Nonprofit Donors Should Consider These Eight Factors!
Giving Tuesday is just around the corner. Mailboxes are filling up with appeals from worthy organizations seeking your donations prior to year-end. Some decisions will be easy. The most effective appeals will relay stories of their recipients, how they’ll make a difference with your contribution and what to expect as an outcome. But what about the others? What are the key indicators to consider when directing your money or time to a nonprofit organization?
After years of involvement and consulting, I know that emotion can be a major part of our nonprofit contribution decision making, but the most logical choices come from reviewing these eight key factors before writing a check or becoming a volunteer. I’d suggest you consider it your new “donation checklist” for Giving Tuesday!
MISSION – Every organization should have a mobilizing mission that provides direction for the organization and serves as a “guiding star” for members of the board and the organization’s staff and leadership. Check it out, is it clear and concise? Does it motivate you further and give you an idea as to the type of work to expect from the organization? Are you comfortable with your resources being used in that manner?
VISION – An inspiring vision speaks to the future and where the organization sees itself when its mission is accomplished. Is there clarity around the vision and is it well known? Your dollars or efforts will allow that vision to become reality. Are you proud to be enabling the vision?
BOARD – Boards come in all sizes but the most effective and engaged boards are generally smaller (perhaps 9 to 15 members). Are you familiar with those on the board? Are they advocates for their organization’s cause? Is there a sense that they provide strategic direction for the organization? Have you ever been asked by a board member to support the cause?
PLANNING – It’s more important than ever for organizations to operate from a set of plans, overarching is a strategic plan. Are you willing to give money to groups that “fly by the seat of their pants?” Probably not. A reputable organization will have a well-defined (and publicly available) strategic plan. Reviewing it will provide a donor with a good sense of organizational priorities.
OUTCOMES – The outcomes you’d like to see from your gift should match with proven outcomes of the organization. Start by identifying your values, goals, and related giving. What are the issues that matter most to you? What are the outcomes you want to see? How do you want to make a difference in the world? Does it match with what the organization is accomplishing?
RESEARCH – It’s becoming more commonplace (not to mention it’s a wise idea) to do more research before selecting an organization to benefit from your support. Sure, the appeal may be an attractive one and they pulled the right heartstrings, but are they effective, efficient, and impactful? Check out resources like Candid (formerly Guidestar and The Foundation Center) and Charity Navigator for guidance on how they are doing. Do you have a donor advised fund? Then you may be able to check for information from your provider’s knowledge base.
TAXES – Will you itemize your deductions when filing taxes? Then consider what tax benefits may exist for your type of gift. Giving appreciated assets may eliminate the need to pay capital gains tax on the amount of the asset given, plus you could get a deduction for the gift amount. Over 70 ½? Consider transferring from your IRA tax free. Over 73? Then you may be able to make a Qualified Charitable Contribution (QCD) from your IRA and avoid the taxation on your RMD (Required Minimum Distribution.) Consult your tax advisor for guidance.
FOLLOW YOUR GIFT – Follow up and learn. If you want to develop an understanding of the organization, don’t just give and forget. Stay in touch, see how they use your donation. Ask for feedback and reports on their progress and challenges. Learn from their successes and failures and adjust your giving accordingly. Transparency and accountability are key to a long, beneficial relationship.
Sharing your time or dollars with a nonprofit organization requires your own process of due diligence. Donors not only have a right but a responsibility to ensure their contributions are being used in the manner they were “sold.” Review your motivation and intent, find your match in the thousands of organizations that exist today, and support the good work on Giving Tuesday or before year-end. You’ll feel better afterward.
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