05-26-18 – Blog Queen - Sarah Raplee

Saturday, June 11, 2016

Charities versus Non-Profit

By: Marcia King-Gamble

"Charity" is a derivative of the Latin word Caritas. Breaking it down,  it means Love of God and Love of your neighbor. 

Why then are there are so many charities that seem to be self-serving? Way too many organizations list themselves as nonprofit yet they are anything but.  It's become a tax write off for some. 

A charitable organization or a non-profit organization's (NPO)  sole focus should be on philanthropy and the social well-being of the demographic it serves. Any associated activities should serve the public interest or common good.


One interesting and not so fun fact,  is that until the mid-18th century,  no such thing as a charitable organization existed. Charity at that time was limited to the giving of alms to the needy. Hence the reason that alms houses were created. Charity back then was the function of a church or parish and funded primarily on bequests from the wealthy. These charities were responsible for everything, ranging from education, health and housing,  to prison welfare.   

 Today, there are charities that operate under the guise of private foundations, obtaining their principal funding through a corporation, family, or single financial source. They have no need to actively solicit public funding. These private foundations use endowment funds to provide grants to organizations supporting their mission. Examples are the Bill and Melinda Gates Foundation and the Rockefeller Foundation.

  So how do you make sure the charity you want to start up, or donate to, is the real deal?

 In the USA the requirements for starting up a charity differ from state to state. But  the charitable organization does have to comply with federal tax relief and IRS guidelines. To qualify as tax exempt, the charity cannot politically campaign or fundraise for a candidate, and any earnings derived cannot benefit a sole individual.

 Once you decide this is the way to go. You need to design a business plan and ensure there is as much money coming in as going out.  You also need to make sure the organization qualifies as a non-profit and conforms to all the legalities.

Nonprofits are heavily regulated by the states in which they reside and the federal government.  This ensures their donors are protected from fraud, and that the nonprofit continues to serve the public good.

Good record keeping is also important. Nonprofits have reporting requirements that must be adhered to. A fund raising plan that is sophisticated, complex, and competitive is  a necessity. Now this goes way beyond bake sales or dinner/ dances. It requires planning, networking and  bringing  the right contacts on board.
 Speaking of boards, your board can make you or break you. Legally, said board, is responsible for keeping you on track and making sure your mission is accomplished. Board members are the ones to help you secure funds, and they also should be chosen with their expertise in mind.
 Say you’re not interested in setting up your own non-profit, then make sure to donate to those non-profits who use the bulk of their funds to serve the public good.  Research shows that the 4 non-profits below do an excellent job of this:

American Red Cross
Their administrative expenses are less than 5% of their total overhead, and they spend 92.1% of their income on programs that benefit the community. 

World Vision
Spends 85 cents of every dollar you donate toward stamping out global poverty. 

Doctors Without Borders
86 to 89 cents of every dollar you give goes to supporting the overall mission of providing healthcare to those in need in over 60 countries.

Invisible Children
This group's mission is to use media and social action to end the use of child soldiers in Uganda. The group spends about 80% of its donations to fund this goal.

Whatever you do,  choose your charities wisely.

About the Author
Marcia King-Gamble hails from a sunny Caribbean island where the sky and ocean are the same mesmerizing shade of blue. She is a former travel industry executive and a self proclaimed globetrotter. Marcia is particularly fond of Hong Kong, Venice, and New Zealand, not only for the scenery, but because of the mouthwatering food. A National Bestselling author, Marcia has penned 31 books and 6 novellas. Her free time is spent at the gym, traveling, and with her animal family.



Madelle Morgan said...

Hi Marcia,
Very informative post. I personally do not donate to charities that send junk in the mail such as plastic bags, cheap greeting cards, pens, keychains, personalized return address labels and the like together with a donation form. I don't want my $$ contribution going to pay for that useless stuff.

Thanks for highlighting wonderful charities that put our contribution dollars to work!

Sarah Raplee said...

I get so annoyed when I receive uncolicited address labels, etc., from so-called charities in the mail! Thank you for the info and for the list of charities that don't waste money. Very useful in making decisions about giving!

Marcia King-Gamble said...

Thanks ladies for commenting. Busy week and very late post. I am just really careful with my "charities." I once worked for a non-profit so I know the difference between a charity and a non-profit.

Diana McCollum said...

Great information! Thanks, Marcia!

Linda Lovely said...

Excellent post. I might add that there are different categories of nonprofits. Your donations to some may not be tax-deductible though they are still legitimate entities.

Judith Ashley said...

While I do not donate to organizations that send me cards in the mail, I save them and donate them to domestic violence shelters and programs for youth aging out of foster care. I also include either stamps or cash for the program to purchase stamps.

I use the note pads but toss the address labels.

Even though I don't donate to these organizations, I make an effort to find a way to 'pass on' their 'gifts' to me. When I do that, I know I'm saving something from the fireplace or recycling/garbage bin and it helps others who do not have the money to purchase such things as greeting or Christmas cards.