This is a prime time for charitable organizations to get recognized and raise money. For some nonprofits, the last three months of the year fund the entire organization, says Lindsay Nichols, a spokeswoman for GuideStar.org, a Williamsburg, Va.-based source of national nonprofit information.
But many charities are still struggling. Giving has declined by 10 percent since 2005, after adjusting for inflation, according to a report by the National Center for Charitable Statistics. Although donations increased slightly from 2010 to 2011, there is a lot of ground to make up.
Nichols gives five steps to consider before choosing a charity.
1. Clarify your values. There are more than 2 million nonprofit organizations nationwide, Nichols says.
“Take a few minutes and really think about what you want to support,” she says. A nonprofit’s mission statement should be clear, and it should speak to you.
If you cannot find a mission statement on the organization’s website or at nonprofit information website like GuideStar.org – that is a clear red flag.
2. Verify legitimacy. In 2006, nonprofits became legally bound to file an IRS Form 990 for three consecutive years to maintain their tax-exempt status.
3. Do a little research. After finding a clear mission statement, look for information on programs that detail how the mission statement is achieved.
“The programs GuideStar.org should tell you how that one acre of land is going to be saved,” Nichols says.
It is also a good sign when nonprofits present specific, measurable goals and concrete criteria for describing successes. The annual report, which often can be found on the organization’s website, and any stakeholder reviews will give you a good idea of how the nonprofit works and how successful it is.
4. Trust your instincts. If you ever feel pressured to give, that is a red flag. “It’s really a problem if you have said ‘no’ and the nonprofit keeps asking,” Nichols says. “The bottom line is, if you’re still having doubts about the organization, don’t give.”
5. Holiday programs. Some retailers have announced their holiday charitable programs for the year. Toys R Us, for example, will donate $200 in toys to Toys for Tots for every person who pays off a layaway account for someone in their community.