by Julianne Buck
Last week I was asked how one goes about checking out a charity before you donate. There are numerous ways to answer.
Is the charity in compliance with state and federal filings? The Illinois Secretary of State (SoS) is the first place I look. Nonprofit organizations are corporations and file with the business services department at the SoS – “nonprofit” is just our tax status.
To start, go to https://www.ilsos.gov/corporatellc/ Very few nonprofits are LLCs, so click “corporate” and then follow the instructions for entering the entire name of the organization or a partial name. You’ll end up on a page telling you whether the organization has a Certificate of Good Standing. This is an annual filing that every nonprofit corporation must complete in the State of Illinois. If this is expired, do not donate to them and, if you are a friend of that nonprofit, give them a call to see why their certificate is expired. It might be a simple name or address change that didn’t make it into the SoS’s database.
Next, you can look at https://www.irs.gov/charities-non-profits/tax-exempt-organization-search Here you need the legal name of the organization or its EIN number. If you don’t have that or are not sure, you can look at a specific town where you believe the charity to be registered, or you can scroll through the list of all nonprofits in Illinois.
Once you find the correct one, the IRS tells you that organization’s deductibility code – “PC” stands for public charity. You’ll also see whether that organization files a 990-N, which is an annual filing via postcard or e-filing for small nonprofits with gross receipts of less than $50,000. You won’t get to view it, but you’ll know that the charity is current on their IRS paperwork.
If the charity is larger, you should be able to see recent years of 990s, the annual IRS filing document. You can learn so much about an organization via their 990, such as their most recent year income and expenses, assets, board of directors, and highest paid employees and contractors if over $100,000. I also ask you to look at Part VI regarding governance – Does the charity have a Conflict of Interest Policy? A Whistleblower Policy? If “no,” proceed with caution. This has been a requirement for years so there is no excuse for a charity to not have these governance policies in place.
Back to Illinois, also check https://www.illinoisattorneygeneral.gov/charities/ to make sure the charity has filed the Illinois version of the federal 990.
Another resource is guidestar.org. Years’ worth of 990s are here, but there can be lag time. Also, some of the information here is self-reported by the charity so it can depend on their diligence. But a good storytelling charity will use this opportunity to add information.
So this is the legal stuff, but what about your gut and heart? What does this charity do? What is the impact they are having in the lives of their clients and the community? Hopefully every nonprofit has a website that includes their governance and programs. You should be able to find the board of directors, staff, programs, and how to access them.
Who’s on the board? Are they trusted leaders in the community or young professionals with energy for taking the nonprofit to the next level?
Have you snooped at the charity’s social media pages, such as Facebook, Twitter, and LinkedIn? Are there complaints or negative reviews?
One thing I love about living and working in rural Grundy County is how easy it is to learn about someone or something – for better or worse!! A quick ask among your friends, at church, or at the grocery store can yield great information about who’s doing what in Grundy County.
In my 16 years at the Foundation, I have watched state and federal funding and grants decrease, so I encourage you to give to the charities that serve our county as donations may be the majority of their funding. There are many nonprofits across all sectors, so please don’t feel you need to give to all of them. Instead, please think about what’s important to you and the quality of life here, then give to the charities doing that work.
Giving at the holidays is a very personal choice. With a bit of research, you can be confident in the organizations that receive your gift.