Not All Charities are Created Equal
by Joanna Posner

If making a charitable donation is on your radar, see how you can find a quality charity without getting duped.

With the holiday season in full swing, it’s the perfect time to get into the giving spirit. But with nearly 1.8 million nonprofits in the U.S., how do you separate the good from the bad? Laurie Styron, an analyst with the American Institute of Philanthropy (AIP), says charities run the gamut, from excellent ones who are doing great things to organizations that do little more than fundraising and call themselves a charity.

But before filing through the cornucopia of nonprofits to find one that will put your resources to good use, you can narrow down your options by identifying what category you feel the most connected to.

“In recent years, we’ve seen the trend of people turning personal tragedies into worthy causes, which is wonderful,” says Janet Camarena, director of the Foundation Center (foundationcenter.org). “But you can also think about what led to successes in your life.”

Styron says most people want to make sure their donations are primarily being used for the charity’s program. To find out more about how funds are allocated, the AIP website, charitywatch.org, is a good place to start. The organization has taken a hard look at many of the charities across the nation and has handpicked the top-rated organizations. Listed by category, the charities that made the cut use 75 percent or more of their total budget on program costs and spend $25 or less to raise $100. In other words, you can be rest assured your money is being spent in the way you intended it to be spent — on the issue at hand. Another place to go to locate a quality charity? CharityNavigator.org.

Camarena points to another pre-screening tool: The San Diego Foundation. The Foundation’s public library provides access to a database that the uninitiated donor can use to see which charities have been funded by some of the nation’s leading foundations. “These foundations make nonprofit organizations jump through hoops to get gifts,” says Camarena, “so if the nonprofit has passed the foundation’s test, then they will most likely pass the donor’s test as well.”

Because community foundations tend to fund a broad number of areas, The San Diego Foundation itself can also serve as a research point. “There are program officers who intimately know many charities in the community, because they evaluate them regularly to make grant-making decisions,” says Camarena. “A donor can specifically ask which charities in the field of health and human services or substance abuse are doing really good work.”

While some donors are proactive about their donations, Styron points out that the number one reason people give to a charity is because they’re asked to. So whether you’ve found a particular charity that resonates with you, or you’re reacting to a solicitation — and the charity in question isn’t listed with the aforementioned sources — the message is clear: do your due diligence.

The last thing you want is for your money to be used for the wrong reasons, or worse yet, to go to illegitimate charities — which, during times of crisis, can increase tenfold. According to CharityNavigator.org, in the weeks following Hurricane Katrina, the FBI identified more than 4,000 bogus websites that were attempting to capitalize on the goodwill of generous Americans.

Jack Raymond, chairman of The San Diego Foundation’s Board of Governors says, “If you’re investigating a charity, you first have to confirm its nonprofit status.” This is something you can do on the IRS’s website (irs.gov/charities).

To look even closer at a charity, request their annual report, which will indicate how the group spends its money and what some of its programmatic priorities are. Camarena notes that smaller nonprofits may not have an annual report so you can instead view their 990, a tax form that can be found on the Foundation Center’s website.

Styron cautions that if a charity is pressuring you on the spot – without giving you the time to research and make an educated decision – that’s usually a red flag.

Making a contribution to a cause you care about has a two-fold benefit: not only do you feel good about yourself, but your donation is also tax deductible. To take advantage of this secondary benefit, you must obtain a receipt from the charity for any contributions in excess of $250. For anything under this amount, you need a paper record such as a bank statement or a canceled check. Because the tax code is changing all the time, however, Styron suggests consulting your tax professional to make sure nothing has changed that would affect what you can write off.

Experts agree that although giving during the holiday season is a significant step in the right direction, you may want to think about giving as a long-term commitment. “It’s great that people are in the spirit to give during the holidays, but don’t forget to keep giving throughout the year,” Styron stresses. “Because the homeless aren’t just cold and hungry in December.”

Editor’s Suggestion

Modest Needs
Founded in 2002, Modest Needs is an award-winning charity that works to stop the cycle of poverty before it starts for low-income workers struggling to afford emergency expenses like those we've all encountered before: the unexpected auto repair, the unanticipated trip to the doctor, the unusually large winter heating bill.

Modest Needs is funded exclusively by the 'small change' donations of ordinary people making an average gift between $5 and $100 at a time. Donors can read and evaluate applications from real people in need and then choose which application they would like to help fund.

Modest Needs has earned the highest possible charity rating from the Better Business Bureau's Wise Giving Alliance. Through December 31st, all pledges to Modest Needs are being matched dollar-for-dollar by a private foundation.

Heifer International
Since 1944, Heifer International has helped 8.5 million families move towards greater self-reliance through the gift of livestock and training in environmentally sound agriculture.

Donors are encouraged to give the gift of livestock to a family in poverty. For example, the gift of a dairy goat can supply a family with up to several quarts of nutritious milk a day. And because goats often have have two or three kids, Heifer families have the means to lift themselves out of poverty by starting small dairies, that earn money for food, healthcare and education.

Heifer supporters include Former President Bill Clinton, actor Susan Sarandon, actor Ed Asner and journalist Walter Cronkite. Heifer International is rated "above average" with three stars by CharityNavigator.org and is a winner of the Conrad N. Hilton Humanitarian prize.

If you prefer to make an impact closer to home...
Consider supporting the East County Posse. Businessman Greg Brown and 49 of his closest friends founded this non-profit nine years ago to help people right in their own community. An appropriations committee reviews applications and investigates needs. In addition to making donations to local organizations, the Posse has rebuilt a home to better suit the needs of a young paralyzed girl and added a ramp to the home of a woman confined to a wheelchair with many Posse members chipping in materials and labor to get the job done. Visit eastcountyposse.org to learn more.

Mama's Kitchen is a well-respected organization helping local San Diegans affected by AIDS or other critical illnesses. Established in 1990, Mama's Kitchen delivers an average of 702 meals a day with a large staff of volunteers. During the holidays, Mama's Kitchen offers a sweet way to support their cause with their Mama's Pie in the Sky campaign. San Diego’s top bakers, caterers and chefs, including those from Sycuan Resort and Casino and The French Gourmet, generously donate delectable holiday pies. You can pre-order through November 15. Pie buyers can select from more than 30 sites where they can pick up their pies on Wednesday, November 22, including selected Wells Fargo Bank locations throughout the county. Visit mamaskitchen.org to place your order.