For many of us, donating to worthy causes during the holidays is a significant part of the season. Research shows almost 25 percent of our annual giving takes place between now and the end of the year. Nonprofits often rely on year-end donations as a vital part of their budget – making our generosity all the more important. But how do we choose where to put our money? From bells ringing in storefronts to giving trees, galas, appeals in our inbox and mailbox, #GivingTuesday, phone requests and Facebook, we are confronted with myriad options. Here are some suggestions for how to sort through the choices to make sound decisions about giving.
First, if you are unfamiliar with an organization, find out more. In addition to the nonprofit’s website, check out GuideStar - which publishes nonprofit tax returns. This is a tremendous resource available to all of us at no cost at www.guidestar.org. With few exceptions, every charitable nonprofit is required to file a tax return, called a 990, 990-N or 990-EZ, depending on the size of the organization. The 990 offers information about an organization’s revenue, programs, board of directors, and executive compensation. GuideStar is easy to navigate and exists to promote transparency within the nonprofit sector, an ethic most nonprofits embrace.
On page one of the 990, nonprofits indicate whether they are a 501(c)(3) (i.e., a charitable nonprofit) or some other type of 501(c) nonprofit. Why is this important? Contributions to charitable nonprofits are tax deductible. Additionally, 501(c)(3) organizations are not allowed to endorse candidates or attempt to influence the outcome of elections. This is important to many donors.
Another item of interest on the 990 is executive compensation. Though two-thirds of Montana’s nonprofits do not have employees, almost 45,000 people work for a Montana nonprofit. Nonprofits are mission-driven businesses. Compensation attracts and retains talent and is important to the capability of the nonprofit sector. Opinions vary on how much executive compensation is "too much." Typically, when we consider the type and size of an organization, we will agree that compensation seems reasonable. Having said that, if you believe executive compensation for an organization is excessive, you will want to make a different choice for your charitable dollars.
We sometimes hear stories about the misdeeds of a particular nonprofit. One of the reasons we’re so surprised by this is because the vast majority of nonprofits uphold their social compact with integrity, respect toward donors, prudence and passion for their mission. Philanthropy is a wonderful opportunity to intentionally support our values, hopes, fondest memories, fellow human beings and communities – be those local or global. By doing some research, we can ensure our generosity is well-placed, well deserved and reflective of our highest hopes and wishes.
In Missoula, 594 charitable nonprofits are registered with the IRS, not including all churches. Some are run solely by volunteers, others are among the largest organizations in the state. In 2011, 226 Missoula nonprofits employed 4,972 people, contributing almost $146 million to the local wage base. Collectively, Missoula’s nonprofits create affordable housing, protect human rights, encourage sustainable practices, offer mentoring by veterans, house those without homes, clean up streams, offer sanctuary, inspire adventurous and healthy living, engage youth in the political process, support artistic endeavors, deliver mental and physical health services, give away food, generate economic development and much more. In short, nonprofit organizations are central to the fabric of the community, and they are a primary reason Missoula is such an appealing place to live and play.
Last year a Gallup Poll measured how willing residents of all 50 states would be to move to another state, given the chance. Residents of Montana and Hawaii topped the list in terms of unwillingness to relocate! Montana’s quality of life is second to none, and nonprofits play a leading role in that. Financially supporting causes that matter to you increases your gratitude, contentment and quality of life – in addition to adding to the quality of life in your larger community. Our hope is that during this season, you will give thoughtfully, wisely and generously -- knowing that your gift will make a difference for others.