How Do You Know if a Non-profit is Good?November 21, 2022
In today’s world, you probably see thousands of advertisements and receive countless weekly emails on ways to give back to your community. But how do you know if a non-profit is good? While it is great to have a handful of options to choose from when donating to a non-profit, it can also feel overwhelming to know whether or not a non-profit is reputable.
According to FTC Consumer Sentinel Network Statistics, there were over 4,600 reports of charitable solicitation fraud in 2020. Therefore, you want to research and be confident that you’re donating to a trusting and authentic non-profit organization. In this article, we will share 8 characteristics of a reputable non-profit.
8 Characteristics of a Reputable Non-profit
- Reputable charities have Employer Identification Numbers. EINs are also known as Tax-ID numbers. While having an EIN doesn’t always mean an organization is tax-exempt or that your donation is tax deductible, it does mean that the non-profit is on the IRS’s radar. Therefore, if anything ever goes wrong with a donation, there is a way to contact the non-profit because they must submit contact information to qualify for an EIN.
- Reputable charities must register every year with the IRS and state governments. If a charity or non-profit is unwilling to provide additional information about its activities, it should be a warning sign to you. Without IRS registration, it’s also unlikely that your donation to the charity will be tax-exempt. Thankfully, the IRS has a search tool that allows you to look and see if a charity has a registered EIN. You can also usually find these on their websites.
- Reputable charities should have many ways to donate. A charity that only accepts cash, gift cards, or wire transfer is a red flag. Reputable charities should offer payment via credit card and check as well. This way, you can track where your money has been sent and have protection against sending it to an unreliable source. The FBI encourages us to pay attention to this, especially in natural disasters; it’s common for an online source to pose as a charity accepting money for relief when it is a scam.
- Reputable charities should provide tax receipts for donations. If you are to donate to a charity, you should be given a receipt for your donation that you can include when filing your taxes that year. If you do not get a receipt, look into how the charity uses your contribution in the first place. If you receive a receipt for your donation, ensure it has detailed information about the charity and the gift. The tax receipt should also say how much your donation was for so you can include that information in your tax deductions. If a charity does not provide a receipt for you, this should be a telling sign that you may not want to donate to this specific charity.
- Reputable charities will be transparent about donation uses. It should not be hard to understand what a charity will use your donation for; if they aren’t clear on their website about how they use donations, make a note of it. The FTC recommends using Charity Navigator, BBB Wise Giving Alliance, CharityWatch, or GuideStar to learn how much of your donation a charity uses for a particular cause and how much is going to expenses and overhead.
- Reputable charities will politely ask for donations. It’s normal for charities to be eager to get assistance from you, but they shouldn’t be overly pushy about you donating as quickly as possible. If a charity seems to rush to get your donation, you have reason to pause and do further research. You should also feel educated about the charity – what they do, how they do it, and who benefits. Make sure this feels clear to you before giving your donation.
- Reputable charities will likely have testimonials. While this isn’t the only criterion for telling how legitimate a charity is, it is a good sign when charities have testimonials from others who have donated or those who have benefited because of the charity’s work. For example, Vehicles for Change shares videos from real people who have benefited from the charity’s work. In addition, you can easily see the large impact we’ve made by visiting our homepage and seeing that we’ve given away over 7,500 cars to low-income families, thus improving over 25,000 lives.
- Reputable charities look legitimate. Lastly, use your common sense. How does this charity’s website look? Do they have any social media platforms? Are they educating you on the work they do or keeping it vague? Take the time to see if the charity of your choice looks like the real deal or a scam. There will almost always be signs that you’ll find rather quickly.
Vehicles for Change is proud to be the nation’s most extensive affordable car program. Not only do we sell cars at great rates, but we also help low-income families gain access to better employment opportunities, fresh food, recreational activities, and education. In addition, we hire formerly incarcerated adults and train them to be certified mechanics; this way, they get a second chance at their lives. Whether you’re interested in learning more about a car donation or simply looking to make a tangible monetary donation, click here to learn more about us and our life-changing work.