Charity in the modern age: How do I give without getting got?


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Do you do any yearly charitable gift-giving? If so, how much?

As 2010 winds to a close, many of you are celebrating, spending time with loved ones, perhaps considering your good fortune (and desiring to share it with those who've had less luck). Others are eyeing the start of fiscal year 2011 and preparing to balance the books--and do their good deeds for the taxman. Whatever your motivation, your intent is for your money to get to a place it’s needed.

But how do you make sure? It’s pretty obvious that the guy sending you spam email, asking for your bank account information and promising you millions in profit for your assistance, is a scammer. But sometimes it’s not so simple--they have a great website, the glossy brochure looks official, and the stories seem touching. You just want to help.

If you’re in the US, and the charity is US-based or has an American arm, it’s pretty simple. Most non-profits file a Form 990 with the IRS. On this tax form, you can check out how much of the money the organization takes in goes back out--and where it goes when it leaves. If you see a great portion of the yearly intake going to fundraising or paying large executive salaries (for many these are itemized in the tax statement), you might stop and look around. Find an organization that does more, and spends less.

You can ask the organization for Form 990--or for their annual report, if they have one. Any organization that refuses to give you this information might be a bit fishy. You can also request the information from the IRS. Online they provide a basic search you can use to see if the organization is exempt and how much of your contribution to that organization is tax deductible. If you’re suspicious of a charity’s status? You can always check the IRS’s list of organizations whose tax-exempt status (501(c)) has been recently revoked.

But if you want more detail than that, the web--and our infinite interest in collecting transparent, publicly available data--provides it, quickly and easily. You can use the Foundation Center’s 990s Finder or any number of free or paid services to look up these public records. I used the Economic Research Institute to look up information on a charity I’ve supported in the past, Doctors without Borders. The ERI gave me a summary, with a clean graph showing revenue, assets, and contributions, and a listing of important data, like how the organization is classified, what area of work it does, and how it is organized. They also provide the link directly to Form 990, at no cost. (The paid portion of the search seems intended for legal or charitable professionals who want great detail or aggregate information about more detailed topics like compensation and practices.)

If the organization you’re contemplating donating to is based outside the United States, it might be a bit harder to dig up information--but it’s out there.  The Grants Information Collection at the University of Wisconsin at Madison has a nice list of other websites that provide the same sort of information as the Foundation Center, for other countries. For example, you can look up charity organizations in the UK from a site like CharitiesDirect. Though most require a subscription or login for detailed information, the same basic info that you’d find in a US Form 990 is usually available with little hassle.

But there’s one way you’re always certain your donation--of money, of things, or simply of time and effort--hits just the right spot. It’s the same way that people make software better, or make the world around them better. They get involved locally, visibly. Find a local project--or a specific niche interest--and offer your assistance. You’ll get to see your effort have direct effect. It might not generate a deduction for the tax man, but the sense of satisfaction might be even better.

We’re curious--do your open source ways extend to your wallet? Do you feel that charitable giving is part of the open source way? Or unrelated? Discuss.

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3 Comments

Karen E. Lund's picture

Two other good sources for information are Charity Navigator (www.CharityNavigator.org) and Guide Star (www.GuideStar.org). Both are free, but you can access a bit more information if you register.

In addition, I always refer to a non-profit's own website for information and, usually, an annual report. Fiscal efficiency is important, but I also want to know what an organization is doing with their resources (money and others) and what their recent successes have been.

bascha's picture
Open Source Evangelist

Oh yes, Karen, great point--there are lots and lots of other sites that provide this information. One of the positives (at least I think so) of the open source way is that data that is open and available can be used by lots of people to provide lots of different services, and can be added to or collected/parsed in different ways. The downside? You have to work a bit harder to verify every permutation.

In that sense, you should always check your data--make sure the info from one source matches another, and also check with the non-profit themselves--any non-profit not willing to answer your questions or that seems to find your concerns offensive, is probably defensive for a reason!

ed whymandesign.com's picture

love your work. Would it be possible to work with you to make a re skinned
version of existing software so we can help the public to solve
other social issues (Ideally using the http://www.TRAIDmark.org business
structure)? Maybe working with someone like
http://www.ONEworldHEALTH.org or http://www.earth.org which
is closing so maybe this is something I could help you take on so
everyone can share local knowledge? Also can http://www.WEBiversity.org
share video's and create http://www.TRUSTlibrary.org with your
team? http://www.WhymanDesign.com