By Robin Tolan, YouthZone Development Director
Have you ever wondered about where the money goes after you’ve donated to your favorite charity? It’s a good question to ask, and before making a donation, it may be a good idea to do a little research to ensure that the organization you are donating to is fiscally responsible and is up-to-date with their 990s and other financial information. Here are a few suggestions on how to research your favorite organizations:
- View the organization’s website to review their financials or their annual report, which shows income and expenses.
- You can request a copy of their 501( c )(3) letter or a W-9 form. Visiting Guidestar.org allows donors the ability to ensure an organization does have a non-profit status. The 990s tab on the Guidestar website allows viewers to see important financial information for the organization – including compensation of Executive Directors and Development Directors. You can also look for charities on the IRS website: https://www.irs.gov/charities-non-profits/search-for-charities
- Ask the organization what kind of oversight they have. Do they have a committee that reports to the Board of Directors who oversees all finances? What kind of checks and balances do they have in place to help protect against fraud? A sound non-profit likely has an annual auditing procedure in place and is happy to answer any questions you may have.
You should always receive a receipt from an organization for any donation of $250 and above. (Most organizations will send a receipt for any amount, but the IRS requires them to send one for $250 and above). There are some entities that seem to have a charitable purpose, but are not officially recognized by the IRS. Even if such organization puts the money you donate to good use in your community, or for a worthy cause, you will not be able to legally take a tax deduction; therefore, it’s always a good idea to know in advance to whom you are providing funds.
If you are donating to a Colorado nonprofit and they are part of the Colorado Gives Day, then the organization has submitted all the necessary IRS requirements to receive donations.
Throughout out our region, there are so many great organizations that are truly doing great work to ensure our community is a better place, while also making sure to be completely transparent about where funds go. At YouthZone, we could not continue to help at-risk youth and families without the generous donations from the communities we serve. Thank you!