Selecting Charities for a Trust

[ER Eddie]

I'm going to get a Trust set up, and I want to give 50% to charity, spread out among maybe 5 different charities. So I'm going through the process of trying to select charities and wondered if anyone had any input.

I know the first step is to figure out what causes I want to support, and of course that's a personal decision. I've got that maybe 80% figured out. Help the poor, support animal welfare, maybe support a political cause, etc.

So my question is, were there any particular tools or strategies you used, in selecting the charities that you plan to leave money to in your will/trust? I'm talking about a fairly sizeable chunk of cash, so I want to select carefully.

I've come across Charity Navigator, which seems to rate charities based on "transparency." And then there's Charity Watch, which seems to rate them based on how much money the charity spends to make a dollar. Those seem useful.

Any other thoughts? I'm just looking for any input/experience.

 

[OldShooter]

I use guidestar.org to get nonprofit tax returns. If you're not used to reading this stuff, you might want to get someone/a CPA to help until you get the hang of it. I look for things like:

High staff salaries and names that look like dad, wife, and kids. i.e. nepotism

High expenditures for fund-raising.

Other high expenses (travel, entertainment, etc.) that take away from money used for the charitable purpose.

High balances in reserves unless the organization needs handy cash to deal with emergencies like epidemics, natural disasters, etc.

Suspicious expenditures to outside organizations.

For-profit subsidiaries; this is a good place to hide bad behaviour and nepotism because no financial information is released.

Odd or suspicious explanations in the supplemental information at the end of the return.

​

This is hardly bulletproof since there can be fraud, but I think it is a good place to start.

guidestar requires a free registration for access to tax returns but over several years I have never been spammed or otherwise regretted registering.

If you're talking serious money, consider visiting. It's a tax deductible expense IIRC. If the charity is local, consider volunteering.

HTH

 

[Midpack]

We chose the causes we want to support, and used Charity Navigator among other sources to pinpoint the 5 .orgs we’ve named as beneficiaries. Not weighted equally but those are personal choices.