The Charity Check. Evaluating New & Established Charities

5:32 PM, Sep 11, 2013   |    comments
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Greensboro, NC -- On this September 11th, it is a time to honor those who died, were hurt and served in the aftermath. It's also a time to celebrate the American spirit.

It is the American spirit of helping others and pulling together that schemers will prey on. David Dalrymple with the NW Chapter of the Better Business Bureau talked about how to evaluate an established and a new charity to make sure your money is going where you think it is going!

For established charities:

Give.org allows you to see if national charities meet the standards set by the Better Business Bureau's Wise Giving Alliance.

CharityWatch.org looks at the ratings of charities by the American Institute of Philanthropy.

GuildeStar.org & CharityNavigator.org also allow you to look at where the money goes.

To Check Out A New Charity:

State Government Registration

About 40 of the 50 states require charities to register with a state government agency (usually a division of the State Attorney General's office) before they solicit for charitable gifts. If the charity is not registered, that may be a significant red flag. In NC it is the Secretary of State.

Tax Deductibility

Not all organizations collecting funds are tax exempt as charities under section 501(c)(3) of the Internal Revenue Code. Donors can support these other entities but keep this in mind if they want to take a deduction for federal income tax purposes. In addition, contributions that are donor-restricted to help a specific individual/family are not deductible as charitable donations, even if the recipient organization is a charity.

How Will Donations Be Used?

Watch out for vague appeals that don't identify the intended use of funds. For example, how will the donations help victims' families? Also, unless told otherwise, donors will assume that funds collected quickly in the wake of a tragedy will be spent just as quickly. See if the appeal identifies when the collected funds will be used.

Financial Transparency

After funds are raised for a tragedy, it is even more important for organizations to provide an accounting of how funds were spent. Transparent organizations will post this information on their websites so that anyone can find out and not have to wait until the audited financial statements are available sometime in the future.

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