Charitable giving at year end: be generous and savvy

  • 2 min to read

Not long ago the Washington state attorney general’s website featured a headline about an unscrupulous charity that claimed to raise money to help Veterans but actually didn’t. It was a scam.

At the holidays, many people’s thoughts turn to their charitable giving for the year. This is also true of people trying to scam people out of their funds by pretending to help people when they are really only helping themselves. Being savvy means knowing how to do a little due diligence on charitable groups, especially if you do not know them first hand.

The special insert in today’s Union-Bulletin, the Charitable Gift Guide, profiles nearly 60 local charities, many of which you know. I encourage everyone to give generously to charity this year. I also encourage people to learn how to search for information about charities to be a better informed giver.

In 2019 I marked 40 years (and counting) of working in the nonprofit sector. For 27 years I worked at foundations, the past six of which I have been privileged to be at Blue Mountain Community Foundation. Most foundations conduct extensive background research on charities when considering a grant. BMCF definitely does. This information is just as helpful to individuals who donate as to grantmakers.

Here’s a few tips and resources:

1) If you receive a phone call or some other appeal from a charity that you are not familiar with, ask for a copy of their letter of tax exemption from the IRS or their EIN number (an identification number issued by IRS – its “Employer Identification Number”). Information searches are easier if you have an EIN for the charity in question. For example, BMCF’s EIN is 91-1250104.

2) Federal regulation: I highly recommend www.guidestar.org as the first stop to learn about a charity or nonprofit organization. That is because all of the annual disclosure forms filed by charities throughout the U.S. are available on that site. This form is called a Form 990. All nonprofits have to file with the exception of churches or houses of worship. Very small charities with revenues brlow $50,000 send a special postcard that shows they are active.

In addition to guidestar.org, another resource is the IRS’s own list of all tax exempt organizations in the U.S. available on its websiteirs.gov. It’s a three step search and pretty straight-forward: Go to “Charities & Nonprofits” button, and then “Search for Charities”, then click on “Tax Exempt Search.” If the charity is currently in good standing your search should find it on this alphabetical list.

Charities report mission, operations, revenue, expenses, assets, etc. and to certify that they are following the law in each year’s Form 990. You’ll find most of the relevant financial information on the first page. It’s important to note that if an organization fails to file a Form 990 three years in a row the charity loses its tax exempt status. This is important if one wishes to claim a charitable deduction: Donations to groups that aren’t 501 c 3 cannot be claimed as charitable deductions.

3) State of regulation: Charities are regulated by the attorney general and secretary of state. See access.wa.gov and search for “Charities.” Go to the secretary of state site unless you wish to register a complaint –—then visit the attorney aeneral’s site. Charities must register each year to keep their corporate status active and to maintain their ability to raise funds here. The corporate and the fund-raising registration are separate filings but both are with the secretary of state. Out of state charities must be registered in every state they are actively fund-raising; Washington charities have to register in other states where they actively fund-raiser in addition to their home state. If you receive an appeal from a group outside of Washington, ask for their Washington registration.

I hope this information is helpful to you now and throughout the year. My experience is that most of the Valley’s charities and nonprofit organizations that I know are up to date with their reports. The few that haven’t been have quickly filed. It is the unscrupulous who see the holidays as a golden time to take advantage of generous people that we should watch out for. And now I hope you have learned about a few more resources to help you do so.

Have a wonderful holiday and a happy new year!

Kari Isaacson is the executive director of the Blue Mountain Community Foundation.