It’s your right as a donor to conduct some due diligence—and even have some healthy skepticism—before committing your funds to a particular nonprofit organization. Just because someone asks you to support a worthy cause doesn’t mean you can’t take time to consider the nonprofit seeking your donation. The first step on the way to higher impact is to avoid fraud. Here are some things you can do to avoid charitable fraud:
A simple internet search
If a nonprofit, its staff, or its board has been the subject of negative press or an official investigation, that is a clear red flag to proceed with caution before committing funds. A simple internet search can identify red flags. In addition, nonprofits such as Candid, Charity Navigator, and BBB Wise Giving Alliance all provide free financial and programmatic information to help donors understand the work of specific nonprofits.
Remember the difference between a worthy cause and a worthy charity
There are many good and worthy causes, but that doesn’t mean that every charity addressing that cause is just as good. It’s a distinction that can be hard to remember when you feel strongly about a cause. It’s also why one fraudulent cancer charity successfully raised so much money: Donors who had friends or family with cancer found it hard to say “no.” They may have avoided the fraudulent charity altogether if donors had instead asked their friends and family: “Which nonprofits have really helped you?”
Get involved directly with an organization
By volunteering your time or speaking with staff or the people who benefit directly from the organization, you can get a first-hand look at how a nonprofit uses donor funds and other resources to benefit clients. You can also check our website for a wealth of information on how donors can maximize the impact of their giving.