By JOHN F. WASIK of New York Times
DONATING to charities this time of year used to be relatively efficient and painless. After watching the Macy’s Thanksgiving Day Parade, you plunked some money into a Salvation Army bucket, wrote some checks, contributed some household items and were done.
Yet with charities increasingly involved in awareness campaigns, complex networks of cause marketing and often exorbitant overhead, donating to the most effective charity has never been more challenging.
If you are a discriminating giver, you will need a set of guidelines that can tell you if your donation will mostly be spent on a charity’s mission and not peripheral activities. These days you have to use your head far more than your heart to see that your charitable dollars are well spent on causes you care about.
There are services and strategies that you can use to make an informed decision. Most of them can help you determine if your dollars will reach the charity’s “mission” — and whether a nonprofit organization is effective in what it is striving to do.
Charities are already witnessing greater selectivity among donors, probably driven by the pinch of a sluggish economy. According to The Chronicle of Philanthropy, a trade newspaper for the nonprofit sector, donations to the top 400 fund-raising charities are slowing this year after gaining 4 percent in 2012. Last year, the top nonprofits took in about $81 billion.
Although such things are hard to measure, it is possible that donors have become more sophisticated in their giving as useful information on charities has become more detailed. Yet it is easy to get distracted by ubiquitous causes that blanket every corner of society. Herewith, a guide to navigating the thicket.
The Major Services
One of the first stops in searching for charities is GuideStar, which contains records from 1.8 million nonprofits registered with the Internal Revenue Service.
The free component of the GuideStar website provides access to each organization’s Form 990, the basic I.R.S. filing document for nonprofits. That is useful on the front end if you want basic information on a charity’s income, spending, mission and executive salaries.
As with the other services, you can also pay for “premium” services from GuideStar that provide more financial analysis and access to a nonprofit’s contractors. This would help if you wanted to perform detailed comparisons of charities or to explore their financial ratios or executive compensation in greater depth.
What GuideStar does not do is give a qualified rating of a charity. It tries to remain neutral and “is not a charity evaluator,” says Lindsay J. K. Nichols, a spokeswoman. For more intensive evaluations, you need to go to the BBB Wise Giving Alliance or Charity Navigator.