The Big Decision

So you've identified your values, you'ver picked how you will give and you've set your philanthropic goals.  The goals that articulate the kind of social impact you want to make.  How will you find the charities that best fit your values and goals?

First, decide if your community investment goals are locally, nationally or internationally based.  Depending on how you decide to disburse your funds will also play into the type and geographic location of the recipient organizations.  Make sure you have checked with your tax accountant and lawyer about any financial and legal implications your decision will have.

For charities that are Canadian based it is easier to make sure your philanthropic investment will be used appropriately.  Canada Revenue Agency recently released its policy guidelines on fundraising for charitable organizations.  This document defines what "charitable objectives" are and how organizations can spend your philanthropic investment.  A copy of this policy can be found under Materials in the Resources section of this website.

Second, ask questions!

Some basic questions you will want to ask a charity before investing are:

1. Has the agency adopted the Code of Ethical Fundraising (see Resources on this site for a copy) developed by Imagine Canada?
2. Can the agency provide you with two years audited financial statements?  You want two years (preferably three) because you need to compare growth in both revenue and expenses.
3. Who is on the Board of Directors?  What are their terms?  Does the Executive Director have a vote? Are any of the Board Members financially compensated?
4. Where does the core funding come from?  How long is that funding in place?
5. Does the agency have a strategic plan?  How often is it reviewed?  How are is the organization measuring itself against the plan?
6. What percentage of the operating budget goes to the highest paid salary?  How many paid staff are there?
7. How much does it cost to raise a dollar?  You might want to take the following measurements into consideration: 40% of Executive Director's salary, 100% of Fund Development staff salary, 50% of marketing/communications budget and 5-7% of general overhead expenses (rent, phone, etc.).  Under the Donor Bill of Rights written by the Association of Fundraising Professionals, as a philanthropic investor you have the right to know this information.  A copy of the Donor Bill of Rights can be found in the Resources section of this website.
8. Finally, and probably the question you are most interested in knowing the answer to, how will this agency invest your money?  How many people will be helped, animals saved, programs delivered, etc.

If you need more clarification - ASK.  For the most part, charities want to be accountable to their donors.  If you are not satisfied with the answers do not make that charitable investment.