Monday, August 06, 2007

Donor 101: What every donor should know about giving to charities


1. Know your charity. Many supporters only want to receive minimal information to keep them apprised of ministry efforts and prayer needs. Others like to know the doors are open to participate in a more personal way, visiting outreach centers, volunteering in soup kitchens, or joining short-term mission teams. Identify your own level of desired relationship and participation with the ministries that interest you.

2. Understand what your gift will accomplish. If you are giving for the general purposes of a charity, the overall ministry outcomes are aided by your gift. Are you giving to a project? If so, is the project sufficiently defined so you understand the project goals?

3. Give to accountable charities. While all organizations likely believe in accountability, some make themselves truly accountable. For example, ECFA members demonstrate their accountability by submitting to a set of accountability standards. Use the ECFA member directory at www.ECFA.org to determine which charities have taken a stand for integrity by joining ECFA. ECFA members have financial statements audited, reviewed or compiled by an independent CPA, provide copies of these financial statements to anyone who request them, have an independent board, and avoid conflicts of interest.

4. Focus on the mission of the organization instead of overhead percentages. Some people assume that the best organizations to support are those with the highest program expenses and the lowest overhead. It’s an easy calculation, and often used as a quick formula to determine “efficiency.” ECFA cautions against making judgments about ministry efficiency solely upon the calculation of expense percentages. Because of variables between organizations and the many factors that affect the reporting of expenses, a true “apples-to-apples” comparison is not possible, plus these calculations do not measure effectiveness.

5. Remember your role. Often, donors use the same language as investors and in many ways it’s good to think of the gift as an investment in the kingdom. However, that is where the similarity ends. All too often, donors forget they are to be “storing up treasurers in heaven” and expect more of a reciprocal relationship with the charity. All gifts are important and those that can give larger gifts have more responsibility, not necessarily more perks, privileges or access. The reward given to a donor is to be eternal, not temporal.

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