How to Befriend a Nonprofit

• Location: Michael’s Craft Store, Saugus, Massachusetts
• Date: Saturday, June 7, 2008
• Description: patterned crane with this quote from “Dhammapada” by the Buddha:

Hostilities aren’t stilled through hostility, regardless.
Hostilities are stilled through non-hostility:
this, an unending truth.

I’m always surprised by the way people don’t research where they’re giving their money. Whenever I try to engage people about 990 forms and charity financials, they glaze over. It’s super easy to learn about nonprofits and their practices, and it’s a good idea to make sure your nonprofit of choice is using their money wisely.

The general rule for nonprofit spending habits is this: no more than 15% of expenses spent on fundraising, no more than 15% of expenses spent on administrative costs. That leaves 70% for programs and services. So where do these numbers come from?

I like to use Charity Navigator to look up information. This website breaks all the financial information down for you so you don’t have to do any work. Let’s take a look at the Elephant Sanctuary’s information. You’ll see that they’re rated at four stars — that’s the top score for Charity Navigator. Part of the reason why they have such a high rating is their fundraising efficiency, which is at $0.01. That means it takes them one penny to raise a dollar, so you know they’re not likely to blow your entire donation on boring stuff like salaries and office supplies — your money goes right to the elephants.

Let’s check out a one star charity: the Providence Animal Rescue League. A large chunk of their pie is taken up by fundraising and administrative expenses. Even though they’re close to the golden ratio, something’s off with their financials because they’re spending $0.32 to bring in every dollar. That’s kind of a lot of money. And not only that, they consistently outspend their fundraising abilities, which doesn’t bode well for their future. You can find out more about Charity Navigator’s methods on their methodology page.

The unfortunate part about Charity Navigator is that they only rate charities that raise more than $500,000 yearly. Some little nonprofits don’t raise that yearly, so how do you find out about their financials? Guidestar is the answer. You have to register to get onto Guidestar, but once you do, you can see the financial documents that each nonprofit is required to report to the government. This is where the 990s come in. A 990 is the charity’s equivalent of your 1040 tax form. You can find out all sorts of neat stuff from a 990, like how much the head of the charity makes, what kind of money they’re bringing in through donations vs. through federal support, etc. The first page is where you want to concern yourself if you’re looking for neat charts like Charity Navigator’s.

Unfortunately, I don’t have a 990 in front of me that I can blog about, and it’s a bit late to pull one up and go through the calculations that will get us the information, so I’ll skip that part for the time being. Here are a few things you can do to get on the good side of your nonprofit:

• Chat with someone at the office. Nonprofits like to know about their supporters — mainly so they can call on you in their times of need. This can work to your advantage, though; you’ll be one of the first to know about new developments once they realize you’re genuinely interested, and you’ll get neat opportunities to express yourself in their literature and on their website.
• Volunteer. Offer your skills if you think the nonprofit’s lacking in a certain area. Are they’re people always confusing there theirs? Let them know you’ll proofread their newsletter and website.

To Be Continued….