013 – Doing Good Matters – Six Eye-Opening Questions to Ask any Charity

Six Eye-Opening Questions to Ask any Charity

Welcome back. This is the podcast that helps you and other donors and volunteers do good even better — regardless of which charities or causes you support. 

This is Ed Long. Each week on this podcast I talk about charities and provide actionable tips to help donors and volunteers to take their philanthropy to the next level and do good even better.

Give smart from your heart, because doing good matters.

We’re building a community of caring people who want to make the world better. And are willing to spend time and energy to make it happen. And to find and support strong charities doing solid work. You can Join the Community now.

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Main topic

  • Six Eye-Opening Questions to Ask any Charity
    • We’re talking again today about the smart part of Give Smart from Your Heart.
    • In Episode 11, we talked about focusing your giving on charities that focus on what you care about, where your heart and passion are.
    • If you found a charity you are interested in, it’s time to learn more about what the charity does — what its programs are — how it spends the money entrusted to it.
    • Getting the answers to these six questions will tell you much more about what a charity actually does than its name and mission statement. You might be surprised.Ask Questions
      1. What is your most important program/effort?
        • Form 990 and Form 990-EZ show a charity’s biggest programs.
        • Under Program Service Accomplishments on page 2 the charity should describe its largest programs, including how much it spent on each program.
        • See page 1 for total expenses on programs and everything else.
      2. How much of your total spending goes to the most important program/effort?
        • Eye-opening example: I always thought of American Red Cross as disaster relief and emergency response group, and its mission statement is focused on emergencies. It’s largest program, however, involves blood and blood products, where it sends 67% of spending.
        • Eye-opening example: What would you guess the #1 program of Food for the Poor would focus on? Food? Wrong. It applied 58.8% of spending on healthcare and distribution of medicines and medical supplies. Food shows up only as part its second largest program.
      3. What is the number one problem you (charity) are trying to solve?
        • Here’s where you start to get beyond the numbers.
      4. How will things be different when the problem has been solved?
      5. What programs/efforts are you using to solve the problem?
      6. How do you measure the results of your programs/efforts?
    • Bonus questions: If you’re having a productive conversation, start a discussion of how the charity fits in with other organizations working on the issue. Ask additional questions like these:
      • Which other organizations also working to solve the problem?
      • How does your work fit with and differ from those organizations?
    • In the end, if the charity is open to the discussion, you’ll know a lot more about whether it’s a fit for you.
      • And, if the charity is not open to the discussion, you’ll know it’s time to focus on other charities doing work you care about.
    • Your smart and easy assignment for today:
      • Select a charity to focus on. Maybe an existing favorite, or one you’re just interested in knowing more about.
      • If a charity receives $50,000 or more in a year, it should file an annual Form 990 or 990-EZ. Find its latest return.
      • Find the charity’s number one program, copy or write down the description and how much it spent on the program, and then divide that amount by the total amount it spent during the year.
        • For most charities, all that information is on pages 1 and 2 of the return.
        • If you have trouble, email me at ed[@]seriousgivers.org and I’ll help you out.
    • A big part of giving smart from your heart is making sure the charities you support are focused on what you care about. Getting the answers to these eye-opening questions will tell you whether the charity’s focus matches yours.
  • Had experiences? Have feedback? Share your thoughts  in the Reply / Comment section at the bottom of the page. Or email me at ed[@]seriousgivers.org

Episode sponsor

  • Today’s sponsor is the number 542,369. 
    • In the past I’ve told you that there are more than 1.4 million plus nonprofits currently registered with the IRS.
    • Each of them is exempt from paying Federal income taxes on its mission-related income.
    • Did you know that organizations can lose their nonprofit and tax-exempt status?
    • The Internal Revenue Code revokes the tax-exempt status of any organization that fails to file annual information returns on one of the 990 forms (those are 990, 990-EZ, 990-PF and 990-N).
      • The revoking happens if the organization fails to file for three consecutive years.
    • The number 542,369 is the number of nonprofits who’ve lost their status for failure to file.
    • Quick link: You can find information on every nonprofit registered with the IRS at CharityCheck101.org. All the IRS data, without the kerfuffle.

Charity Baloney

  • Where I do my best to slice up myths related to charities.
    • If you’d like to suggest a belief about charities that you think might qualify as charity baloney, email me at ed[at] SeriousGivers.org or send me a voicemail.
    • Today’s Charity Baloney is the belief that I can deduct the value of my services when I volunteer for a charity.
    • The truth is you cannot deduct the value of your time or services donated to a charity.
      • Volunteers are often surprised about this.
      • Of course, since the volunteer wasn’t paid for the services, they didn’t receive taxable income. No taxable income, no tax deduction – a simple, clean result.
      • By the way, if you run a business and give services to a charity as part of your community outreach efforts, you may well be able to deduct your costs of giving those services as a business expense.
    • See our Volunteers and Taxes page for FAQs and a very active discussion.

Share your questions and feedback

I’d love to hear from you. I read every comment and email.

  • Send a voicemail using the black tab on the right side of any page.
  • Use the reply / comment box below.
  • Send me an email at ed[@]seriousgivers.org.

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About Ed Long, the podcaster

Podcaster Ed Long has been preparing more than 40 years to do this podcast. He knows charities and the rules that apply to them. He’s analyzed charity finances and operations.  He’s founded and run charities, and volunteered for them. He’s helped the public and law enforcement fight fake charities, and has served as a philanthropy educator and coach. Before all that he worked as a partner with a major Wall Street law firm. Ed is the founder and CEO of SeriousGivers, which itself is a charity. Ed knows the great work that strong charities can do with the resources entrusted to them, and is passionate about helping others find and support strong charities.