Charity Worthiness
This is a good news/bad news essay, dear readers: I want to highlight some things we all need to be aware of when we are making decisions about donating money. Whether to give money away is not my subject here: I am going to assume that we do all want to support our churches, our local food pantryAMEN, and our other local non-profits that do such important work here to improve life for all who live here. My topic is really the decisions we make to support non-local organizations, ones for whom we mostly have no personal contact or knowledge, other than perhaps a local volunteer or a friend or acquaintance who tells us about them or unless we have read or heard an ad or public service announcement about them, or received a solicitation phone call for them.
What qualifies me to write about something like this? Well, I have worked with (founded or served on boards of directors of) nonprofit organizations for over 40 years. I served as founding president of the Guadalupe Valley Habitat for Humanity chapter in 1986; I helped to start Fayette Community Foundation in 2001; I served on the board and as Audit Committee Chair for the Seguin Public Library Foundation; I chaired the board of a national church publishing house (incorporated as a non-profit). I now serve on the board of the SanAntonio-based Minnie Stevens Piper Foundation, a family foundation supporting higher education in Texas that began in 1950.And I did all this while teaching economics and finance at a private churchrelated university, Texas Lutheran University in Seguin, until I retired in 2020. One of my fields of study while there was the effectiveness of boards of directors of non-profit organizations.
What I learned in serving such a diverse body of organizations and studying others is that there is a vast array of effectiveness of boards of directors and of the organizations they direct. Some boards are highly focused, self-critical, determined to do their best for the community the organization is supposed to serve. Other boards can be more self-serving: by that I mean that board members may use their board positions to gain influence in their community, to grow their own businesses, or to promote their own reputations nationally. Non-profits are not all created equal: some are more bent on service, while others are more determined to promote themselves, their top executives, and directors.
How are we as donors supposed to know which ones are which? Happily, the laws in this country require non-profits to register with the IRS, in order to achieve 501(c)3 public charity status, and all public charities that have income/contributions above a certain threshold must file annual reports with the IRS that are made public. These reports show how much the organizations spend on salaries, on fund-raising activities, on travel and other benefits for their executives, and on their community service.
Would it surprise you to know that one of the most prominent national charitable organizations, one active in Fayette County and supposedly helping society, is actually spending only 21 cents of every dollar raised on that founding purpose, while the other 79 cents goes to salaries, fund-raising, travel, legal, office, and other expenses? [Information found in organization’s 2021 IRS Form 990] Where can you identify organizations worthy of your support quickly, without looking up the IRS reports and calculating these percentages spent on various categories after pouring over 40-pagelong financial filings? One of the best ratings sites I have found is Charity Navigator, a free website where you can find ratings for most of the large non-profits in the United States.
At charitynavigator.org you can enter the name of a prominent foundation or non-profit and receive information about its effectiveness in achieving its reported mission. I urge you to seek out the ones with 90% ratings before you make major gifts (or any gift at all) to an organization you do not have a close relationship with, no matter how well-known it may be. You probably won’t find ratings on local non-profits that are meaningful, because many of them don’t complete the data forms at that website, but local non-profits are ones for whom you can call up present or former board members and get inside information yourself. It’s the larger ones that solicit through the mail or with radio ads, on-line ads, or phone calls that require our diligence in researching their worthiness.
Thank you for your generosity, dear readers. I am always amazed at how much people in our community support one another financially, through one disaster after another. . . whether hurricanes, fires, illnesses, accidents, and other calamities. Please keep it up, for our well-being individually is tied entirely to our well-being as a community, people who share this space that is Fayette County, Central Texas. Just beware of solicitations that will take dollars away from your local community: use the tools available to help you assure the recipient’s worthiness, so your dollars will truly do good.