Check First Before Believing Facebook Claims On Charities

A dear friend of mine, last weekend, was circulating one of my least-favorite Internet pass-alongs — a grid that purports to expose financial mismanagement at some charities and point you instead to others.

The pass-along is wildly inaccurate, and the section of it dealing with Goodwill Industries is an out-and-out lie, falsely claiming that Goodwill is a privately-owned business rather than a not-for-profit, and listing a wrong name for its CEO. Another section complains about how little March of Dimes gives to “the needy,” which makes no sense because March of Dimes promotes research on and prevention of birth defects.

It is absolutely proper and responsible for you to research a charity before giving it money. But please do not ever trust these Internet pass-alongs for that information; many of them are untrustworthy and put out by people with an axe to grind, either to tear down such-and-such a charity or to make such-and-such other charity look good by comparison.

So where do you get accurate information about charities and their fundraising? The good news is that there are several places online to do just that. We’ve covered most of them before, but it never hurts to go over them again.

Charity Navigator,
GuideStar USA,
Better Business Bureau,
Tennessee Secretary of State’s listing of registered charitable soliciations,
Giving Matters (specific to Middle Tennessee charities),
Evangelical Council on Financial Accountability (specific to religious charities),

Each of these is a little different, and you may need to check more than one to get all the information you need. Some of them ask charities directly to submit financial information. Some of them are membership-based, and only give you information about their member organizations. Some work from publicly-available documents such as tax information. Some of them give pass-fail ratings or recommendations while others just present you with information and let you decide whether it’s good or bad.

Also, there’s a lot of variance in the way nationwide charities are structured. In some cases, the national (or international) office is the only listing and is in complete charge of all finances, and in that case you’d need to look up the national organization to determine whether your donation is being put to good use. But other charities have regional or local affiliates that operate under their own charters and are in control of their own independent budgets, and in that case you really need to look for United Way of Bedford County, for example, or Goodwill Industries of Middle Tennessee to find out how your donation is being used.

As I used to have to tell people when I served on the United Way board, only a tiny portion of your United Way contribution goes to United Way Worldwide.

I was on the board of a missions group when it joined ECFA, and I can tell you that organization takes its work seriously. ECFA was embarrassed by the televangelist scandals of the 1980s and strengthened its requirements considerably as a result. ECFA members must submit an annual audit and must also make it available to anyone who asks for a copy, and they must commit to best practices in fundraising — for example, if you tell donors you’re rasing money for a specific new building, and then aren’t able to build it, you have to return those donations rather than diverting them to another use.

Some of the things you’ll want to look at when researching a charity:

Program costs versus administrative or fund-raising costs.
How much of your dollar actually goes to the organization’s actual work? Obviously, it costs money to run a big national organization, and it costs money to raise funds. I’d rather a non-profit spend $50 to raise $500 than spend 50 cents and only raise $200. Sometimes, you have to spend money to raise it. But if administrative costs and fund-raising costs seem abnormally high, and you feel as if not enough of your donation is going to the actual charity work, you as a donor have every right to be concerned, and to give your money elsewhere.

Openness and accountability.
Does the charity make its audit and annual report available to the public? Does it respond to requests from the watchdog sites listed above? Is it governed by a strong and independent board of directors?

CEO salaries.
I bring this up because so many people are concerned about it, but frankly I think these types of complaints are sometimes overblown. I think a nationwide charity with a budget in the hundreds of millions of dollars is going to need to hire a qualified CEO with a lot of financial and management experience, not to mention the ability to comfortably hobnob with major deep-pocket donors. Such people don’t come cheap. While it would be nice to hire a qualified retiree who will work for a dollar a year, that’s not always possible or appropriate.

Yes, it’s possible for CEO salaries to be too high, but I’ve seen people complain bitterly about salaries that I thought were perfectly appropriate given the size and scope of the organization — and probably less than you’d find at a business with a similarly-sized budget.

If this is a major concern for you, you should be able to find accurate CEO salary information at one or more of the sites above — and if you can’t, that’s a red flag that speaks to the openness and accountability issue I mentioned earlier.

Even with the availability of watchdog and informed-giving websites, it takes a few minutes of your time to do research on a charity. But what you get from that time is the peace of mind of knowing that your donation is actually doing some good.

Please, though, don’t trust items passed around on Facebook when it comes to these issues. You could be doing a disservice to a charity that truly deserves your support.

We are committed to providing transparency to our donors and patrons. SEE HOW

Annual Report_2014_Cover

For more information on how Goodwill is impacting the lives of others read our 2014 Annual Report.

About Goodwill Industries of Middle Tennessee, Inc.

For nearly 60 years, Goodwill Industries of Middle Tennessee has provided job training and job placement free of charge to people with disabilities or other barriers to employment through the sale of donated items. In 2015, Goodwill served 36,081 people in Middle and West Tennessee and placed 15,412 people in jobs. More information about Goodwill’s Career Solutions, retail stores and donation centers can be obtained online at or by calling 1-800-545-9231.

This article was originally posted in the Times-Gazette on Feb. 18, 2016.
It is reposted here with permission from the editor.

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