With the recent federal lawsuit against 4 “cancer charity scams,” it’s hard for Americans to know how to ensure that their donations actually go the desired cause.

There are over 2 million nonprofit organizations in the U.S. and over $300 billion dollars is donated to them every year! The vast majority of these nonprofits are doing great work and are well-run. Unfortunately, a few others put personal gain before their stated mission and legal responsibilities.

So how do you know which nonprofits to support?

Before you get involved with a nonprofit whose mission is really important to you, check them out. It’s a little like dating…you want to get to know someone before you commit. (And you nonprofit leaders should pay attention here).

There are 3 simple steps to take:

1. Research the research. There are already organizations such as Guidestar and Charity Navigator who provide updated data from a variety of sources on all nonprofits registered with the IRS. Some assign a star rating too, so it’s easy to see at a glance if you’re dealing with a 1-star or a 4-star organization.

Here is the type of information available on these sites that you want to review:
* 990 form – this is public information and in addition to seeing how they are funded and where the money goes, you can see who they contract with for outside services, how much top employees are paid, and more
* Governance practices – are there policies and procedures in place, including conflict of interest?
* Bios and qualifications of the CEO and board president
* Programs offered and their impact –what have they accomplished and how many people benefit from their work?
* You can compare organizations to each other also which may be a great feature if you’re exploring who to support in a certain cause area
* There is also an area for the public to write reviews – be sure to check those out

One caveat – much of this information is self-reported, so you may want to look more closely. But it’s a great place to start, and if an organization isn’t listed on these sites, that’s a red flag.

2. Do your own research. That’s right, a little investigative activity could uncover important information you care about.
* Visit their website and get a sense of how they operate and communicate.  Do they have a clear case for support?
* Look at their board and staff list and google those players; or look them up on LinkedIn and see who they are connected to. Do you know anyone who could share their insight and experience?
* Review their annual report (it’s often posted on their site)
* Google them – news reports will be listed and you can see what type of press they get
* Ask around –especially if they are local, and listen for what comes up about their reputation

3. Visit them. If you’re interested in a local charity, always, always go visit their location. No need to announce yourself.
* Ask for a tour and get a sense of the place ( and if their work is done off-site, it’s still worth an office visit)
* Ask questions of your tour guide or ask to meet the executive director and ask her questions
* Ask what their goals are and how they measure success. If the folks there at that time aren’t able to answer these questions, leave your number and ask for a call back.
* Volunteer there – this is a great way to get a sense of how an organization operates

There’s no guarantee you can learn everything about a nonprofit from the outside, but these 3 steps will go far in equipping you to make a decision about whether or not to get involved.  You don’t want to walk down that aisle until you are confident in your choice.

Need help interpreting the information you collect? Let me know and I can help you.

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