by Ken Nopar, Senior Philanthropic Advisor, AEF

Some of the main reasons why families and individuals donate to charity are a passion for a cause, a desire to give back, and a wish to make a positive impact on the world. While many donors have a connection to the non-profit organizations that they support and are confident that their generous contributions will be put to good use, some donors are not sure how to evaluate charities and are unsure where to turn for help.

Most donors prefer to do the research and work themselves. Online websites like Guidestar and Charity Navigator can be helpful to a limited extent, but especially when donors are considering an amount that is significant to them, donors should vet the charities more thoroughly. AEF also offers a Philanthropic Advisory Firm Referral Program to refer its donors who need additional help identifying and vetting charities, developing a charitable mission, getting their family involved, or evaluating the success of their grant making to these charities.

It is also important that donors should discuss their charitable giving plans with their wealth, legal, and tax advisors. These professionals at a minimum will be able to help their clients determine which assets should be donated to minimize taxes and enable them to have a greater impact upon the charities in both the short and long term.

Once donors have identified a charity that they wish to support, they should further evaluate the organization by doing the following:

  1. Look at the charity’s mission and determine if this is important to the donor.
  2. Look at the outcomes. For instance, how many people has the organization helped, and has that increased or decreased over time? Given the size and budget, is that number reasonable?
  3. Review the financial information. Is it transparent and recent? Are the expenses in line with the budget? Has the budget increased or decreased in recent years? If applicable, how has it adjusted to a decrease in government funding. Look through the current Form 990 and also verify its tax-exempt status.
  4. Talk or meet with the organization’s leadership if the donation is significant enough. Has there been much turnover of key staff members? How can the donation be best utilized? Who will be the primary contact person for the donor?
  5. Identify who is on the board of directors. Are there many or few board members? Are they business or community leaders? Especially if a donor is considering joining a board, she or he should meet with some board members.
  6. Evaluate the main supporters. Are there many funders or few? Have key funders been involved for some time? Does the donor know any supporters?
  7. Discuss with the leadership how the donor can be most helpful in addition to financial contributions.
  8. Visit the organization if possible or volunteer to really get to know the people and quality of the work.
  9. Determine that the organization has a very good reputation.
  10. Feel confident that contributions and efforts will be appreciated and utilized effectively and efficiently.

It is important that donors do not demand too much of the charities, especially when donations are not significant and the staff is small. However, because donors need to feel confident that their contributions will be put to good use, it is in a charity’s best interests to welcome donors’ inquiries and treat them well. The likelihood of long-term relationships increases when the communication between the donors and the organizations they support is excellent.

When these steps are taken, donors will be able to feel a great sense of accomplishment, satisfaction, and pride in knowing that their support is having a significant effect upon the causes and charities that are most important to them.