Have you been wondering whether to donate to an NGO (non-governmental organization)? Have you wondered which ones are doing the work you want to support? This article provides some basic information and steps to follow to determine authenticity. A nonprofit obtains its 501c3 status through each state’s Attorney General’s office for legal authorization. However, not all states have an audit and compliance requirement. Nonprofit organizations generally function to benefit society and support meaningful causes and initiatives. While many nonprofits operate honestly, others do not.
It is imperative to vet the organization to ensure your resources are applied ethically and legally by organizations you have invested in. In this article, we will discuss different aspects of identifying and protecting your interests in the support of others.
We have provided a list of analytical questions as you read this article:
Does this organization have a political or religious mission? Does this matter to you?
Can you find information about the impact of the work being done currently?
Does the organization seem to be living up to its vision and mission?
Do you believe in the mission and vision of this organization?
Is the website up to date and is it a secure website?
Is there anything concerning about this organization?
Who are the partners of the organization? Is their contact information listed?
Who is on the organization board?
Is the organization’s budget listed transparently?

1. EXECUTIVE SALARIES
The names and salaries of key staff and board members and the highest-paid employees are required to be disclosed. Salaried positions are normally competitive within nonprofits to mirror market salary rates in comparison to for-profit organizations. If salaries are too high and spending is disproportionately conducted, operational spending on the needy can be reduced.
You can find the data for executive compensation in form 990 Part VII.

2. PROFESSIONAL FUNDRAISING
NGOs can utilize their own funds for fundraising. Issues arise when spending exceeds the budget for operational capacity. Financial gain is important for the capability of NGOs; therefore, it is not uncommon for staff members to be assigned to fundraising efforts.
You can find expenditures on fundraising in Form 990, Part I, Line 16a

3. PROGRAM BUDGET EXPENDITURES
Whether you donate towards general needs or in a specific area, check how the organization allocates funding. Major changes occurring to mission programs and their timelines of deployment are also key variables. Understanding money allocation across mission programs is important to understand how your donations are spent.
You can find program budget information on Form 990, Part III. There might be some supplemental information at the end of some NGO program descriptions.

4. WHERE DOES CHARITY MONEY GO?
The IRS annual spending report is a germane document that can guide your evaluation of the NGO. Since December 2022, the IRS is delayed in releasing nearly half a million tax records. According to a released ProPublica article and other government notifications, this issue stretches back to 2020, making reviews of charities’ performance since the COVID-19 pandemic problematic. Many financial documents are filed at the end of the fiscal year. For example, Form 990 does not provide deep insights into an NGO’s current finances as release dates are non-systematic. For larger organizations like hospital systems, this wait can be even longer. Once the IRS makes Form 990 public, it can be found by searching the state, type of NGO, or NGO name in the Form 990 lookup tool called the Nonprofit Explorer.
An NGO’s most recent tax form can be obtained by contacting the organization directly or pulling it from their website. To be noted: not every NGO complies with sharing the Form 990 directive. Nonprofits are required to share their Form 990 though these forms are long and sometimes complicated. Nonprofit Explorer summarizes key items and provides the original Form 990 for closer examination.

5. WHAT IS THE IRS STATUS OF AN NGO?
Nonprofits are generally 501(c)(3) organizations, an IRS code deeming them as exempt from certain federal and state taxes. Donations are also tax-deductible. Not every nonprofit is a 501(c)(3), some are 501(c)(4)s, or “social welfare organizations.” Donations to 501(c)(4) organizations are not generally tax-deductible and the NGO participates more freely in lobbying and advocacy. There are many community-based groups and advocacy groups which are categorized as 501(c)(4)s also. The NGO’s organizational structure will determine if you can donate to either a 501(c)(3) or a 501(c)(4). Confirmation of the proper tax status if the tax deduction is important to you.
You can find an NGOs IRS status on Form 990, in Box I.

6. OTHER ITEMS –FORM 990
There are 3 main ways to assess an NGO. There are also other techniques to dive deeper into the NGO financials and where to look inside Form 990.
Areas of interest are:

Ad Expenses
Relationship disclosures (business)
Lobbying
Voting members (numbers)
Employees (numbers and compensation)
Health metrics for finances (functional, assets, liabilities, income investment, net gain or loss, program service total revenue)

7. HOW DOES ONE EVALUATE AN NGO?
Lastly, where the money is spent in an NGO is only part of the evaluation process. The impact of every dollar spent on NGO programs and NGO services is also important to understand. NGO’s often issue a monthly or weekly newsletter illustrating the work being accomplished online or in print. The BBB (Better Business Bureau) is also a great place to locate reviews and ratings. Guide Star and Charity Navigator are two websites aggregating vital information on NGOs.
Generally, NGOs are rated on their finances, transparency, and effectiveness. NGOs are a conduit of your drive, passion, and desire to support and assist those in need. Ensuring they are ethically and morally compliant is an earmark of conducive performance and accountability. An NGO should operate in a manner worthy of your time and resources. ❦

About the Authors

Dr. Melanie Baker, DSW, MSW, MS

Dr. Mel is a retired Army Captain trained in intelligence and surveillance, logistics and supply, and mobilization operations. She currently lives in Alabama. She is a survivor of exploitation and trafficking. She holds multiple degrees due to her love of education with two master’s degrees in related helping fields of counseling and social work, one from the University of South Alabama and the other from the University of Southern California. She holds a doctorate in Social Work in Innovation, Leadership, and Management from the University of Southern California. She is a published author and an expert analyst for several non-profit organizations including Called2Rescue Ministries and The Shepherds, and FREE International. Dr. Mel speaks all over the state raising awareness and travels nationally participating in FREE International’s Big Search events as well.
Called2RescueMinistries, The Shepherds Rescue
855-733-5567
www.c2rministries.org
FREE International.
702-436-6105
www.freeinternational.org

Dr. Christian Nanry

Christian A. Nanry is a veteran and serves his community as a law enforcement official. He is a Board Advisor for PWP, and his research topics include Human Trafficking and Exploitation, Sextortion, and crimes against children.
He holds a Doctorate of Philosophy from Texas State University.

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