that we’re actually helping what we think we are. So, I thought for this week’s suggestion of how to change the world, I would write some thoughts about donating responsibly.

First, when considering donating to a nonprofit- peruse the website, read reviews, and get some general information. Also check Google News for recent press about the nonprofit. Make sure that your values align with theirs so that your money is doing what you want it to do.

http://www.guidestar.org is another great resource

Then, a great tool to use is Charity Navigator, a tool that assists donors by ranking nonprofits on the basis of financial accountability and transparency. There are significant limits to the metrics that Charity Navigator uses, however. For example, there is no way to know how well a charity is actually accomplishing their mission based simply on their ranking. Also, if a nonprofit has a highly paid CEO or spends a lot on overhead, don’t necessarily count them out. Think about the nature of that nonprofit’s industry by comparing them to other similar organizations. For example, nonprofit hospitals understandably have much higher overhead costs than homeless shelters. Also, realize that, while I am not claiming that nonprofit CEOs should be rolling in it, top talent costs top dollar. If paying six figures to an expert will accomplish the mission of the organization in the best way possible, then it may be worth it.

Another great tool is your phone. Call the charity directly and ask questions about any yellow flags you saw in your research. If they are able to satisfy you that they are doing good work, please donate! If not, find an organization with a similar mission that may use your money more effectively. In my experience, organizations love working with you to make sure that you are a comfortable donor.

While this is a lot more work than simply donating on an emotional impulse or because you know the nonprofit brand, it will be a much more rewarding experience for both you and the cause you are trying to help through the donation.

Happy Giving!