Tips for Practical Giving
(Page 3 of 3)
March-April 2009
by Staff, Utne Reader
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What to Ask
Find out how the organization plans to deal with the economic crisis. The January issue of Kiplinger’s Personal Finance recommends checking out a nonprofit’s working capital ratio to see if it has enough of a cushion to weather a tough year: “A charity can better withstand hard times if it has six months’ to a year’s worth of working capital.”
Are they in the red? Get hold of an organization’s Form 990, available on its website or at GuideStar (www.guidestar.org), suggests Kiplinger’s, and “look for the line that indicates whether the charity has positive or negative assets.” If it’s in the red, your donation may go toward paying off debt rather than delivering services; call the organization to ask if that’s the case.
What are the organization’s goals? In addition to having a clear mission statement, an organization should be able to explain its short- and long-term goals to you. “Good organizations relish this opportunity,” notes Charity Navigator. “They know what they are working toward today and tomorrow,” and they have systems in place to quantify their success—or shortcomings.
Online Resources
Charity Navigator analyzes the financial health and efficiency of more than 5,300 U.S. charities; it breaks down each organization’s expenses, executive compensation, revenue, and so forth. The site also hosts giving-related resources, with tips, articles, a blog, and a wealth of top-10 lists (“10 charities drowning in administrative costs,” “10 of the best charities everyone’s heard of”). The Charities Review Council (www.smartgivers.org) and the American Institute of Philanthropy (www.charitywatch.org) also offer giving tips and analysis. Razoo (www.razoo.com) hosts similar information with a social-networking twist. GuideStar (www.guidestar.org) houses reports and tax forms for 1.7 million nonprofits—it’s a vital destination for anyone who’s serious about the financial side of nonprofit research. The annual Slate 60 (www.slate.com) assesses each year in philanthropy by listing the biggest donations and philanthropists and churning out a bevy of news and reports on charitable giving.
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