While the Federal Trade Commission has recently issued several warnings against fraudulent charity scams, charitable giving will likely see its yearly high in donating and volunteering in December.
December 2013 accounted for 17.5% of the year’s total donations, according to BlackBaud’s Charitable Giving Report. BlackBaud is a technology firm that produces software and market research for non-profit organizations.
“There are dishonest people in government, in business and in non-profits,” said Pat Libby, director of the University of San Diego’s Non-Profit Institute. “And I would say that, by-and-large, if someone is interested in making a gift to a charity, the best thing that they can do is go to the organization’s website. There are simple things that people can look for. For instance, do they have an independent board of directors? Do they talk about their programs? Does it look like they’re transparent with their practices?”
Many smaller organizations however do not have the time or the resources to actively maintain a website.
Other independent sites like the Better Business Bureau’s website and CharityNavigator.org can offer ratings and information on charitable organizations.
“You want to look for organizations that not only have 501(c)3 status, but that have a track record and are established and have demonstrated that they are able to deliver programs or services over a long period of time,” said Libby.
Organizations with 501(c)3 tax status are legally committed as a charitable organization and are prohibited from distributing profits to any kind of shareholders.
However there are organizations that pay salaries to executives and employees, some of which reach into six figures among larger organizations.
“It’s a very delicate balance where non-profits are committed to their programs and they invest and they place a lot of their time and their energies and their money because that’s their mission and that’s where the love in their heart is,” said Patty Chavez with South Bay Community Services. “But somebody needs to run these programs. And there also needs to be a sustainable piece to that. In order to do that you need to pay your staff to be able to bring food and work with families. It’s how you run a business.”
Organizations with nothing to hide will be willing to have frank conversations about their finances and practices and donors should feel encouraged to have that conversation, said Chavez.
Other documentation such as income tax information for executive directors and other charitable staff is made public through the IRS for organizations that pay more than $100,000 for yearly salaries.
Many of the organizations that pay salaries this high are likely to be large scale operations such as Doctors Without Borders and The Red Cross that do international relief.
These organizations need to be able to hire the top talent and to do that, they need to offer top salaries, said Libby.
“People want non-profits to be run efficiently, professionally, compassionately and transparently, as they should,” said Libby. “But at the same time some people have the idea that people shouldn’t be paid who have the skill and ability to do that work. Think about it this way, do we really think that the director of a museum shouldn’t be paid, or the director of a daycare center that’s a non-profit shouldn’t be paid?”
While all-volunteer organizations do exist, it is unreasonable to expect volunteers to be able do everything that society expects charities to do, she added.
