Wise Giving Wednesday: Tips on Checking Out New Charities
The United States is known for having more charities than any other country. Specifically, the IRS Data Book for the year ended September 30, 2022, reports there were 1,480,565 organizations that were tax exempt as charities under section 501(c)(3) of the Internal Revenue Code. This includes 115,506 new organizations that applied for and received charitable tax-exempt status in that fiscal year. While the majority of new charities are of small size, some contributors will still be interested in making an informed giving decision. This can be a challenge since a relatively new charity will not yet have an annual report, financial statement and/or IRS Form 990 to review. BBB Wise Giving Alliance offers the following tips about giving to charities that have been around for less than 18 months.
Find out about state government registration. About 40 of the 50 states in the U.S. require charities to register with a state government office before they solicit donations. Usually, this is a division of the office of the Secretary of State or the Attorney General in that state. For specific information, see the following link.
Review the charity’s website. Even a new charity will likely have a website that includes basic facts about its intended goals and activities. Be wary of vague descriptions that do not provide any specifics about how the charity will carry out its efforts.
Consider board oversight. Although the charity is new, it will have a board of directors that is ultimately in charge of the oversight of the operations and staff. See if the organization’s website has a board roster that identifies who serves on the board and provides their professional affiliations. This may help you determine if the charity’s governing body is being led by individuals who have the knowledge and/or experience to address the identified cause.
Be cautious about emergency appeals. If the charity is raising funds for some type of disaster or other emergency need, it should be able to substantiate that the timing and nature of its expenditures will be in accordance with what is stated, expressed or implied in its solicitations. Also keep in mind that even with the best of intentions, it can be challenging for new charities to address emergency situations unless they have adequate connections or skills to address the circumstances at hand.
Heart of Giving Podcast
This week’s Heart of Giving Podcast features BBB WGA President & CEO, Art Taylor, providing highlights of all the podcasts produced in 2023. This is Part 2 of a two-part series.
We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include: