Finding the right charity

If you’re serious about giving, then you should be equally serious about which organizations you give to.

That means doing your homework, and getting to know how charities and non-profit organizations go about their business. Doing that lets you approach charity the same way you would other aspects of your finances: with a concerted effort to ensure you’re getting the most for your money.

Even if you already have an idea which charities you want to support, do some digging and ensure your gift goes to an organization worthy of your generosity. And, when you do, consider the following:

• Purpose – The organization’s publicly stated goals. The more focused and clearly articulated, the better. While clarity isn’t a guarantee of success, it can be a good indication of how committed the organization is to achieving its charitable goals.

Ask: Are the charity’s goals written in easy to understand language? How specific are they? Do they sound realistic? Or are they more pie-in-the-sky?

• Method – How the organization intends to achieve its charitable goals. The best organizations have a formal strategic plan for accomplishing their goals in a reasonable time frame.

Ask: Can the charity clearly articulate its strategic plan? What projects is the charity working on right now—and are those projects aligned with that strategic plan? Is the charity just doing the basics? Or are they innovative and exploring new ways to solve old problems?

• Leadership – Assess the organization’s management or board members. The more experience, the better.

Ask: Are the charity’s managers and leaders active in the cause? Do they seem passionate about what they’re doing? Do they have specific charity-related experience—or experience in some aspect of the broader cause the charity is involved in? Do they have business or leadership experience they can bring to bear on charitable projects?

• Financials – How well the charity manages and utilizes the donations it receives, and how successfully it attracts additional donations to fund new projects.

Ask: How does the organization manage its money? How does it attract donations? What portion of those donations is directed to actual programs, and what portion goes to operating expenses?

Answering these questions should help create a shortlist of charities that operate within the broader cause you’re looking to support.

If these questions meet resistance, that’s a red flag: you’ll want to contact the organization and arrange face-to-face meetings with board members, staff, or even those who have been helped by the charity before you donate.

The larger the gift, the more critical this due diligence becomes.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.