Hey you, Deep Pockets. Do you know who you're helping?
December 19, 1996
Web posted at: 1:40 a.m. EST
From CNN Interactive Writer Kristin Lemmerman
(CNN) -- 'Tis the season for giving, but who on earth should you give to? Disreputable organizations, aiming to line their own pockets, are working hard to part you and your cash. Their names may be almost identical to those of established organizations you know and trust, making it difficult for you to be sure your money is going to a charitable cause.
Meanwhile, the reputable groups are reeling from the increased demand put on them via government cutbacks. Their hearts are willing, but their budgets are weak, and they may wind up spending more of the money you send them on keeping afloat than helping the community. What's a kind-hearted person to do?
The value of planning
First, set your priorities. Do you want your money to go to a specific cause, or a specific area of the world? Second, set your budget. How much do you think you can give? Third, do your research!
Going in reverse order, you may want to start your research with the Internet Nonprofit Center, a site which is chock-full of useful and FREE information.
The center recognized that credibility is a big problem for charities, so it has compiled a database of 1 million tax exempt entities in the United States. You can find information on all of them at the center's site -- most of it not gathered from the entities themselves, who might be inclined to be biased.
The Internal Revenue Service is one of the site's main sources; its data is collected into a Nonprofit Locater (sic), which you can search by state and name. The database is updated on this site roughly every six months.
The site also links to general directories or sites of interest to donors and volunteers -- but it doesn't link to the web pages of individual organizations, referring groups that want a link to other sites. And, for people considering donating, it has a "Donor Defense Kit" of questions you should ask people soliciting a donation, and information on how to evaluate a non-profit's financial statement.
The site itself is unique in that all of the people working on it are volunteers, so much information (including the IRS data) that other sites have to charge for is available here for free. The site is seeking tax-exempt status.
The National Charities Information Bureau is another good site for researching good causes. The NCIB has established a set of nine criteria for determining whether a charitable organization is financially sound and ethically above-the-board; the evaluation standards, which are fairly strict, are posted on the site. Though they're strict, they are also straightforward -- you won't have to be an accounting major to follow the gist of each one.
NCIB has evaluated close to 400 different charitable groups in the United States. You can find out right on the site how they fared (pass, fail, incomplete data) when their affairs were scrutinized by the group; however, if they didn't pass all nine criteria, you have to order a full report to find out exactly why. NOTE: If you're going to base your donation decision on this site, be sure you know what the criteria are!
The groups that failed to meet all nine of the NCIB's standards aren't necessarily shady underground organizations trying to steal your money -- for example, few doubt the motives of Mothers Against Drunk Driving or the Cousteau Society, both of which failed some part of their test. Running an agency at a deficit for several years in a row earns that group a black mark, as does spending more money on running the agency than on spending it on the agency's cause.
Who will you help?
CharitiesUSA would like to help you figure out where your money should go. It has a comprehensive listing of charities, broken down into 12 categories (like children, medical research, and human rights).
Each of the categories links to information for an umbrella organization (for example, the Medical Research Agencies of America). If you click on the "View the Members" item on the umbrella's page, you get a long list of the groups that fall under that umbrella organization. The site promises that all the non-profits listed are pre-screened and "high quality," but you'll have to take their word for it, since they don't reveal their criteria.
The site also posts charity-related news, which runs the gamut from food relief for Russia and Azerbaijan to an education program started to educate the Jewish community about domestic violence.
Site uses Java.
Almost every American is aware of the United Way, the ultimate umbrella group -- you may have met one of the organization's volunteers in the shopping malls asking for donations, or your workplace may encourage you to give part of your paycheck to the organization. The United Way's mission is to raise money cheaply, then give it to non-profit groups throughout the United States, who can decide how the money can best be spent in their own communities.
The United Way web site has a clear and attractive layout and answers most of the basic questions about the organization, including how it works, and where you can find a local United Way branch.
An all-in-one site
Benefice On-Line is unique in that you can research charities, pick the ones that suit your tastes, and then start a "personal giving plan" on the site for free.
Benefice organizers set up the plan in the hopes that new technology will help charity organizations, partly by providing donors the information they want (and thus generating more donations) and partly by helping charities lower their costs. Charities must be registered to list with Benefice; aside from that, any charity can list through them.
The giving plan is designed to help you keep track of both where your money is going and how the non-profits you're supporting are spending your donation. When you register, you can also ask for information to be sent to your e-mail account on tax deductions and news regarding non-profits active in specific fields.
Complain about the bad apples
If your charitable nature has been abused, you're probably a pretty nice person, and your initial reaction may be embarrassment and a great unwillingness to admit you were scammed. But if you don't tell, somebody else will get hurt.
Con artists and shaky foundations are a problem worldwide, so much so that groups have been created everywhere to weed out the bad guys. In the United Kingdom, that group is the Charity Commission, a government-run commission whose intention is to help charities run properly, and help the public retain confidence in non-profit groups.
The commission registers charities and investigates complaints. If there is evidence of intentional fraud or other wrongdoing the group investigates and tries to get things straightened out. This site is most useful to people in the United Kingdom, since it deals mostly with local laws governing charities. However, it does include tips that could be helpful to donors just about anywhere.
In the United States, the Better Business Bureau fills slightly larger regulatory shoes, giving oversight to not just charities but all other types of business in the United States and Canada. It has dedicated one area of its web site, the Philanthropic Advisory Service to checking up on charities; on-line reports are available.
The PAS determines which non-profits it will evaluate on which ones the most people have asked about. Information on requesting a report is included on the site.
Those that are evaluated either pass or don't pass the Better Business Bureau's standards for charitable donations. If the group has a history of not responding to donors' complaints, or if it didn't provide enough information to the PAS for them to evaluate its operations, the evaluation will say so.
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