‘Tis the Season for Giving
And giving wisely is even more gratifying.
Americans are a generous bunch, especially during the holidays, filled with good cheer and gift giving. Generosity to nonprofits peaks during the holiday season, so there are a few things you may want to know before you make your giving decisions this year.
What’s the Level of Charitable Giving?
Let’s start with some statistics to get an idea of the level of generous giving in our area:
• $316 billion is donated annually across the U.S.
• $4.71 billion is donated by Pennsylvanians.
• $367 million is donated by residents of Chester County, which ranks in the top 3% of counties nationally.
• $2,544 is the average annual charitable giving for adults in Chester County. We should feel proud!
There are over one million charities registered in the U.S., with 800 registered in Chester County alone. Charities provide vital services in a wide variety of areas—arts, education, environment, health, religion, social services—all much needed to strengthen the fabric of our community.
What’s a Donor to Do?
How is a donor to choose from so many meaningful causes? Of course, online research is plentiful and a good starting point. Donors seeking free, unbiased data will find it at these charity watchdog websites among other sources:
• CharityNavigator.org rates the top 7,000 national charities.
• GuideStar.org has data on 1.6 million IRS-recognized nonprofits, including their IRS 990 tax forms (see below).
• Charities.PA.gov, for the PA Bureau of Charitable Organizations, lists over 11,000 charities and 450 professional fundraisers registered with the PA Bureau.
But you don’t even need internet access in Pennsylvania to do research. Just pick up your phone and talk to a real person at the Charity Bureau.
Every charity that raises funds in Pennsylvania is required by law to include the following statement on its fundraising materials: “A copy of our official registration and financial information may be obtained by calling the PA Dept. of State at 1-800-732-0999.”
So, try it. Call. When you phone, the Charity Bureau tells you if a charity is legally registered, if the charity is up-to-date on its filings, and what percentage of the charity’s funds are spent on program, fundraising and administration. All good, basic starting points.
More for a Donor to Consider
A bit more research will help you feel more confident with your giving choices.
• Financial Health. A charity’s IRS 990 tax form (available online or directly from the charity for free) sheds light on a charity’s priorities. The most efficient charities generally spend 75% or more of their budget on their programs and services, and less than 25% on fundraising and administrative fees. Healthy charities grow their revenue at the rate of inflation (or more), continually invest in their programs, and have some money saved for rainy days and economic downturns.
• Accountability & Transparency. Charities that follow good governance and management practices are most likely to have positive program outcomes, arrived at ethically and responsibly. A charity’s IRS 990 tax form states if the charity has board governance structures and policies that comply with basic best practices, if it has conflict of interest policies in place, if it uses objective benchmarking processes to determine CEO compensation, if it has whistle-blower policies, and so forth. It’s all public information, filed annually on the charity’s tax form.
• Attend Events & Volunteer. Donors who are committed to advancing real change often talk with charities to learn about goals, challenges and accomplishments. Volunteer to see what really goes on, and get involved as a partner in the charity’s initiatives to bring about change.
• Passion & Excitement. Ultimately, your giving is most satisfying when you take the time to identify what fires your passions. Give to causes that excite you and are filled with people you trust and feel good about.
Pay attention to your instincts, and give because it makes you feel good! ♦
Karen Simmons is President & CEO of Chester County Community Foundation, which connects people who care with causes that matter, so their legacy makes a difference. The Community Foundation helps donors discern which charities meet their criteria for giving generously and wisely. 610-696-8211; ChesCoCF.org.