While giving is easy (and it is certainly easy to find a cause to give to), giving well requires thoughtfulness and planning. Most of us want the hard earned dollars we give to make the biggest impact possible, but how do we know if what we are giving is being utilized efficiently? How do we know if a charity is legitimate, or whether what we give actually accomplishes what they claim? How can we be sure that we are giving our charitable ‘kiss’ the attention it deserves?
In our present information age, the internet is turning up some creative solutions to this age old dilemma, making it easier than ever to ‘check-up’ on charities and be thoughtful in our giving. We have reviewed three such sites for you, and hope that you will find them helpful next time you engage in that ‘kiss’.
www.GuideStar.org
GuideStar is a true ‘data-base’ of non-profit information. Searching for non-profits in their data-base is free and does not require registration, however if you register (also free) you will have access to more complete information. The databases they maintain are a combination of information provided by the ‘non-profit’ itself, and data they collect from other sources (such as the IRS). You can search the site by non-profit name, though for local charities, We found it more helpful to search by location (i.e. Grand Junction, Colorado). We did receive hits for about 30 local groups. The information accessible to a non-registered user was basic, though instructive, and certainly would be helpful in determining the ‘legitimacy’ of an organization, if nothing else.
www.GiveWell.org
Founded by two Ivy League grads who gave up their high paying jobs as hedge fund analysts in order to use their skills to evaluate charities, this site upholds rigorous standards, recommending less than 2% of the charities they review. They do maintain a highly international focus, with most of the charities on their list serving developing third-world countries. Their philosophy is that, by donating to the developing third-world, every dollar gets ‘stretched’ further, so that even a small gift can have a major impact. We don’t know how instructive this site would be for local giving, but it does include a neat ‘Do-it-Yourself’ link, where they share questions they recommend you ask when conducting your own analysis. These questions could be applied to any charity and are broken down very specifically by type of organization.
www.CharityNavigator.org
This site reviews a lot of national charities, and is a good resource for topical searches (i.e. breast cancer awareness). It does not review any international charities (only those based in US) or organizations exempt from filing IRS form 990, which excludes many religious organizations (i.e. the Salvation Army). We didn’t find any local charities listed, save a couple based out of Denver.
A quick spin around these sites will, if nothing else, show you the questions that others use to critically evaluate organizations in the non-profit world. We know that clients have your own favorites, but when evaluating new organizations, this perspective can be helpful. One of the key issues is how much of each dollar is spent on administration, versus going out to those in need. So when clients tell us about organizations like the United Methodist Committee on Relief (Umcor.org), for example, which says that it spends 100 percent of designated donations on the projects specified by their donors (the United Methodist Church handles all of the administrative functions as a ministry of the church), it's hard not to get excited about the good that comes from contributions to that organization.
Money represents a lot of different things to different people. To some it represents security. To others, achievement. When organizations are able to use money to present the hands and feet of Christ to those truly in need, however, it can accomplish miracles.
Douglas B. May, CFA, is President of May-Investments, LLC and author of Investment Heresies .
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