It is very common for donors to do extensive research on a nonprofit organization before deciding to give. Donors want to know that they are investing in a nonprofit whose work is impactful, and that they are donating to an organization that they trust.
There are several online resources and tools that donors can use to find out more about nonprofit organizations—from their work to their finances to the partners they associate with.
This article will explain how to look up a nonprofit using a variety of different online resources so that you can verify its credibility.
Importance of Looking up a Nonprofit
While nonprofits are supposed to be mission-driven organizations, it is an unfortunate reality that not all of them deserve support from donors.
There have been many instances of bad actors managing nonprofit organizations and purposefully misappropriating funds or spending very little on advancing their mission, instead providing executives and fundraisers with huge paychecks.
For example, Kids Wish Network spent almost nothing on the children they serve, despite earning over $15 million dollars according to recent reporting.
Moreover, each year thousands of U.S. residents are victimized by charity scams especially during times of crisis or in the wake of natural disasters. As recently as February 2023, cyber scammers were reportedly taking advantage of the devastating earthquake in Turkey and Syria, preying on unsuspecting individuals who wanted to donate their dollars to a good cause.
To avoid charity scams and ensure your support is making a real impact, it is vital to know how to look up a nonprofit organization and how to leverage tools and resources for effective research.
That being said, there are thousands of nonprofit organizations that are doing incredible work everyday! Understanding how to look up nonprofits will help identify these incredible entities and guide you on how to use your dollars to ensure you are making an impact for a cause you believe in.
How to Research Nonprofits
So what should one look for when researching a nonprofit?
Fortunately, there is wealth of information about nonprofits available online at your fingertips. However, due to the sheer amount of information available it can be difficult to sift through and identify the most important data, facts, and findings.
For a high-quality review of a nonprofit organization, consider reviewing and focusing on the following key information below:
An excellent place to begin gathering information about a nonprofit organization is their website.
Most nonprofit websites include high level information about the organization’s objectives and activities including a mission and vision statement, organization overview and history, and guides for supporters on how to get involved.
Nonprofits also will provide detailed information on their websites about their services and programs and note ways in which individuals can take advantage of those services and participate.
If you find you are unsure exactly what a nonprofit organization does, this is probably a red flag. Most nonprofits will explicitly state their mission and work upfront on their website.
The more detail and more information you can find on a nonprofit’s website, the better!
Really excellent nonprofit websites will prioritize transparency and accountability. This means publishing reports, tax filings, audits, and other information on the website so it is readily available for donors and other supporters to review.
Large nonprofits like Planned Parenthood have very comprehensive websites and almost always include a page for financials and annual reports. You can review really great nonprofit websites so you have an idea of what kind of content to be on the lookout for.
All 501(c)(3) tax-exempt organizations are required to submit Form 990 to the IRS each year with a detailed report of their financial activities.
Most nonprofit organizations make their tax filings available on their website so donors and other supporters can review the document and be aware of what the nonprofit reported to the government each year.
Form 990 is one of the most comprehensive reports of a nonprofits financial activities that the public can access. However, these documents can be dense and difficult to interpret without accounting expertise.
Some web tools, including Instrumentl, will analyze and pull the data in Form 990s and parse that data out in ways that are easy for anyone to understand. Knowing what tools to utilize alongside a nonprofit’s Form 990 is helpful so you do not get confused or lost in the jargon and detailed language of the tax form.
A nonprofit’s annual report is a document published at the end of every year detailing the nonprofit’s key achievements, review of finances, overall impact, and recognition of donors and supporters.
While a Form 990 is intended for reporting to the IRS and government entities, an annual report is less formal and developed to be accountable to funders and other stakeholders such as community partners and volunteers.
Annual reports will often include a great deal of qualitative and quantitative information about donor impact including participant stories and direct feedback from communities on how the nonprofit’s work is supporting them and improving their lives. Annual reports will incorporate photos, infographics, and key outcomes to illustrate their impact in a way that makes sense to the average lay person.
For example, in their 2021 annual report, Feeding America included a dynamic infographic to highlights some of their key achievements to show stakeholders how their support is making a difference and contributing to change.
