5 Things to Consider When Picking a Local Charity

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As the holiday season approaches, some families are feeling the pinch from higher prices this year due to inflation. For those who are more fortunate and ready to lend a helping hand, giving back to your local community is a great way to see the impact of your donations and to allocate help where it is needed most.

But where to start? Here are five tips to help your search for a local charity.

1: Follow your passion

Philanthropic investments should be meaningful to you personally – whether it be in areas like education, disaster relief, or hunger and food insecurity organizations. Once you’ve identified your passion area, dig deeper to find out what about those areas appeal to you.

For example, take education, which is a broad cause. Are you passionate about expanding youth literacy programs? Or would you feel good about sponsoring a scholarship for students in a particular community or demographic?

The takeaway here is to narrow in on your passions – either through the cause itself, in a particular location, or finding something hyperlocal, or finding something that impacts your daily life and that you can really get involved with.

2: Don’t be afraid to marry your interests

Given the range of nonprofits out there, marry your interests. Learn about the wide variety of nonprofit missions that aren’t completely confined into one bucket, rather they may tackle more than one issue. For example, you may care about animal welfare and also serving individuals who suffer from illness. Your research may lead you to discover an organization that engages volunteers to take animals living in shelters for therapy visits to patients at a local hospital.

Supporting organizations that tackle several issues at once could amplify the impact of each dollar you give. Picking causes you care deeply about could have real, long-term impact as you can become part of the transformative solutions on an advocacy and policy level.

3: Do some homework on the organization and look at their actual impact  

So now you’ve identified an organization that you’re passionate about. At this point it’s critical to research the nonprofit’s management team, board of directors and operating budget.

For instance – how the organization is run, who is making the big decisions and how much they spend on actual programming versus administrative costs. In other words: Are they using their dollars efficiently to address their mission?

Thankfully, this type of information is readily available for 501(c)(3)s nonprofits, which are required to publicly report their financials. In most cases, the nonprofit publishes this information on their website.

There are also sites like Charity Navigator and GuideStar, which make the financial research relatively easy, giving you a quick snapshot of a nonprofit’s financials and can tell you how effective an organization is at achieving its mission relative to how much money it spends.

One thing to keep in mind when looking at an organization’s financials: Nonprofits do need to pay their employees to run their programs and to (literally) keep the lights on. So while some organizations might appear to have an expensive operating budget, take a look instead at their overall effectiveness.

For example, a New York City-based nonprofit will likely have costly rent and overhead expenses to maintain a physical presence in the areas where their programs are delivered or their clients are served.

Also, check the news on the nonprofit you’ve identified. Search around and see what, if anything, pops up.

On the hyperlocal level, you can do more hands-on research such as going on site to observe, or talk to a board or staff member. These interactions can give you real perspective on the impact the organization is making.

4: Consider how much involvement you want within an organization

If you’d like your involvement to go beyond writing a check, consider what kind of access you’ll have to that organization with your gift.

For instance, say you have $5,000 you’ve allocated for charitable giving. 

With big nonprofits, realistically your donation is going to be one of many among hundreds of millions of dollars.

On the other hand, a donation of that size at a smaller, local nonprofit may give you access to events and volunteer opportunities with people in your community who share your passion for the cause. It may also give you more visibility and access to that organization and give rise to more opportunity for you to have other kinds of impact.

5: Maximize your donation

Think of your involvement with a nonprofit organization as an investment. There are creative ways and tools available to advocate and maximize the impacts of their investments.

With charitable donations, taking advantage of your company’s match, if offered, should be a no-brainer. More than 26 million individuals work for companies that offer matching gift programs and 65% of Fortune 500 offer those programs. However, an estimated 4 to 7 billion of the funds earmarked for a match go unused each year, so there’s a lot of room for potential impact here.

Find out if your company offers this perk, and if they don’t, you can always ask if they’d consider it.

There are also ways to regularly donate. Many nonprofits allow you to enroll in monthly or recurring donations, and some might offer payroll deductions should your employer allow it.

However you decide to give, and whatever organization you choose, make it personal.

Honing in on the aspects that are meaningful to you is where you’re going to get the most out of your donation.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this website were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions.