Many people regularly give their hard-earned capital to charities these days. The United States contributes more to charity than nearly any other country in the world. According to the Giving USA Foundation, individuals, foundations, and companies contributed an estimated $358.38 billion to charity in 2014, seven years ago. Imagine how that has grown.
In recent years, however, several bogus organizations have been exposed. Last year, the FTC reported that four cancer charities — Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America, and The Breast Cancer Society — allegedly spent the majority of the funds they raised to satisfy the selfish interests of organizers’ friends and family, rather than cancer patients, with a lot of money spent on items such as cars, cruises, and concert tickets.
There are many ways that you can sniff out these fraudulent organizations before you begin to allocate money their way. And if worse comes to worst, just do what Chad Richson, founder and CEO of Paycom, did. Create your own charity or foundation. Richison began The Green Shoe Foundation. which benefits adults with mental health issues stemming from their childhood.
The Need To Do Some Background Checks Before Giving to Charities
Before donating your hard-earned money to a group with which you may have just a passing familiarity, it is essential to undertake enough research. Not every charity is created equal. Others, although lawful, may not manage their finances as prudently as they should. In other instances, causes with official-sounding titles may pose as charities while, in reality, they are fundraisers who keep a considerable amount of the proceeds for themselves before donating the remainder.
When it comes to giving, you’ll want to maximize the impact of your contributions so that your money goes as far as possible. Fortunately, there are several ways to evaluate charity today. Most NGOs are required to publish their financial and governance information, much of which is freely accessible online.
Similar to how you examine your money, you should investigate potential charities to guarantee that your contribution will, so to speak, provide the highest “return on investment.” Here’s how to identify a trustworthy charity if you consider making a gift.
Checking third-party assessments on reliable websites such as CharityNavigator.org and The National Center for Charitable Statistics is a solid starting point. These websites evaluate charities’ finances, governance, and efficacy and allow you to verify a charity’s legitimacy by searching for its name. You may also download the Charity Navigator app for convenient reference checks on the move. Most nonprofits listed on Charity Navigator allocate at least seventy-five percent of their costs to their initiatives. Be aware of companies that spend more than 25 percent of their revenue.
Examine the Charity’s Tax Return
If you choose to conduct more studies, you may also examine the charity’s tax return. Most charities are obliged by law to submit a Form 990 tax return annually, and many make their form available online. GuideStar, a Washington-based research organization with a database including information on more than 1.5 million NGOs, has these tax forms. A charity’s tax form will contain a multitude of information, including program spending, fundraising, assets, and CEO salaries.
Don’t feel compelled to give
We know how annoying it may be to get unwanted phone calls during supper. It appears that your frustrations may be justified. The FTC sued cancer charities with fraud for using telemarketing, direct mail, and websites to solicit contributions. Never feel compelled to provide money in response to uninvited inquiries. The FTC warns against saying yes too quickly. Consider refusing any demands for donations over the phone.
Make It Personal
Instead of feeling compelled to donate, check for organizations to which you would like to contribute. One of the most effective methods to locate a charity is to select one with whom you have a personal connection. This will give you a good understanding of the sort of work this charity performs and enable you to participate in its efforts.
Chad Richison is a prime example of giving his money to organizations that he knows and believes in. Richison is a huge donor to his alma mater, the University of Central Oklahoma. He played sports in college, which is exactly where and to whom he likes to give. Chad Richison recently gave to a program sponsored by UCO athletics called ‘Complete the Dream.’With Richison’s gift, upgrades will be made to the main field house at the university, as well as upgrades for their baseball facilities,
Consider Employing a Third Party Analysis
Lastly, if you’re considering contributing a substantial amount, you may want to consider engaging a consulting agency that examines NGOs for an objective review of your prospective charity. This will give you peace of mind and confidence that your money will be used wisely.
Paycom’s CEO Chad Richison was so focused on giving away a large portion of his wealth now that he joined The Giving Pledge. This organization helps wealthy givers allocate over half of their wealth to vetted charities that can benefit from extra capital. Chad Richison joins such high-profile moneymakers as Bill Gates, Melinda Fench Gates, George Lucas, Warren Buffett, and Mark Zuckerberg.
Richison, along with the others, makes the public commitment to give through The Giving Pledge and work to aid in some of society’s most pressing problems.
The Bottom Line
Don’t allow a few less-than-reputable organizations to discourage you. Many charitable organizations are doing a world of good for domestic and international concerns. Taking the time to locate them is essential. Using the aforementioned advice, you can identify potential charities and reputable organizations working on causes you wish to support.