Difference between revisions of "Verify the 501(c)(3) Status of a Nonprofit"

#Gather information about the non-profit. To properly check whether a non-profit has exempt status, you need to gather as much of the following information as possible:<ref name="rf1">https://apps.irs.gov/app/eos/mainSearch.do;jsessionid=tVC0EbjNR43GlJnuc1CWUg__?mainSearchChoice=pub78&dispatchMethod=selectSearch</ref>

#Enter the requested information. Organizations will be listed under whatever name is on file with the IRS, either their legal name or their doing business as (or both). If you enter ''Red Cross'' then entries with either the word “Red” or “Cross” will show up. Put the name between quotation marks to search for the phrase.<ref name="rf2">https://www.irs.gov/charities-non-profits/exempt-organizations-select-check-search-tips</ref>

#Identify whether a religious organization is tax exempt. Religious organizations such as churches, mosques, and synagogues do not need to apply for tax-exempt recognition. Instead, they are automatically tax exempt if they meet the IRS requirements.<ref name="rf3">https://www.irs.gov/pub/irs-pdf/p1828.pdf</ref> For this reason, many will not appear in the IRS Exempt Organization List. Check whether the religious organization meets the following requirements:

#*Are the statements audited? If not, then that’s a red flag.<ref name="rf4">https://www.bridgespan.org/insights/blog/give-smart/nonprofit-due-diligence-financial-red-flags</ref>

#Resist high-pressure sales tactics. If you feel like the charity representative is a used-car salesperson, then you are probably not dealing with a legitimate charity. Avoid any charity that tries to pressure you into giving a donation.<ref name="rf5">https://www.stopfraudcolorado.gov/fraud-center/charity-fraud/red-flags</ref>

#*The non-profit has a name that is similar to a better known organization.<ref name="rf6">https://www.consumer.ftc.gov/articles/0074-giving-charity</ref> They may be trying to confuse the public.

#Beware of sweepstakes. Some non-profits employ sweepstakes to raise funds. Under this scheme, you get a chance to win the sweepstakes in exchange for a donation. However, federal law in the U.S. prohibits making eligibility contingent on giving a donation.<ref name="rf6" /> Avoid any non-profit that employs this scheme.

#Find information online. Fortunately, there is a wealth of information on the Internet about non-profits that is easy to access. Perform thorough research before donating to any organization. Check the following sources:<ref name="rf7">https://www.consumer.ftc.gov/features/feature-0011-charity-scams</ref>

#*'''Better Business Bureau’s Wise Charity Alliance'''. BBB accredits charities that meet its standards for accountability. You can search by charity at its website.<ref name="rf8">http://give.org/</ref>

#*'''Charity Navigator'''. This watchdog organization grades charities based on their financial health and their accountability.<ref name="rf9">https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=628</ref>

#*'''Charity Watch'''. This organization analyzes the financial reports of non-profits to determine how efficiently they will use your donation. It sometimes conducts special investigations of charities.<ref name="rf10">https://www.charitywatch.org/about-charitywatch/charitywatch-difference/3113/3118</ref> However, you must become a member to access their information.

#*'''GuideStar'''. Use this site to obtain balance sheet data for up to five years and IRS filings for up to three years. You can also find revenue and expense data for the current year.<ref name="rf11">https://www.guidestar.org/Home.aspx</ref>