How do various non-profits
use my charitable dollars?
By John F. O'Kane, CFRE
Senior vice president
Coxe Curry & Associates
Special to GwinnettForum.com
Part 2 of 3

(Editor's Note: This is the second of a three part written by John F. O'Kane, who for years has been part of the Metro Atlanta and Gwinnett scene for raising charitable dollars. The first of this series appeared in Gwinnett Forum on July 24, 2001, while the final article will appear in late September.)

Aug. 28, 2001 -- Faced with so many choices for our voluntary charitable contributions, when we do decide where to give, how do we know what the charities will do with our donation? I suggest you look for four things - a timely thank you, ongoing information, an annual report and a review of the nonprofit IRS form 990.

You should expect a prompt and appropriate response to your gift. Most non-profits will strive to acknowledge your generosity within a week. The smaller and more grass roots the nonprofit, the more patient you should be. If you have given the gift for a specific purpose, your thank you should note your designation. As a preference, I designate my United Way gift each year to specific nonprofit organizations endorsed by United Way. Besides the standard United Way thank you, I am especially encouraged when those non-profits write to acknowledge my gift and offer more information.

As a part of the thank you, the nonprofit should add you to their regular mailing list and offer you other opportunities like volunteering, a personal tour or more specific information about your area of interest. The only time you hear from a charitable beneficiary of your largesse should not be when they are asking for more money. Some non-profits lose sight of their obligation to inform and educate the donor. Such an overture creates an ever greater desire to provide support.

Most non-profits publish an annual report. As a donor you should automatically receive a copy. If not, write or call and request one. Recognize that this is the organization's chance to tell their story in a most positive light, but it still should be revealing. Remember smaller non-profits may not publish such a detailed report, but all non-profits should publish some kind of accounting to their constituency.

Lastly, request a copy of the organization's IRS 990 Tax Return. All non-profits with an annual income above $25,000 must file one and must make it available upon request. Some will post it on their website. This comprehensive report will show a breakdown of functional expenses for program, management and general and fund raising. You want to see 75-85 per cent of your donation going for programs to accomplish the organization's mission.

This return also lists; a statement of program service accomplishments; a balance sheet; list of officers, directors, trustees and key employees and their compensation; an analysis of income producing activities and selected other information. It differs from the annual report because the nonprofit cannot choose what it wants to publish, it must respond to standard questions asked of all charities. It has only been more recently that the non-profits have been required to make the 990 available. Note: names and addresses of contributors are not subject to public inspection.

As a donor you should expect both information and accountability from the charity you choose to support. You should also allow them to use a reasonable portion of your gift to run the organization effectively and to insure its future success.

Next time: Pro-Active and Defensive Giving

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