There comes a time when we think about what we will leave behind us. Have we made the world a better place? One way to ensure that is by leaving money to a charitable cause. A bequest or legacy can help fund a cause you care about, even open new channels of funding!
Picking the Right Worthy Cause
With over 1.5 million nonprofit organizations registered in the U.S., picking the right one to support can be difficult. All these organizations run on grants, contributions, and merchandise sales, but that is often where the similarities end. The sad truth is that there are charitable organizations that spend more on overhead, salaries, and advertising than they do on making the world a better place. You want to steer clear of those, and concentrate on charities that actually do what they say they do. That means research.
Ask Yourself What Is Important To You
- What causes make you passionate? Take some time to answer this, because this question will guide you going forward. Is there a cause that you identify with? Is there more than one? What kind of effect do you want your bequest to have on the issue? Some nonprofits raise awareness for an issue, others fund research, and still others help organize their communities. Ideally, your money would go to an organization that did all these things.
- What do you want in a charity? Beyond simply sharing your interests, your charity has to have some intrinsic characteristics such as a bona fide, 501(c)(3) tax exempt status, robust finances, and culture of transparency and accountability. Charities that meet these requirements are better able to reach their mission goals and far less likely to act unethically or irresponsibly.
Set-up a Meeting with Your Charity
- Get into specifics. Talk about their leadership and their finances. Discuss their needs, goals, challenges, and accomplishments. You want to see a real record of growth, good management and stewardship, and the ability to make a difference in the world.
- Talk about how they will use your gift. Share your ideas and listen to theirs. Be up front about any conditions you might have for the use of your bequest, but remember that an open gift will allow the charity to put the money to use where they feel they need it most.
- Pay attention to transparency. The information you get will tell you a lot, but so will the freedom with which you receive that information. This goes back to the value of transparency and accountability; if a charity leaves you feeling like something is hidden from you, or won’t speak with you at all, then you need to keep looking.
Case Study for Picking a Great Charity: Glaucoma Research Foundation
Let’s put these guidelines to the test using Charity Navigator, a great site for looking at how charitable organizations stack up. Remember: whichever charity you choose, it must have financial strength to weather hard times, and a culture that encourages accountability and transparency. For example, on May 1, 2017, Charity Navigator scored Glaucoma Research Foundation as follows:
- Accountability: 100/100
- Financial Health: 88.66/100
- Overall Score and Rating: 91.98/100
GRF earned these scores with powerful financials and strict accountability. Here are the numbers based on the fiscal year ending June of 2016.
|Program Service Revenue:||$363,400|
|Total Primary Revenue:||$3,484,739|
|Total Functional Expenses:||$3,820,169|
|Payments to Affiliates:||$0|
|Excess (or Deficit) for the Year:||$261,284|
|CEO Salary (Thomas M. Brunner):||$219,953|
This is an illustration of an open, accountable, and transparent charity. Instead of using funding for internal upkeep or advertising, the majority of contributions go directly toward the organization’s mission. In GRF’s case, that mission is preventing vision loss from glaucoma by investing in innovative research, education, and community support with the ultimate goal of finding a cure to the leading cause of irreversible blindness worldwide.
Now that you have an understanding of what to look for when choosing a charity to bequeath money to, it’s time for the search to begin. Don’t be afraid to ask for answers to tough questions or for more information. You want to be sure your money is going to help change the world, and the right charity will be happy to help you do just that. Explore our interactive planning tools to learn more about estate planning.
- Grantspace. “How Many Nonprofit Organizations Are There in the U.S.?” GrantSpace. N.p., n.d. Web. 23 May 2017.
- “Rating for Glaucoma Research Foundation.” Charity Navigator. N.p., n.d. Web. 23 May 2017.