Donations for Nonprofits – Five Questions to Ask Before You Donate

donate

 

Non Profit Donation involve giving money to an organization or a cause (e.g. disaster relief, awareness, etc.) can support the life-blood of a non-profit organization.  Most non-profit organizations have a professional capability in place to apply for grants and pursue fund raising activities.  As a donor, regardless of being an individual donor or a foundation/organization with large quantities of money, there are a few questions you should ask yourself as there may be more than one organization who is deserving of your donation.  Doing your due-diligence, or at least thinking about a few important things, can help you make a more informed decision.

1. What is your Goal from the Non Profit Donation – Why are you Donating?

If your goal to support and strengthen the organization or an underlying cause?  For a budding organization, non profit donation support can ensure its ability to continue growing and having a broader impact.  Without a adequate level of donation base, it may be very difficult for an organization to continue having an impact.  However, if your primary motivator is to further a specific “cause” then you may be better off looking at mature organizations who have fund-raising tied to very specific programs and initiatives and can attest to allocation and outcome of such funds.

2. How has the Organization Deployed Non Profit Donation in the Past?

It is nearly impossible to judge how effective donations for non profits have been.  Organizational press releases are helpful but the focus mostly on the positive news-worthy items.  Depending on how much you are considering donating, you may want to ask the organization for references (donors as well as volunteers), or at the very least, conduct Internet searches to form an informed perspective.  You are looking for challenges that the organizations has faced with regards to its objectives.  Having challenges is not necessarily a bad thing, challenges may well be the reason why the non-profit organization came into being in the first place, but “bad” challenges are unnecessary competition with other organization, poor level of awareness, lack of enthusiasm on the part of other donors and volunteers after having engaged with the organization.  Internal challenges are, for the most part, bad, and may pose a barrier to how effectively your money is deployed

3. How Much of Your Non Profit Donation Actually Going to Make it to the Recipients (i.e. are the administration fees tolerable)?

As mentioned earlier, supporting a budding organization may mean that a non-trivial amount of your donation will be going towards supporting its operations.  However, some well established organizations also find themselves in that position, where they are no longer “startups” but have a large “operational” layer (e.g. salaried paper pushers) who end up being a drain of the organization’s resources.  You may want to see which other organization fulfills your aim for impact and has a lower administrative loss.  An important ratio to keep in mind here an organization’s Volunteer-to-employee ratio. Non profits utilizing volunteers in place of salaried staff members will have an advantage over others who rely more on paid employees – regardless of how “low” their salaries are.  However, all organizations need critical staff members, so having a “zero percent” administration fee is not realistic.  Having said that, comparing two or more organizations can help you make a more informed decision.

4. How Fast Will the Non Profit Donation Be Allocated to the Underlying Cause?

If your aim is to support a relief cause with significant urgency then your non-profit donation has to go to an organization which is able to deploy it most expediently. You may have to accept a slightly higher administration fee to get faster and timely impact (e.g. relief effect can be very costly, regardless of how many volunteers are willing to pitch in)

5. How will you Know the Impact of your Donation?

Lastly, an organization that is transparent about its programs, impacts, successes but also failures and challenges may stand a better chance in the long-run.  It all boils down to communication.  Expect/demand that the organization communicate the impact it is having from your money.  Ask them for past impact and how they measured it.

Conclusion

Non profit donations are difficult to get “right” and are at the same time very personal and important decisions.  You can reduce the trial and errors by asking yourself what does “support” mean to you, and how do you define “impact”.  Having information about organizations can help you make informed decisions and have the desired impact.

Creative Commons License photo credit: Mindful One

 

  • JoAnne

    Question – I am trying to learn about non – profit verbage/ contribution – or donation and fundraiser/benefit and the amounts of donations. So, if I host a fundraiser for a non – profit org. what is my responsibility to the donor/contributor? I think there is an amount of either 250 or 500 that ensures them a tax write off is that correct…or is it to everyone that gives /when we are asking for money. Who should we give and when should we give a thank you with our taxable id number for the money donated/received? Thank you!

Limited time 25% off coupon: "court425"