Six Signs of a Healthy Social Profit

Stephanie Sample Photo

By: Stephanie Sample

You have a charitable budget. You know the causes you want to support. How do you determine that a charity is trustworthy and will handle your donation prudently? This blog post provides questions to guide inquiry about which social profits are healthy, prudent, and trustworthy. 

If you care about people, and make the decision to be philanthropic, step one is to make a charitable budget or spending plan. Whether you plan for giving per month, or allocate funds quarterly or annually, knowing how much you will give relieves the pressure of making last minute decisions as the plethora of worthy causes crop up.

I first learned of the concept of a charitable budget from a Buddhist nun in Kopan Monastery in Katmandu, Nepal. Speaking to a group of us who signed up for a weeklong meditation, she shared her method for charitable giving. Each day, she put the amount she would give to the poor in her pocket. Then, without hesitation, she would give when asked until it was gone.

I love her simple method! Making a decision ahead of time, gives us freedom about the amount to give. In a society overrun with outstretched hands, how can we be discriminating about which organizations to give to?

Healthy social profits have healthy traits, and low overhead is not the only one! Nor is percentage to the dollar spent on direct services.

Here are six areas to guide your necessary investigative research when you consider making a gift to a non-profit,

  1. Financial Transparency. Do they post their 990s on their website? Can you easily find annual reports detailing campaigns, progress, and outcomes over the year? Do they have easy to read financials on their website or in publications? Can you find a list of their community partners and affiliations?
  1. Communication. Healthy social profits provide regular updates on their core programs and areas of growth. They notify their donor base of staff changes whether new staff joining the team, or long time staff retiring. Be on the lookout for yearly or quarterly updates from the executive director and senior team on the strategy and mission of the organization. Communications should be current, timely, and provide insight into how the non-profit is responding to changing need in its sector of service.
  1. Campaign updates. Does your non-profit of choice have new campaigns that need new funding? Can you see progress of past campaign successes and goal attainment? In the middle of a campaign do you get updates on the progress toward the goal? Do they build a case for why they initiated the campaign or if it was unsuccessful, why it was retired or redirected?
  1. Reputation with the experts. While Charity Navigator has its weaknesses, it can still be a valuable tool for looking at the record of accomplishment of a social profit. However going to the experts is no substitute for doing your own research, especially due to the limited number of organizations judging the health of the multitude of non-profits in the country.
  1. Reputation with the community. What is the word on the street about the charity you are interested in supporting? Can you find local news articles and coverage about their campaigns and growth? Has the staff or organization received recognition in any way? They may just be starting out which doesn’t mean that the staff will not be well established and the mission backed by reputable funders.
  1. Responsiveness. Finally, if you want to make a significant donation, whatever the amount is for you, and know that it will end up serving the most good, take your time and run a test. The test can be simple. Call the organization and see if they return your call. Make a small donation on-line and notice how they acknowledge and thank you. Sign up to be a monthly donor at a low level and read their communications to get to know the organization.

Everyone has different reasons for giving to a social profit whether to prepare for tax time by making a tax-deductible contribution or wanting to feel good about our standing in the community. Regardless of our motivation, as in all of our relationships, we want them to be healthy. Asking questions is a fantastic way to avoid making assumptions that all non-profits with worthy missions know how to handle your money. Now go out there and be charitable, deliberate, and savvy!

About the Author

Stephanie Sample serves New Mexico communities in the social profit sector and specializes in strategic planning and efficiency, fundraising, and donor communications.

Currently, as Development Manager for NDI New Mexico, Stephanie connects philanthropic individuals and organizations both statewide and nationally to schools and children that need the power of the arts to transform educational experiences.

Since 2006, Stephanie has been active in fundraising and development contributing to social profits on the east coast and in the southwest by sitting on boards of directors, working to improve communications and meet annual goals.

Ms. Sample holds a Master’s Degree in Language, Literacy and Sociocultural Studies from the College of Education at The University of New Mexico and is a member of the Association of Fundraising Professionals. She is passionate about the power of gratitude in donor relations and daily life. She resides in Albuquerque and is currently working on her first book.