YouthZone Corner: What to look for when donating to a charity
June 9, 2017
Have you ever wondered about where the money goes after you've donated to your favorite charity? It's a good question to ask, and before making a donation, it may be a good idea to do a little research to ensure that the organization you are donating to is fiscally responsible and is up-to-date with its 990s and other financial information. Here are a few suggestions on how to research your favorite organizations:
• View the organization's website to review its financials or annual report, which shows income and expenses.
• You can request a copy of the 501(c )(3) letter or a W-9 form. Visiting Guidestar.org gives donors the ability to ensure an organization does have a nonprofit status. The 990s tab on the Guidestar website allows viewers to see important financial information for the organization — including compensation of executive directors and development directors. You can also look for charities on the IRS website: https://www.irs.gov/charities-non-profits/search-for-charities.
• Ask the organization what kind of oversight it has. Does it have a committee that reports to the board of directors that oversees all finances? What kind of checks and balances does the organization have in place to help protect against fraud? A sound nonprofit likely has an annual auditing procedure in place and is happy to answer any questions you may have.
You should always receive a receipt from an organization for any donation of $250 and above. (Most organizations will send a receipt for any amount, but the IRS requires them to send one for $250 and above).
Some entities seem to have a charitable purpose, but are not officially recognized by the IRS. Even if such organization puts the money you donate to good use in your community or for a worthy cause, you will not be able to legally take a tax deduction; therefore, it's always a good idea to know in advance to whom you are providing funds.
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For a quick way to help ensure that an organization is an entity you're comfortable donating to, you can visit coloradogives.org, as charities that are part of the Colorado Gives Day have already been fully vetted.
Throughout our region, there are so many great organizations that are truly doing great work to ensure our community is a better place, while also making sure to be completely transparent about where money goes. At YouthZone, we could not continue to help at-risk youth and families without the generous donations from the communities we serve.
Robin Tolan is YouthZone's development director.