Ways to Check Legitimacy of Charities

Last week the Illinois Attorney General took action against an allegedly fraudulent charity in Minooka.  Please know that there are a variety of ways in which donors can check the legitimacy of “charities” seeking your donations.


If you have access to the internet, please try some of the websites listed here to research charities before you give.


One is Guidestar — https://www2.guidestar.org/  Their tagline is “trusted non-profit information, confident decisions.”  Guidestar gets its data in numerous ways, including the IRS and the charities themselves.  A charity’s listing on Guidestar is not voluntary – they’ll list you with or without your permission.


If a charity files an annual 990 report with the IRS, it is on Guidestar.  While an IRS 990 report does not give you all of the information about a charity and its mission, it does give you the financial information.


However, a 990 is pretty complicated and doesn’t really do a good job of telling the charity’s story.  For example, large charities have large amounts of assets.  But this can be tied up in buildings, endowments, and special projects.  The traditional thought that charities are to operate close to the bone is still true, but just looking at assets on a 990 report can be deceiving.


In addition, I recommend you research whether the charity is strong in its governance.  Guidestar can tell you whether a charity is an IRS-recognized organization and the name of the legal charity.


Almost all charities are not-for-profit corporations, therefore they need to register with the Illinois Secretary of State — https://www.ilsos.gov/corporatellc/  This link allows you to search for the name of a charity in Illinois and whether that charity is current in their annual filings and has a “certificate of good standing.”


However, be aware that some local offices of national charities may not be listed here if they are not required by the State of Illinois to file separately.


The Illinois Attorney General’s website also has search capabilities: https://www.ag.state.il.us/charities/index.html  This is also a great website for donors (“consumers”) to learn additional ways to protect yourself from fraudulent charity solicitations.


These are ways to check the technical financial (and some governance) aspects of a charity.  But what if you want to know whether a charity is fulfilling its mission?


Ask for an annual report.  That annual report (usually) lists projects, staff, board, mission, and statement of financial position.  If it doesn’t produce one or list these items, ask why not.


If the annual report lists donors and you know a donor or two, ask those donors why they give.  If they list the board of directors, talk to those board members.  Why are they on the board?  What does the organization mean to them?


Ask to visit the charity and/or their projects.  All of us are proud of what we do and will gladly give tours of our work that is only made possible by donations from generous donors such as you.


But, this brings up a caution flag – you can still get bamboozled by charities when they produce their own materials – websites, newsletters, and annual reports can be faked; the empty field where they say they’re going to build a building may not be their field.


You best assurance is to ask around.  I can tell you that we members of the Grundy County Interagency Council can tell you every charity that is operating legitimately in Grundy County – we work with them all the time.  Most village halls can steer you toward someone with answers, as can the county.


Charitable work and donations can be precarious enough as it is without losing the trust of our donors due to an illegitimate peer.


Like any consumer choice, please do your homework before you give.  There are many options for research and I encourage you to use them.  You only strengthen the not-for-profit community when you do.