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Trust in charitable organizations is built through the transparency of their activities. Before making a charitable contribution, it is important to understand how to check a charitable organization and make sure it is reliable. Modern donors are becoming more and more cautious in choosing foundations to support, which is justified given the risks involved. The issue of trust is especially relevant in the context of the active development of the charitable sector in Ukraine.
Checking an organization is not just a formality, but a necessary step to protect your interests. A thorough check allows you to make sure that your funds will be used for their intended purpose and will really help those who need support.
There are several reliable ways to evaluate a charity. However, it is better not to rely on just one criterion and check the organization from different angles - from official documents to the foundation’s activity and reputation on the Internet.
Documentary verification of the foundation’s legality
The question of how to check a charitable organization is becoming more and more relevant. So, the first step in the process of checking a foundation is to find out the legal status of the organization. Any legal charitable organization must be registered in the official state registers and have the appropriate identification numbers. This is a basic requirement without which no organization can legally carry out charitable activities.
Lack of registration or outdated data in the registers may indicate problems with the legality of the foundation’s activities. Sometimes organizations can be excluded from the registers due to violations of the law.
Registration of the foundation with the state authorities
Checking the availability of a charitable organization’s EDRPOU in state registers is a mandatory procedure. The Unified State Register of Individuals and Legal Entities contains basic information about all registered organizations, including charitable foundations. A search in the register of non-profit organizations will help to confirm the charitable status of the foundation and find out the specifics of its taxation.
How else can I check a charitable organization online? You can use the register of court decisions and search for a charitable foundation by name and EDRPOU. The existence of court cases does not always indicate that the organization is not in good faith, but it may indicate potential risks or controversial issues in its activities. Some court decisions may relate to labor disputes or property issues.
The relevance of information in the registers is a key indicator of the organization’s responsibility. Late submission of amendments to registration documents may indicate a negligent attitude to formal requirements, which often correlates with the quality of the core business.
Legal basis and statutory documents
The charter of the organization is the fundamental document that defines the goals, objectives and principles of the charitable foundation. Reviewing the charter allows you to understand whether the declared activities of the organization are in line with your charitable interests. The mission of the foundation should be clear and reflect the real needs of society.
Charitable programs should be logically derived from the mission of the organization and be detailed in the charter documents. Vague wording or too broad a range of activities may indicate a lack of a clear strategy or attempts to hide the organization’s true goals.
The history of previous funding and the list of donors give an idea of the foundation’s reputation in the professional community. Support from well-known organizations or international structures usually indicates high standards of work and trust of partners.
Transparency and openness of the charitable foundation
How to check a charitable foundation is a question of concern to many conscious donors. Modern technologies greatly simplify the process of checking charitable organizations. Having an official website and an active presence on social media is a standard for respectable foundations. These platforms are used to communicate with both donors and program beneficiaries.
The absence of an online presence or outdated information on official resources may raise doubts about the organization’s activity. In the digital age, foundations that do not invest in public relations often lose the trust of potential supporters.
The quality and regularity of content on official resources reflect the professionalism of the team. Detailed reports on events, photos from project sites, and feedback from beneficiaries indicate active work and openness to public scrutiny.
Online presence and communication of the foundation
The question of how to check a charitable organization online is becoming increasingly relevant. And the first thing donors pay attention to is the foundation’s website.
A professional website with up-to-date information is a business card of a modern charitable organization. It should contain detailed information about the team, current programs, financial reports, and contact details. The ability to contact foundation representatives in various ways confirms the seriousness of their intentions.
Social media allows you to assess the activity of the organization and its interaction with the audience. Regular publications, responses to comments and questions, and participation in public discussions indicate openness to dialogue. If a foundation avoids public communication, it should be a cause for concern.
The physical presence of the organization should also be checked. A real office address that corresponds to the one indicated in the registration documents confirms the seriousness of the foundation’s intentions. The opportunity to personally visit the office and talk to employees adds confidence in the reliability of the organization.
