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Say you have a favorite dog charity and you’ve researched them on Charity Navigator; but they are unrated. What now? Does that mean they are not a legitimate charity? Does it mean that they are shady and don’t help dogs in the way they say they do? Does it mean that the entire executive staff is taking Caribbean cruises with your donation money?
Not at all! It simply means they haven’t met the requirements outlined by Charity Navigator. It’s a big job to do all the research and rate every charity everywhere. So, you have to draw the line somewhere. Get to their website to see the requirements which must be met in order for Charity Navigator to rate a charity.
It’s not really fair to compare large organizations with small ones. It’s just a different animal. By way of an explanation on their website:
“As our rating system is currently designed, we're comparing the financial health and accountability & transparency of similar charities to one another. It is our experience that the financial profile and governance practices of small nonprofits tend to be different from the thousands of larger organizations that we currently rate. As such, we have elected not to add small charities at this time.”
The good news is, with just a little extra effort on your part, you can do a similar investigation and find out if your dog charity is a good place for your donations.
First, charities must file a form 990 with the IRS. This is the same information Charity Navigator uses in their assessments of larger organizations. You can find these forms by logging on to Charity Navigator and typing in the name of your charity. To access these forms found in the lower portion of the selected charity’s page, you will need to register on the site. Don’t worry, we did this and receive no spam. You will want to look at the same factors in your investigation as the big boys: financial health, accountability, transparency and results.
Financial health is first. As a rule, an organization should spend at least 75% of their expenses on programs and no more than 25% on administrative costs. To find this percentage for your charity, go to page 10 (Statement of Functional Expenses), find Line 25 (total functional expenses). Divide column B (program services) by column A (total expenses) then multiply by 100. That number is the percentage that organization is spending directly on their programs and services.
Growth is a health indicator as well. You can determine if the charity is growing by comparing the total program expenses from the current year to the same information in the prior year. There is a Form 990 for each year listed.
You may want to take a look at the charity’s funding sources. Having multiple sources of funding is a good thing. If once source decreases or ceases entirely, they have others upon which they can rely. It’s the old “Don’t put all of your biscuits in one basket” theory.
We’ve all heard horror stories of executive pay being completely out of whack at certain charities. Research shows that an average for CEO compensation is in the low to mid six figures at the larger charities. You can find this information also on Form 990 on page 7. Remember that the size of the organization, geography and work performed will affect this number. Any executive earning greater than $100,000 annually must report.
Let’s not forget results. You wouldn’t go to a doctor who never healed anyone, right? Apply the same standards to your charity. Ask questions of staff. Visit the charity location. Trust your gut.
Armed with this information, you should be able to determine which charities are worthy of your donation and will do the most good with it.
Check back in with us to see which dog charities we are supporting on the daily and nominate your favorite to be the next recipient of our donations here at Off Leash Dog Boutique. Post them here. Hit us up on Facebook or shoot us an email at email@example.com and if your charity is chosen, you get a free gift, ‘cuz we like to give as much as you do!
Right now we are donating to Freedom Service Dogs of America. We love them because they rescue shelter dogs and train them to become service dogs for those in need. In short, these dogs learn up to 50 commands to help people with disabilities or illness. They train not only the dog; but the human so they are certain everyone’s life is enhanced and a beautiful relationship is born. They have a new program called Disco’s Dogs which provides service dogs and trained companion dogs to those ages 5 and up living with Autism. Love – Love – Love this organization!