Choosing Wisely: How To Direct Your End-Of-Year Giving

How To Choose A Charity

There are more than 1.5 million registered charities in the United States. There is quite literally something for everyone and nearly all of them are operating in resource-constrained environments and could benefit from your contribution. So how do you choose? When choosing a charity to support with your time, talent, or treasure we believe it’s as critical to establish trust in the organization’s operations as well as pride in its impact.

Moving the needle on complex social and environmental issues is hard and even the best intentions and the most strategic organizations will face failures and setbacks. Our goal is never to evaluate an organization on perfection but rather on the quality of its impact, the resourcefulness of its operations, and the trustworthiness of its administration. We recommend evaluating an organization based on its mission’s alignment to your own values, the quality of the programs it delivers, its impact to date, and its financial integrity. Here’s how to get started.

1. Identify the Causes you Care About

The first place to start is to identify your personal priorities. Whether we’ve been personally impacted by an issue or know somebody who has, whether we work in a specific field or want to invest in our local communities, it’s important to reflect on which causes we truly care about. With limited resources—time, talent, or treasure—the world needs more people investing in those organizations that are a reflection of their own values.

“The world needs more people investing in those organizations that are a reflection of their own values.”

What area of social or environmental impact do you care about most deeply and what organizations are focused on that cause? Whether you’re a single mom looking to support teenage mothers or a veteran committed to improving access to quality health care, there is a charity focused on the issues that are important to you.

2. Take a Holistic View of the Organization

As an individual donor, it’s extremely rare that you will be able to specify the use of your donation. While grants and other large philanthropic investments can be earmarked for certain programs, as an individual you should be comfortable supporting the organization at large—that means staff and overhead as well as programs and impact. After you’ve identified an organization based on your own values, make sure their mission is one that resonates with you and take a look at all of their areas of impact. Are there any services or programs that they offer to which you are adamantly opposed? It’s important that you’re comfortable supporting all of their impact areas even if there are some that appeal to you more than others.

3. Evaluate their Mission & Model

“Before donating it’s always worth making sure that an organization’s model is in fact an effective means by which to achieve their mission.”

Even the best of intentions can be poorly executed. Before donating it’s always worth making sure that an organization’s model is in fact an effective means by which to achieve their mission. Do the services they provide directly impact the social or environmental change that they claim to focus on? Poke around their website and learn as much as you can about the programs or services they offer.

Entities such as GiveWell exist to identify some of the highest impact nonprofits, evaluating organizations’ effectiveness and scalability based in part on their model being supported by academic research.

4. Look for Evidence of Impact

Any charity worthy of your donated dollars should be able to show rigorous and routine evaluation of its impact. While emotional and seemingly compelling, anecdotal evidence is never enough. Regular monitoring and evaluation practices are critical to an organization’s ability to refine and grow an impact and in turn deliver on its mission. Annual reports are published by most charities and are a great place to gain insight into the organization’s impact over the past year. Charities will often quantify their impact in terms of dollars raised, services delivered, lives reached, etc.

5. Evaluate their Financial Trustworthiness

An organization’s annual report is also the first place to look for financial stability. The document should summarize the state of their finances including income, expenses, and sources—all of which provide additional insight into the health and integrity of an organization. Likewise, every charity is required by the IRS to file a 990 with all financial details. Many organizations post these publicly on their websites and they can be a great place to start to learn about an organization’s revenue, expenses, and mission. Additionally there are services like GuideStar and Charity Navigator which you can pay for even more detailed analysis of a nonprofit organization’s financial state.

6. Get Involved & See For Yourself

“While research is an effective and efficient place to start, there is no better way to evaluate the worthiness of a charity than to get involved and see for yourself.”

While research is an effective and efficient place to start, there is no better way to evaluate the worthiness of a charity than to get involved and see for yourself. Volunteering your time to help deliver their programs, donating your services to grow their capacity, joining their board to guide their growth—these are all great ways to get an inside look at the integrity and impact of a charity before giving your dollars.

Regardless of whether you’re offering time, talent, or treasure to a charity of your choice, it’s important that you ultimately trust the organization to leverage that investment to grow their impact. Individual dollars can be just as valuable invested in a program as they are in quality personnel to run that program, and it’s critical that you trust the experts within any organization to make those allocations accordingly.