It’s that time of year again. Generous donors are looking to spend their charitable dollars wisely. To help you vet charities in your area, we’ve pulled together reporting resources we gathered while working on our America’s Worst Charities series with the Tampa Bay Times.
For background, here’s a guide we compiled for investigating nonprofits. It includes the basics of how to read nonprofits financial statements (Form 990) and some red flags to watch out for. It also includes some great tools beyond the 990. And, here’s a post we wrote specifically on digging into nonprofit finances.
1. Check to see if any of the 50 worst charities on our list are in your coverage area.
In June, the Tampa Bay Times and The Center for Investigative Reporting, in collaboration with CNN, published a list of the 50 worst charities in America based on how much they spend on for-profit fundraisers over a decade. It can be downloaded and sorted by state.
We used data from California, Florida and New York, the largest states that require charities to disclose the results of their professional fundraising campaigns.
Other states also collect this information, including Indiana, Massachusetts and New Hampshire. Request a copy from your state charity regulator, usually the secretary of state or attorney general’s office. It will lead you to local charities that deserve more scrutiny. For more ideas about how to use the data, check out our explanation of how we compiled the list.
2. Search our database of disciplinary actions
Check our database to see if nonprofits in your state (either located in your state or fundraising from your state’s residents) have faced disciplinary actions elsewhere.
Most charities and fundraisers have to tell state regulators about disciplinary actions taken by regulators across the country. But sometimes they aren’t truthful, even though these forms are often signed under penalty of perjury.
Have any charities in your area lied to state regulators?
KATU in Portland, Ore., compared charities’ registration filed with state regulators to the disciplinary database and found 30 charities were not honest about their past.
3. Take a look at the 20 nonprofits in your city or state with the highest revenue. Or, take a look at some of the newest nonprofits or oldest nonprofits in your area.
You can download a list of the charities in your state here. The IRS has also released more detailed financial information for tax-exempt organizations here. This dataset has information about when nonprofits received their exempt status (look for the column “Ruling Date”).
Bonus: The Washington Post also recently published a story about nonprofits that told the IRS they had discovered a “significant diversion” of assets, disclosing losses attributed to theft, investment fraud, embezzlement and other unauthorized uses of funds. The story includes a searchable database where you can look for nonprofits in your state.