Working hard for your money and building a secure future are important priorities. That’s why savvy donors do a little research to ensure their charitable dollars are well spent. They will take the time to understand a nonprofit’s mission, impact, and overall financial health.
Here’s a list of five best practices of savvy donors:
1. Be proactive in your giving
Wise givers seldom make impulsive contributions. Nor do they respond to the first organization that appeals for help. They identify which causes are most important to them and are specific about the change they want to affect. For example, rather than supporting generic cancer charities, they may opt for targeted outcome goals such as providing mammograms to at-risk women in their community. Smart donors give with intention.
2. Eliminate the middleman
For-profit fundraisers, those primarily used in charitable telemarketing campaigns, can keep a percentage of every dollar collected. If a potential donor likes what they hear they can hang up on the middleman, investigate the charity online, and send their contribution directly to the charity. This can help ensure 100% of their donation reaches the charity.
3. Check the charity’s commitment to donors’ rights
Donor rights should be respected. One litmus test is to see if the charity has a donor privacy policy that promises to never sell or trade the donor’s contact information. This may not be an option. In many cases the onus is on the donor to “opt-out” of having their personal information shared with other entities.
4. Obtain copies of its financial records
The financial health of a charity is a strong indicator of its programmatic performance. A charity’s ability to sustain its programs over time is just as important as its day-to-day spending practices. Savvy donors will seek out charities that can grow their revenue at least at the rate of inflation, continue to invest in their programs, and have money saved for a rainy day. Ask the charity for copies of its three most recent Forms 990. The donor can examine the charity’s finances and it’s a good way to assess its commitment to transparency.
5. Share your intentions and make a long-term commitment
Savvy benefactors support their favorite charities for the long haul. They may engage more over time by attending events, volunteering, as well as by asking thoughtful questions and providing helpful feedback. Once donors make the decision to offer long-term support, they can inform the charity of their plans. Then the charity can save time and money by not sending the donor unnecessary solicitation.
Savvy donors uphold the values of philanthropy and financial responsibility. They know that giving is meaningful and can make a lasting impact for future generations.
The above does not constitute legal, tax, or financial advice. Please consult a licensed professional for recommendations applicable to your specific situation.