Giving Wisely
Donors are always encouraged to gather information about the organizations to which they contribute. If a donor is uncomfortable with information they find, the donor should seek clarification. The organization in question should always be given the opportunity to clarify issues.
To assist donors in making these critical decisions, Michigan Nonprofit Association, Council of Michigan Foundations, Michigan Association of United Ways and the Michigan Attorney General have developed a guide: Giving Wisely - Helping Michigan Citizens Be Savvy Donors.
Download Giving Wisely - Helping Michigan Citizens Be Savvy Donors (pdf)
Donor Checklist - Tips for choosing a charity
- What are the organization’s purposes and programs? All charities have a mission and provide specific charitable programs and services in order to serve that mission. This information should be prominently featured in all of the group’s fundraising appeals and match your goals as a donor.
- How much of your donation will go towards programming rather than administrative and fundraising expenses? Charities use your donations not only to carry out their charitable programs, but also to pay for administrative costs and fundraising (which may include commissions to companies that solicit using telemarketing or direct mail). You have the right to ask exactly how your funds will be used. Although there is no magic percentage in terms of how much money an organization should spend on overhead, it is smart to ask a charity what percentage of your donation will directly support programming.
- Is the donation tax deductible? Only donations to 501(c)(3) nonprofit organizations are deductible on the federal level. Make sure to ask if the organization has received this tax-exempt status from the IRS. For more information, visit www.irs.gov/charities.
- Does the organization have measureable goals? Ask about the organization’s recent accomplishments and what its goals are for the next year or two. You want to make sure that the organization has a proven track record. Consider asking the organization, or visiting www.guidestar.org, to review the organization’s IRS Form 990 for the most recent tax years to learn more about the organization’s operations and finances. Visit or volunteer at a local charity to learn more about the effectiveness of their programs.
- Is the organization licensed to solicit funds from the public? Under Michigan law, most charities must be licensed before they solicit funds. To find out if a charity is licensed, visit www.michigan.gov/ag and click on the Charities hotlink. If an organization is not listed or you would like more information, contact the Attorney General’s office at (517) 373-1152 or ct_email@michigan.gov to check up on the organization.
Beware of Bogus Charities – Warning signs for fraudulent groups
- Bogus bills - Phony invoices are sent to you even though you never pledged money to the organization.
- Evasive, vague or unresponsive answers - A telemarketer refuses to give you answers to specific questions about the charity and how it uses its money.
- Words in a charity’s name – A “look alike” charity uses a name very similar to that of a well-known organization.
- Adamant telemarketers – Allow you no time to consider your pledge and insist on collecting your donation immediately.
- Refusal to send information – A telemarketer won’t send written material about the charity for you to review before you give, often using the excuse of mailing costs.
- Emotional appeals – Telemarketers or mail solicitors who use high-pressure tactics or make you feel guilty about not contributing.
Don’t Just Hand Over the Money - Tips for making the actual donation
- Make your contribution by check so that you have a record of your donation.
- Make the check payable to the organization, never to an individual.
- Ask for and keep receipts from the organization indicating how much you donated, the date and its intended use.
- To avoid ID theft and fraud, use caution before giving credit card numbers over the phone or online. If you are concerned, ask the organization how it will use and safeguard your information. For more information, see the Attorney General’s Consumer Alert on ID Theft at http://www.michigan.gov/ag/0,1607,7-164-34739_20942-80479--,00.html
- When donating online, check to see that you’ll be using a secure site for financial transactions - one starting with an “httpS://” (not “http://”). Even secure sites can be “spoofed” by scammers – for more information, see the Attorney General’s Consumer Alert on “phishing” at http://www.michigan.gov/ag/0,1607,7-164-34739_20942-151331--,00.html
Additional Resources for Nonprofit Donors:
- www.give.org - The Better Business Bureau Wise Giving Alliance Charity Accountability Standards serve as a guide to help donors understand acceptable nonprofit practices.
- www.charitynavigator.org - This site provides in-depth analysis of the financial health of the nation's largest charities.
- www.charitywatch.org - CharityWatch rates top nonprofit organizations, provides tips for wise giving and lists frequently asked donor questions.
- www.guidestar.org - Guidestar provides IRS Form 990's for thousands of organizations. The forms are easy to view and include financial data and narratives about objectives and program accomplishments. Also see donor resources for relevant articles concerning how to read Form 990. Free registration is required to view 990s.
- www.boardsource.org - Frequently asked questions concerning nonprofit board governance are posted on the site and visitors can ask questions about legal obligations of nonprofit boards.
|
