While vetting a charity can be challenging in any environment, vetting a charity without interacting in person can be especially challenging. In this three-part blog series, I hope to share a few tips to help you pick and support amazing charities from the comfort of your home.
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Contributed by: Jaclyn Jackson, CAP®
Last time, we learned how to determine whether a nonprofit stuck to its mission with program indicators. However, what if you are pressed for time or lack the CPA relationships to help you through financial analysis? Well, you're in luck because there is help readily available at your fingertips, and I am going to show you where to look online.
Helpful Vetting Resources
GuideStar provides information on a charity's income, spending, mission, and executive salaries. They hold records for 1.8 million nonprofits registered with the Internal Revenue Service. Free parts of the website provide access to each organization's Form 990, the primary IRS filing document for nonprofits. Premium services offer more financial analysis.
BBB Wise Giving Alliance produces reports about national charities, evaluating them against comprehensive Standards for Charity Accountability, and publishes a magazine, the Wise Giving Guide, three times a year.
Charity Navigator applies analysis to each of its charities to come up with its star ratings (with four stars as the highest rank). The site focuses on financial health, accountability, and transparency.
Charity Watch rates 600 charities with a grading system from A to F — and takes a watchdog approach towards exposing nonprofit abuses.
Pro Tip: If you decide to use a vetting site of your choice, look for sites that don't charge charities to be reviewed. his helps mitigate biased evaluation from vetting sites.
You made it to the end of the series! Hopefully, you feel empowered to choose an incredible nonprofit to support this year and that you had just as much fun reading the series as I had writing it. If you are interested in adding philanthropy to your financial plan, we have strategies to share with you. Feel free to email your Center planner with questions or contact@centerfinplan.com if you are new to The Center (we welcome you!).
Reminder: If you plan on donating this year, don't forget tax-advantaged opportunities extended to donors through the CARES Act:
In addition to the standard deduction, non-itemizers can take an above-the-line deduction for $300 of charitable contributions per person. Joint filers can deduct up to $600. Additionally, itemizers can now deduct donations up to 100% of their AGI.
Are you working on your year-end tax planning? Check this out! Have questions? Don't hesitate to reach out: contact@centerfinplan.com.
Make sure to check out part one of this blog series here, and part two of this blog series here!
Jaclyn Jackson, CAP® is a Portfolio Manager at Center for Financial Planning, Inc.® She manages client portfolios and performs investment research.
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