While similar in a few ways to a nonprofit’s IRS 990 filing, an annual report is not a document that 501(c)(3) entities are required by law to produce.
Seeing that a nonprofit has gone out of its way to publish an annual report is a good indication of its credibility and whether you can trust that your dollars will be put to good use.
The best way to obtain an unbiased view of a nonprofit organization is to seek out information on nonprofit watchdog websites.
There are several websites that rate and evaluate nonprofit organizations in the name of educating donors and providing them with insight into how their dollars are being invested.
Independent nonprofit evaluators like Charity Navigator analyze the activities of 501(c)(3) tax exempt organizations to ensure they are adhering to or exceeding expectations of industry best practices, including appropriate financial controls and accountability, leadership and governance, as well as overall impact and results.
Other nonprofit watchdog groups include but are not limited to:
CharityWatch, a watchdog site very similar to Charity Navigator, provides reviews and analyses of established nonprofit organizations who receive $1 million in public support. CharityWatch evaluates nonprofit financial reports and documentation including annual audits, Form 990s, annual reports, and state fillings. Each organization receives a grade from A-F depending on ChairtyWatch’s findings.
GuideStar, a subsidiary of Candid, is a nonprofit and foundation search tool that provides publicly available information about 501(c)(3) organizations and evaluates organizations based on accountability. Nonprofits that GuideStar finds exercise an appropriate level of accountability receive GuideStar’s “seal of transparency”.
GreatNonprofits evaluates nonprofit organizations and charities based on data pulled from the IRS. Nonprofits can claim profiles and donors can review organizations based on their experiences giving, volunteering, or supporting the organization in other ways. Nonprofits that receive stellar feedback and reviews receive a “Top-rated” badge that they can include on their website.
ProPublica is an independent nonprofit publication. In addition to frequent reporting on nonprofit organizations and their activities, ProPublica offers a database, Nonprofit Explorer, where researchers, journalists, and the public can access key data pulled from over 3 million tax filings.
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As a donor, the end result of your research into a nonprofit organization of interest is to determine their credibility. While it is important to thoroughly research an organization before making a donation, there are a few ways to quickly determine that a nonprofit is not a credible entity.
Keep the following in mind throughout your research:
The More Information, the Better: A key indicator that a nonprofit organization is untrustworthy is a clear absence of information. That can mean sparse or confusing information available on their website, or the absence of Form 990 filings from recent years from third party or government websites. A lack of transparency is your first sign that it might be best to invest your dollars in another organization or cause.
Be Thorough: “The more information, the better” is especially true for larger nonprofits or established nonprofits, but note that a lack of information is not necessarily an immediate “no” when researching which nonprofit to donate to. Remember that newer organizations may not have extensive information readily available due to capacity or simply due to the fact they have only been in operation for a year or two. Keep digging when you come across any newer nonprofits and use other indicators to determine credibility such as the types of foundations or major donors investing in their work, participant and community feedback, and note any agencies they partner with to advance their mission.
Note Instances of Bad Ratings and Reviews: Word of mouth is one of the primary ways nonprofit organizations make a name for themselves. If you come across poor reviews of a nonprofit organization (especially from donors, volunteers, or someone participating in their programs) that is an immediate red flag indicating that it is probably not an organization worthy of your support
Not All Press is Good Press: The resources listed above are absolutely key to understanding a nonprofit organization and determining their credibility. That being said, sometimes it takes no more than a simple Google search to uncover wrongdoing or malfeasance. Be sure to look up nonprofits on search engines and note any press or news stories that pop up and be sure to read them. A nonprofit organization would not necessarily publish bad press on their own website and those stories are not necessarily going to be revealed in a review of their tax forms or audits.
Wrapping Up: The Next Steps:
Knowing how to look up nonprofit organizations and research key aspects of their activities, financial standing, and credibility is critical. An educated network of donors and supporters ensures that dollars are invested in nonprofit organizations that are highly impactful and highly trustworthy.
For more information on nonprofits, charities, foundations, and other 501(c)(3) organizations, visit Instrumentl for a comprehensive funder database and a library of resources on nonprofit best practices.
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