What are some transparent Colorado nonprofits to give to?
When looking to donate to nonprofit organizations during the holiday season, it’s tricky to know which 501(c)3 to choose. Colorado nonprofit organizations are numerous, serving multiple different purposes and populations. Before scheduling a donation for Colorado Gives Day or selecting a Colorado nonprofit for holiday giving, check out this gauge to determine whether a nonprofit is transparent, honest, and authentic.
How Transparent does a Colorado Nonprofit Have to Be?
Nonprofits are tax-exempt, public charities and are required by law to disclose certain information to the public and their board of directors. They are legally required to file certain forms with the IRS each year to keep their tax-exempt status and to provide official documentation of earnings.
However, the caveat here is that nonprofits only have to supply this information to the public upon request. There is no law determining how accessible this information is and nonprofits are not required to share this information with supporters unless requested. Many transparent nonprofits post annual returns (IRS Form 990), annual reports, and expense breakdowns right on their websites each year, making it easy for the public to see where donations are spent.
How can I tell if a nonprofit is transparent?
Getting to know the executive director and the board of directors behind any Colorado nonprofit is a great way to learn more about the heart, purpose, and authenticity behind an organization. We understand that this takes time and when looking to give for the holiday season, you can use these quick tips to vet nonprofits you want to support.
Is the annual report easy to find? Click around on a nonprofit’s website for a few minutes and you should be able to find a copy of the latest annual report. Some transparent nonprofits will provide copies of previous years’ reports so you can really see how the organization is spending, supporting, and changing over time. Honest annual reports could include financial statements, the approach to community investment, actual impact, and results. You can learn more about Mwebaza’s impact by visiting our Impact page!
Who is on the staff and board? Transparent nonprofits will utilize staff and board positions to diversify their areas of expertise. They will be careful not to partner with individuals who have a conflict of interest. To learn more about the amazing team behind Mwebaza, view our Team page.
Look for missteps in the nonprofit's financial history. People are fallible. However, if a nonprofit has a history of misappropriating funds, hiding reports, or stonewalling the IRS from collecting pertinent information, you might think twice before donating. Read reviews of other Colorado nonprofits on GreatNonprofits.
Check for awards of transparency. GuideStar is a reputable organization that requires nonprofits to upload years of financial records, opening up access for public review. We are excited that the Mwebaza Foundation has earned a Gold Seal of Transparency from Guidestar!
Consider the expense report. Some nonprofits will include this in their annual report whereas others will provide a separate report for the public to review. If you can’t find a breakdown of expenses either in the annual report or on the website, reach out to the nonprofit’s general email and request a copy. To foster transparency, they should reply in a timely manner with the information you seek.
Compare fundraising expenses and administrative expenses. If a nonprofit’s administrative expenses and fundraising expenses are a large portion of its total expenses, it may not be making the wisest financial decisions.
The Better Business Bureau recommends that at least 65 percent of the nonprofit’s total expenses should go towards program expenses, including salaries.
Charity Navigator sets a goal of “less than 10 percent” of the nonprofit’s budget for fundraising spending. It considers an organization that spends less than one-third of its budget on program expenses to be failing in its mission.
Reach out to the Colorado Nonprofit Association. The Colorado Nonprofit Association has a wealth of information about partner organizations throughout the state. If there’s one you’re curious about, contact them to learn more.
Small, local nonprofits function more as community partners than giant fundraising organizations. While these charitable organizations may not make international headlines, they often have a dramatic impact. Organizations like the Mwebaza Foundation rely so heavily on community engagement, that they are inclined to be as transparent as possible.
We count on the support, trust, and help of community members to carry out our mission and recognize that without local participation, Mwebaza may not exist.
It’s easy to give to a nonprofit with recognizable names like The Red Cross, CARE, and Amnesty International. These nonprofits carry huge overhead expenses, like salaries for C-suite executives, massive travel budgets, and staff housing for those employed internationally. By giving to a hyper-local nonprofit, you can have a better understanding of where your donation will go.
