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How to research a non-profit or charity

3:42 PM, Aug 30, 2011   |    comments
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TAMPA BAY, Florida - Did you know that 501(c)3 is just a tax code meaning the organization doesn't have to pay taxes?

Unfortunately, the job of making sure non-profits use donations for worthy causes falls on the shoulders of donors, who can use a number of online tools to learn about an organization.

See Also: Jump off a skyscraper for charity

First, find out if the organization currently has non-profit status with the IRS.

You can sign up for a free membership to Guidestar.org, where you can read an organization's recent tax forms (often Form 990) to learn about their revenues, salaries, fundraising costs, and board of directors.  Some red flags as you investigate:

  • High salaries
  • Board members receiving salaries
  • Board of directors or employees related to each other
  • High fundraising expenses in relation to revenue

While not all 990s are entirely accurate, they give a good idea of how an organization is spending its donations.

Other charity watchdog sites include:

You can also call a non-profit to ask specific questions about how their money is being spent.  Most that aren't religious groups are required to provide their last three 990s upon request.

 

Connect with 10 News Investigator Noah Pransky on Facebook at www.facebook.com/noahpransky or Twitter at www.twitter.com/noahpransky.  Send your story tips to noah@wtsp.com.

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