Charities are required by government to provide financial documents when asked.
Charities operate using good will donations from the public. Because the donations are considered public-use property by the government, charities must make their documents available on demand to the public. Any potential donor who desires to evaluate the reputation of a charity may ask for the documents. A reputable charity will provide copies without any questions, although it is allowed to ask a small fee to cover its expenses in making you the copies.
Instructions
1. Approach the main office of the charity to which you desire to donate, and introduce yourself. Tell the clerk that you are considering becoming a regular donor to the charity, and that you would like more information. Tell the clerk you would like a copy of the charity's Form 990, which most charities are required to submit annually to the federal government.
2. Log onto the Internet and visit any of a number of charity-ranking organizations. By performing searches on non-profits through these evaluation institutions, you can obtain more information on charities. Such organizations include GuideStar, American Institute of Philanthropy, and the Wise Giving Alliance (see Resources section).
3. Pay any small fee the clerk asks for in producing the copies you have asked for. Charities don't charge fees for copies to discourage people from asking for the documentation. The fees are meant to defray their costs in time and money to copy and to provide those documents. If the charity is overly hesitant about providing the copies, this could indicate that there are internal problems that are being hidden.
4. Review all of the documents to see what the charity is actively doing to satisfy its mission. The methods the charity uses should be of benefit to the public in general, and the work that has been done to date should be verifiable should you desire to physically interview people who have been helped by the charity.
5. Analyze the charity's Form 990, which is a detailed synopsis of how that charity has spent its donation money over the previous year. The Form 990 also shows where the charity's income came from, such as donations and other sources. Although this document might seem overwhelming at first, it shows a money trail and can expose whether the charity is trustworthy in how it appropriates and distributes the money.
6. Choose whether to donate, based on the information you have obtained. A reputable charity will show that most donation money is spent doing the work the non-profit has promised to do. If a charity uses more money for salaries and internal needs than it spends back to the public, that could signal mismanagement and "loss of vision" in meeting its goal commitments.
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