Ensuring Your Support Goes Where You Intend

With the COVID-19 pandemic came an outpouring of philanthropic giving. It was possibly one of the few silver linings to occur during a very difficult time.  Similarly, following the murder of George Floyd, there was another significant wave of giving. Americans are reaching deep into their pockets to support nonprofits of all sizes fighting for equality.

In 2020, a news outlet released a report sharing that many corporations and individuals contributed to a 501(c)(3) nonprofit organization with a name that aligns with the Black Lives Matter movement without being formally associated with #BlackLivesMatter Global Network. This made many donors question how this happened and what can be done to ensure their money goes where they intend.

Charity Navigator currently has profiles for seven 501(c)(3) organizations with the keywords 'Black Lives Matter' in their names — these are pulled from the IRS’s Business Master File. With more than 1.6 million registered nonprofits in the U.S., it’s not uncommon for multiple organizations to have similar names or, in some cases, share the same name.  If a donor finds an organization in the I.R.S. Tax Exempt Organization database, their research should not end there.

So, what can donors do to ensure their support is directed to the intended organization? Here are six ways to help protect yourself:

Ensure the organization is a registered 501(c)(3) nonprofit

These are the only organizations where donations are tax-deductible.  Ask the nonprofit for its Employer Identification Number (EIN) — all nonprofits have this unique nine-digit number assigned by the Internal Revenue Service. The EIN can be used to identify the organization and to conduct research, including reviewing information on Charity Navigator.

Verify Form 990 is being submitted by the organization

There are several versions of Form 990 - this is determined based on the type of nonprofit and the annual revenue.  If the nonprofit cannot provide recent copies of its 990, for example, or if the organization was recently formed and you as a donor are having difficulty finding information on it, you may want to err on the side of caution.  Review these tips to avoid charity scams.

Look for important trust indicators

Charity Navigator’s star ratings have long been considered the premier trust indicator of the nonprofit sector. Our easy-to-understand, zero-to-four-star scale provides an assessment of an organization’s overall effectiveness. Additionally, there are other places to secure information, such as BBB Wise Giving Alliance, Candid, and GreatNonprofits.

Check for financial documents

At times these are rendered in an easy-to-read pie chart so that donors can see what portion of their donation goes toward programs. Both the financial statements and, for rated organizations, the pie charts can be found on Charity Navigator. The nonprofits should also provide visibility into how the nonprofit operates: Are they an advocacy organization? Do they provide direct services? Do donations fund research? Tax-exempt organizations should make the answer to these questions very clear.

Be wary of supporting personal fundraisers

As personal fundraisers (individuals raising money for themselves or others) are not coordinated with nonprofit organizations, there’s limited accountability into where the money goes. Additionally, donations are not tax-deductible. Charity Navigator encourages donors to support well-established nonprofits that come with the comfort of knowing support received is reported to the I.R.S. 

Use social media to your advantage 

Beyond search engines, news travels quickly on social media. And although there should be caution in using social media as a definitive and sole record of fact, together with supporting research from websites mentioned above, it may be a helpful source of information.

The team at Charity Navigator stands resolute behind our mission of making impactful giving easier for all and encourage donors of all sizes to balance their eagerness to give with vigilance to ensure their donations are going to the organizations to which they originally intended.