Management structure and staff
Information about the founder, the management board (if there are several founders) and members of the supervisory board (if the foundation has more than 10 people) should be available to the public. The reputation of the executives largely determines the credibility of the organization and significantly affects its image in the society. The experience in the charitable sector, professional achievements and social activity of the managers are important indicators of the foundation’s reliability and efficiency.
The distribution of powers between different governing bodies should comply with the principles of corporate governance. The chairman of the board should not be the sole administrator of funds, and the supervisory board should actually control financial activities. A system of checks and balances ensures transparency in decision-making, preventing any abuse by management or individual employees.
The efficiency of using charitable funds is directly affected by the qualifications of the staff. Employees should be fluent in management, charitable programs, and the history of the organization. A professional team is the key to ensuring that charitable contributions are not only used effectively, but also properly reported.
The highest level of confirmation of the high quality of the foundation’s management is an independent audit by international auditors. The International Unity Movement charitable organization became the first Ukrainian foundation to be audited by ISO and confirmed that its compliance management system meets the requirements of the international standard ISO 37301, including fraud prevention and accountability at all levels.
Reporting of the charitable organization
Understanding how to verify a charitable organization should include an analysis of documents, financial statements, and the foundation’s reputation in the professional community.
The report on the use of income of a nonprofit organization, the balance sheet, and the statement of financial position are the main financial reporting documents. These documents allow you to quickly assess the number of employees, available resources, and financial stability of the organization at the end of the year.
Analysis of the dynamics of financial indicators over several years can reveal trends in the development or stagnation of a charitable organization. Stable revenue growth and program expansion indicate successful operations and donor confidence. Sharp fluctuations in indicators require additional investigation.
Earmarked funds in the organization’s balance sheet show which funds are intended for specific programs and cannot be used for other purposes. The presence of significant earmarked funds may indicate long-term planning or, conversely, inefficient use of resources.
Financial accountability
Financial transparency is the cornerstone of trust in a charitable organization. Knowing how to check a charity financially helps donors make informed decisions about their support. Analyzing financial documents allows you to assess the stability of the organization and the efficiency of resource use.
The ratio of program and administrative expenses is a key indicator of efficiency. The vast majority of the budget should be allocated directly to charitable programs, not to the maintenance of the management apparatus. According to Art. 16 of Law No. 5073, the amount of administrative expenses of a charitable organization may not exceed 20% of the total annual income. High administrative expenses may indicate ineffective management or concealment of the true goals of the organization.
Regularity and quality of reporting demonstrate the level of organizational culture of the foundation. Timely disclosure of financial information shows respect for donors and readiness for public control.
One of the highest standards of transparency is real-time reporting. For example, on the website of the International Unity Movement charitable foundation, you can see all receipts online, both general contributions to support the foundation and earmarked funds for specific projects. This approach allows philanthropists to track the movement of funds immediately after they are transferred.
Public annual report
Responsible donors should know how to check a charitable foundation’s public reporting. One of the key indicators of the foundation’s transparency is the publication of a narrative report in the public domain no later than six months after the end of the reporting year. Such a report should contain not only financial data but also a detailed description of the organization ’s achievements and plans for the future.
Reporting on the expenditure of publicly collected contributions demonstrates respect for the public trust. While private donors may wish to remain anonymous, the use of their funds should be transparent and accountable. Detailed information about the intended use of each contribution increases the credibility of the organization.
An independent audit report is an additional guarantee of the reliability of financial information. Audit reports can be published on the website or provided upon request to interested parties. A positive audit opinion confirms that the foundation’s activities comply with legal requirements and professional standards.
Conclusion.
So, checking a charitable organization is not suspicion, but reasonable caution. A thorough analysis helps to find foundations that really work for change and use every contribution effectively.
A reliable charitable organization is always open to scrutiny and will be happy to provide all the necessary information. Your questions about reporting, governance, and programs are a natural manifestation of responsible philanthropy. By choosing trusted foundations, you not only protect your money, but also maintain high standards in the charitable sector.
