Each month many of us give money, time or other donations to charitable causes without ever second-guessing their intentions or bothering to investigate a charity. How many times have you tossed in money in to the holiday cash collection buckets outside a store? During the holidays, do you drop off toys to big collection boxes to be shipped off the waiting hands of kids? Have you ever read their financial information, board of director bios or even their mission statement? If you are like most people, the answer is ‘no.’
Sometime ago I became involved in a training organization in an effort to get out of the house more often, socialize and learn something new. I joined by paying a membership fee and became a student in a ten-week training program. At our first organizational meeting, we paid a small sum to purchase some required training equipment. This was not a huge amount of money, under $100. There we learned that our organization is a nonprofit. As a community based nonprofit, part the organization’s mission is to donate to other nonprofits in the area. We are asked to nominate a charity to be the recipient of our monetary donations. Cool, right? Except that I signed for classes not fundraising duty.
At our first class, we are told an upcoming event for the organization needs sponsors and the personal goal for each of our class’ 21 students should be to secure a $250 sponsor. The trainers announced the name of our class charity. The training nonprofit will be donating to this other nonprofit. How much will the second charity receive? Questions about this training organization’s overhead expenses come to mind.
At our second session, the teachers announce a fundraiser at a local restaurant. We are to donate a bottle of wine to add to a large gift basket that will be raffled off at the event. In addition, tickets are on sale, for those that wish to attend. The event will be open to all classes this organization teaches. My ticket gets me into crowded and fun event
The next week after the fundraiser, we are asked to give another $20 for additional classes. I wonder why there is a charge for the classes since the instructors are volunteers and the facilities are paid for. Time to dig up the financials on this organization!
During the next class, the teachers announce an end-of-the year party. It will feature open bar and “free” food. Tickets are $25. Hmmm! Okay, officially red alert and time to take some time to check out this charity’s financials, including IRS 990 filings, mission statement and expenses ratios. Before I even get to do that, 48 hours later, another donation request comes in from them via email for an online cash donation!
I head over to the Charity Navigator website to check them out. If you have not used their service, Charity Navigator is a convenient way to see a nonprofit’s financial history, board members and mission statement. The charity has no record filed. Next, I go to the IRS website to look up their record to see if they are filed under a DBA or variation. No luck, no IRS record. Last, I check out the online corporation record of the state they operate in and find that they are in incorporated with their state.
I head to their website to look for the correct spelling of their name and whatever else I can find out about this organization. I do see the announcement that they are officially a 501(c)(3). According to their own website post announcement, they became a 501(c)(3) only two weeks ago.
I have faith that this group is indeed a nonprofit recognized by the IRS. My gut feeling tells me they are legit but just need to learn to tone down all the donation requests. Considering how long it takes the simplest of nonprofit structures to get paperwork through the IRS, it is no surprise that the IRS website is not up to date either.
Nonprofits are good at heart. This one should have stated up front, that they are more than a training organization but also have a fundraising arm. In addition, hitting up the same contributors week after week is never a good idea as it leads to disengaged donors. Hopefully, over time, this organization will improve its leadership.