There are many books and websites out there that contain a lot of great advice about giving wisely. Especially if you are looking to give a large amount, it’s definitely worth having a look at the many resources available – in addition to consulting a lawyer and/or tax professional. That said, as we were building the My Favorite Charities module for Little Birdie Me, we came across a few interesting tidbits of information that we thought might be worth passing on, whether you are giving a fiver, a tenner, or the entire cookie jar!
We were always vaguely aware that there was some kind of distinction to be made between ‘charity’ and ‘philanthropy’ but, if you’d asked us a year ago, we wouldn’t have been able to articulate it. Now, we are able to tell you that charity usually refers to assistance to someone (or a community) that is immediately in need of aid – for example, a homeless shelter or soup kitchen performs charitable work. Philanthropic efforts, on the other hand, tackle the root causes of problems – so, for example, trying to identify systemic failings that lead to homelessness and trying to correct those failings. You’ll find folks sometimes use the terms interchangeably (we probably did too before we consulted the dictionary!), but the distinction is actually a good one to make philosophically (as well as verbally), and may help coalesce thoughts about which causes you’d like to support.
Before giving, it’s definitely worth doing a bit of homework. Not all nonprofits are managed equally well. The problem? Doing research is not always a clear-cut business. We discovered that there are organizations called “charity watchdogs” – their mission is to rate the fiscal health and effectiveness of nonprofits. We thought this was a spectacular idea! And, we still do. The thing is, as we read more about philanthropic and charitable giving, we realized that there is an ongoing debate within the nonprofit world as to how best to evaluate charities and whether the charity watchdogs are doing this as effectively as possible. One of the issues raised was that, even if a charity appears to be in good financial health, it can still be tricky to evaluate its effectiveness – in other words, a charity’s management team may be efficiently managing the organization’s monies and spending the bulk of it on their stated mission, but are the efforts being funded by the monies actually making progress? Are they using the best possible approach to solving the problems they are tackling? Is the charity watchdog relying on information collected by an objective party, or are they relying on information provided by the charity itself to determine their effectiveness? Another thing to consider is that a charity watchdog’s definition of what constitutes the ideal nonprofit may not entirely gel with your own. For that reason, it might be worth consulting more than one watchdog, in addition to direct research on organizations you are thinking about supporting. Our takeaway: while charity watchdogs are a great asset to the sector, their role is still evolving and ever-improving. As such, it might be wise to contextualize their conclusions with additional research of your own. Here is a list of some of the watchdogs we have come across:
While charity watchdogs explicitly set out to rate nonprofits, there are also organizations out there – often government commissions (but not always) - that don’t weigh in with an opinion but rather gather information for individuals to study directly when researching a nonprofit. If you are US-based, GuideStar is a prime example. They explicitly state in their ‘About’ section that they are not a watchdog or ratings agency. Rather their focus is on aggregating data about all IRS-registered nonprofits. This means that even if you’re interested in giving to a small, local charity that is not rated by the big watchdogs, you may still be able to find some information about the organization there, including quick access to their tax filings (i.e. Form 990) which should include a salary breakdown for the highest paid employees (and an estimate of how many hours per week they work), along with statements of revenue and expense. If you are not US-based, similar outfits around the globe include the Australian Charities and Not-for-profits Commission, the Charities Regulator in Ireland, the Charity Commission for Northern Ireland, the Scottish Charity Regulator, the Charity Commission for England and Wales, the Canada Revenue Agency’s Charities Directorate, and Charities Services in New Zealand.
This might seem an obvious one, but run a quick internet search on any charity you are interested in – sometimes interesting things pop up, be it Yelp reviews on that animal shelter you are looking to support, or Glassdoor reviews from employees, often offering a picture of how management is viewed internally. As with any online reviews, they should not always be taken at face value. However, if there is an observable trend – either negative or positive – it may help you get a better picture of the culture and effectiveness of an organization. Also, try running a specific nonprofit’s name through a search engine along with the word ‘news.’ For example, as we write this, the Metropolitan Museum of Art in New York has a four-star rating from Charity Navigator, their highest rating. A quick news search, however, will lead to an article in The New York Times, detailing both budgeting and management issues that have recently come to light. Perhaps these issues have been resolved, or perhaps they would have no impact on your decision to give - either way though, it’s best to make an informed decision, wouldn’t you agree?
You’ve probably heard of Cyber Monday and Black Friday, now entrenched in the holiday season. A newer addition to the line-up is #GivingTuesday. The first Tuesday after Thanksgiving (U.S.), #GivingTuesday was created by folks at the Belfer Center for Innovation & Social Impact at the 92nd Street Y in New York City, but it is intended to be a global day to both celebrate and encourage giving. It launched in 2012 and has been rapidly picking up steam since then. For example, on the most recent #GivingTuesday (just two days ago), we took the opportunity to share a list of twelve charities that have Amazon wish lists (a great way to use Amazon points or to know exactly where your money is going!) and used the list ourselves to do a little giving. The #GivingTuesday team actively utilize social media to maintain momentum and if would like a window into how folks all over the globe get involved in charitable and philanthropic efforts, it’s worth checking them out!
We hope these bits and bobs we picked up as we researched the field help others as they look to support good efforts, be it locally or internationally - and, if you have any tips on researching nonprofits, that you’d like to share, we’re all ears!
Why sign up for a free Little Birdie Me account?
- No more unwanted gifts! Create a gift profile to let folks know what you like (and don't like!) to receive.
- Link to existing wish lists, registries, Pinterest boards - and more!
- Keep track of the gifts you give, and budget for gifting events.
- Follow family and friends' gift profiles to make your own gift giving easy peasy.