Accounting News

Wednesday, February 29, 2012
Choosing a Charity

There are hundreds of charities with noble missions. They can provide a great deal of help to people who desperately need it. However, not all non-profits are created equal. It can simply be that you don't support their mission. Or they can be poorly run and spend too much of their donations on overhead and marketing. A good accountant can help their clients choose charities that match their clients goals with well run organizations.

Here are some tips from Betsy Brill and Susan Winer of Strategic Philanthropy on how to choose better non-profits to support.

  • Check with the IRS that they are tax-exempt and in good standing. 
  • Review their financials. Make sure their expenses are reasonable based on their size and their work.But low overhead does not always mean effective use of the money. Make sure they are using it wisely to advance their goals.
  • Consider where they get their funding. Make sure they have a diverse source of revenue.
  • Investigate their investing policies. They should have confilict-of-interest policies in place.
  • Go and visit them. This might be a prudent step if it is a sizable donation.

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