Thursday, February 23, 2017

Pay Yourself First

As a child, I remember my father often saying to me in his deep, authoritarian voice, “hey kid, always pay yourself first.” What he meant by that was to be sure to put money away for a rainy day. So, starting when I was pretty little, I squirreled away a little bit of the money I’d get for my birthday from a relative. As I got older, I continued the practice and saved some of my babysitting money and then part of my lifeguard salary. It wasn’t always easy to save when my friends wanted to go to the mall or go see a movie, but for the most part, I followed my dad’s advice. 

Recently, I was at a financial sustainability seminar for nonprofits and the concept of paying yourself first came up. The speaker made a strong argument for why charities must follow this principle. And it dawned on me that while I’ve long believed that charities should have a rainy day fund, I never thought of it as the same exact rule my father taught me as a child. 

Maybe, like me, you can recall that influential person in your life that taught you the importance of saving. But even if you can’t, I want you to consider how important this concept is for charities and why, as a donor, you should support them in their endeavor to squirrel away a little money now and then - even when it might be a difficult choice to make (like when I had to forgo a trip to the movies to see E.T.). 

In our rating system, we measure each charity’s working capital ratio - essentially its rainy day fund. We recommend that charities have a good 6 months to a year of reserves to fall back on when times get tough. Why? Because sustainable charities have the flexibility and strength to plan strategically and pursue long-term objectives. 

I know this to be true from first-hand experience. Once, I worked at a group that forgot to pay itself first when times were good. When revenue unexpectedly dried up, and with virtually no savings in the bank, the organization was constantly scrambling to make payroll and meet other short-term financial obligations. I saw with my own eyes how such organizations are not well-positioned to excel and make good on their missions. 

Charitable giving will always ebb and flow. And charities can’t always predict when it will constrict. So, if you want to ensure that your favorite charity can weather the next storm, then advocate that they build a reserve. Moreover, step up to the plate to help fund their plan to save. You could even go so far as to tell the charity that you’d like them to save a percentage of your next donation for the future. Working together in this way, donors can help charities build the necessary reserves to avoid having to cut their programs or reduce their staff the next time giving dips. 

So, I’ll end this post with my own twist on my father’s words of wisdom, “hey charity, always pay yourself first.”

Monday, February 20, 2017

Black History Month

Black History Month, or National African American History Month, is observed each year in February. The event is a time to pay tribute to the history, struggles, and triumphs of black people across the world. In honor of Black History Month, we hope you will consider supporting one of the highly-rated organizations that are working to promote black health, education, rights and community development in the United States.

Friday, February 17, 2017

World Whale Day!

credit: Isaac Kohane
Saturday, February 18th, is World Whale Day, a celebration of the largest animals on Earth.

Wednesday, February 15, 2017

Good News for Donors!

We've got some good news to share that should help you feel good about donating. Our research into the financial health, accountability and transparency of thousands of America's largest charities shows that the majority are performing at a high level. That is to say that most of the charities that we rate have a 3-star (good) or 4-star (excellent) rating.

Monday, February 13, 2017

Metric Mondays #11: Records Retention Policy

This week's Metric Monday focus is again on Accountability & Transparency, as we look at a key policy that helps ensure organizational accountability.

Friday, February 3, 2017

First Open Source Release of Code that Reads Digitized IRS Form 990 Data

Charity Navigator is dedicated to the advancement of informed giving. In the United States, most organizations exempt from income tax under section 501(a) must file an annual information return called the Form 990. These documents contain a wealth of information about each organization’s operations, finances and governance practices. Philanthropists, regulators, researchers and others rely on the IRS Form 990 as a crucial public record of nonprofit governance.

Love a Charity this Valentine's Day

Americans spent $19.7 billion dollars last Valentine’s Day. Buying chocolates, exchanging gifts, and giving flowers are all hallmarks of this holiday. How about trying something new this year? We’re challenging you to make philanthropy a part of your Valentine’s Day traditions!

We’ll get you started with a few ideas.  Here are 5 ways to love a charity this Valentine’s Day:

1. Donate to V-Day! Yes, there’s an organization that is actually named V-Day. This 4 star charity works to end violence against women and girls. Check them out here.

2. Send a Valentine’s Day themed care package to our soldiers abroad! There are numerous organizations that are dedicated to supporting both our veterans and our active duty service members. Organizations like Operation Support Our Troops and Operation Gratitude send care packages to our troops all year long.

3. Donate to your loved one's favorite cause! If they’re passionate about anything, from Animals to Education, we’ve got you covered. Use our Giving Basket to make a donation in the name of your loved one.

4. Plant a tree! Plenty of environmental charities will plant tree or conserve land in honor of your special someone. Organizations like Trees Atlanta will plant a trees in honor of your special someone.

5. Volunteer with a local charity! A lot of food banks and shelters will be hosting Valentine’s Day dinners for those in need, giving you the opportunity to spread the love through your service. Use our Advanced Search tool to find charities in your area looking for volunteers.

Now that the ideas are flowing, it’s time to come up with your own.  After all, the best Valentine’s gifts are the ones that come from your heart.

Wednesday, February 1, 2017

Show Your Favorite Charity Rating Service Some Love

Shopping for your loved one this Valentine's Day? Before you start, we invite you to take a minute to sign up for AmazonSmile. Once you do, 0.5% of your purchases will be donated to Charity Navigator as your charity of choice.