New Mexico Central

‘Tis The Season…

by John Weckerle

As the end of the year approaches, we find ourselves contacted more often than usual by charities and other nonprofits asking for financial support either for holiday-oriented  initiatives or for their operations for the coming year.  In a time of economic downturn, these organizations feel the pinch just as we do; if people have less, they have less to give.  I’m not going to identify the nonprofits I plan to support next year in this article (although regular readers can probably guess at least one), or the ones I don’t (and many of you can probably guess a couple of those), but as I give pause to think about where the support for the coming year will be going, I find myself asking questions and formulating responses that I thought I might share.

1. What are our priorities in giving? Are we focused on charitable giving, business organizations, clubs, or others?  Are there specific missions – education, conservation, job creation, and assisting the poor, to name just a few examples – that rise to the fore when we think about what we want to accomplish?  Knowing our own personal “mission”  can be a deciding factor in figuring out where to send our support.
2. In considering whether to give to a specific group, is the organization’s mission a real priority for you?  When times are good, we often toss a little support to organizations that seem deserving, but don’t entirely line up with our top priorities from the mission standpoint.   When times get tough, we have to ask the question: Should we cut everybody, including the groups whose missions line up with my own preferred initiatives, or should we cut out those that are perhaps a little less in step with what we’re trying to accomplish?  That’s a question that everybody has to answer themselves.
3. What do you really know about the organization?  Ask for a copy of the bylaws, financial reports, list of Board members, schedule of meetings, etc.  Talk to current and former members or supporters of the organization if you can find them.
4. Does the organization focus specifically on initiatives you wish to support, or are your priorities just a subset of that organization’s activities?  Sometimes it may be better to put your money where it will be focused in the direction you desire, rather than handing it to an organization that supports your preferences, but may not spend all your money in the specific area you wish to support.  Some organizations have specific sponsorships and other ways to make sure your money helps achieve its intended purpose – but many just put it into the “general fund” where it may be used for any purpose at the organization’s discretion.
5. Is the organization well governed?  I’m sure everyone can think of an example or two of organizations whose stated purpose is in line with his or her objectives, but that has problems with management – transparency, integrity, internal/external politics, combative behavior, compliance with bylaws, policy making, and decision making, to name a few – that hamper the organization’s performance.  This has become a big one for me; I don’t have much interest in funding organizations that waste their funding or effort doing things of which I disapprove, simply because they do one or two things that I might be willing to support.  It’s almost always possible to find a way to fund those things directly without paying for bad management, dishonest practices, or other undesirable characteristics.
6. Is the organization really a nonprofit?  This year, I found out that two of the organizations I had supported in the past were presenting themselves as nonprofits, but were not.  You owe it to yourself to be sure (after all, why should part of your hard-earned money go to paying somebody else’s taxes, especially when they’re eligible for tax-exempt status?).  Take a look through Guidestar, or contact the IRS at 1-877-829-5500 to check on an organization’s tax status.  When looking through the Guidestar entry, make sure to pay attention to the details; if you see something there that conflicts with your knowledge of the organization, make sure to resolve the discrepancy before making your decision.
7. Is your contribution tax deductible?  Not all contributions to tax-exempt organizations are tax deductible.  This applies especially to business organizations, which fall under a different section of the IRS code than charities.  If being able to deduct your contribution is important to you, make sure that the organization falls under 501(c)(3) or another appropriate section, and not 501(c)(6).
8. Does the organization work to get money from other sources than membership and donations?  Social enterprise may not be something that every organization can manage, but most can.  Personally, I like to see organizations try to fund their programs through other available sources where possible – grants, fundraisers, gift shops, events, State employment programs (such as the Youth Conservation Corps), legislative appropriations, and so on.
9. For businesses contributing to business  or professional associations: What actual benefit is the business getting for its contribution?  Membership in these associations can certainly provide tangible benefits, marketing opportunities, etc.  However, businesses should examine these memberships annually to determine what benefit they received over the previous year and what they expect to see over the next year.  While the effect on the bottom line need not be the only factor you consider, it should be an important one.  If you’re getting out far less than you’re putting in, your money may well be better spent on advertising, marketing, promotion, or other efforts more directly affecting your business’s interests.  In other words, it’s often a good idea to consider how to get the best bang for your buck.
10. In lieu of money, can I help the organization with time and expertise?  Most people don’t necessarily want to serve on organizations’ Boards of Directors, but you don’t have to become a Board member to volunteer.  If you have specific skills or just some extra time, your help may be worth more than the money you can afford to give.  Depending on the organization, you may realize the added benefit of spending time with people who share your priorities and opinions.  You might even make a friend or two.

These are just a few things to think about when making your decisions on giving to nonprofits over the next year.  Of course, everyone will have other questions of their own to ask – but in a troubled economy, it is best that we ask them.

Thursday, November 20th, 2008, by John Weckerle and is filed under "Uncategorized ". You can leave a response here. Pinging is currently not allowed.