Sadly, it’s more often than we’d care to think that not-for-profits and other charitable organizations get caught being, how do we say, less than charitable. Situations where the money is used more on marketing than on actual relief or direct funding for those in need, or perhaps egregious usage of funds that are clearly beyond the necessary scope of running the organization (a wounded vets organization using private jets)… in an ideal world all organizations would be transparent, frugal and honest in their business dealings, but we know that to be an ideal rather than the rule. If you’re going to give your hard earned money to a charitable organization you kind of want to know where your money is going, right? While there are no certainties in this world, fortunately there are a few online resources that you should be aware of and before you part with a dollar to help out its worth a few minutes of your time to check out.
The two most well respected and widely used online databases and vetting organizations are Guide Star and Charity Navigator. Both of these are essentially voluntary, not-for-profits are by no means legally required to register with these organizations, but they really should. In a nutshell both do lengthy “interviews” with the not-for-profits that register with them, asking for a wide range of information, from financial statements, to IRS filings, to Q and A’s about their revenues and expenses, officers and directors. Each has their own grading system, Guide Star uses the old fashioned Bronze, silver, gold designation, and Charity Navigator use a four star system. Needless to say, the higher the ranking, the more transparent the organization is and the more confident you should feel that your money is going to good use.
If a Not-For-Profit isn’t registered with either one, it doesn’t mean that they are creepy, or poorly governed, actually they may not even know about their existence. If someone is asking you to support a cause and their organization is not registered with either, gently ask them or mention to them “Hey I tried to find you guys on Charity Navigator or GuideStar and noticed you weren’t listed, whats up with that?”. If they sound surprised and honestly want to know what you’re talking about then tell them, if they give you what sound like a lame excuse, it probably is.
Guidestar allows any not-for-profit to register, and getting the minimum “Bronze” rating is pretty simple, there is little excuse, other than ignorance, for a Not-For-Profit to be absent from the site. Charity Navigator is the tougher of the two and getting even a basic listing there is a feat in and of itself.
Note: Most Community Foundations are listed on both Guidestar and Charity Navigator, but their donor advised funds probably are not, remember the “foundation” is the actual nor-for-profit, the donor advised fund is more an individual grant making arm of the foundation that supports specific purposes and particular goals. Sound confusing? Yeah it sort of is, and we’ve addressed the differences between a community foundation and donor advised funds separately.
As we fade off in to other topics, as its so easy to do, the basic message we want to get across here is this, there are resources available to vet not-for-profits, you should make use of them.