Vetting on Good St.

The Axes of Good

There are three main axes upon which we vet an organization:

  1. The Legit Activity Factor
  2. The Transparently Effective Factor
  3. The Affiliated Works Factor

The Legit Activity Factor

We ask if the organization passes the bar where we can fairly assume the organization is doing legitimate work for the public good. It involves a few different criteria:

  • Activity. Is the organization currently active? Has it done consistent work? Can we gather that it will continue to do so in the future?
  • Support: Does the organization have public support? Any recognition for the work?
  • Cleanliness: Is the organization clean cut? Or is there something sketchy going on?
  • Website: A brief survey of their listed activity on their own site.
    Questions we explore — Is the organization’s site updated? Is the organization’s staff listed on the site? Is the donate link active?
  • Google Web Presence: A Google of the last several (~5) pages as well as the google news articles on them. Searching the “Organization Name” in quotations as well as any used acronyms. For the charities with popular names/phrases, (i.e. “Helping Hand”), we’ll search the name followed by the word “nonprofit”/“charity”, the organization’s city, and/or executive director until we pick something up. If it’s a charity that cannot be easily found online, we will not feature them.
    Questions we explore — Does the charity’s web profile appear normal? Are there any public foundations that support? If so, how big and well-respected are they? Any controversies? Any controversial figures who support the organization? If the U.S. president publicly supports the organization that’s a good sign in many ways, but it’s also a flag to dig further to see if there is some political agenda involved. Do any celebrities or corporations support the charity? A big endorsement or sponsorship is nice, but it requires further investigation as there are cosmetic charities that essentially serve as PR fronts. We also ask whether there are reputable institutions that partner with the organization. There are many small overseas charities without much of a web footprint, for example, but an active university-partnered volunteer program would be a good sign.
  • Recency and Relevance: A google filter of web pages from the last month while searching the organization’s name.
    Questions we explore — Is there a mix of the organization’s own activity and other third parties mentioning the organization as well? Any blog posts by volunteers talking about their experiences? Are there any upcoming events? If there are less than 2–3 quality pages of recent (~last month) web activity it is reason to hold off unless there is evidence that would give reason for a smaller recent web footprint, or other clear sources indicating recent impact.
  • Leadership: A search of the executive director’s name, and checking out the LinkedIn profile.
    Questions we explore — Does the executive director have a normal online profile? Is her/his nonprofit title clearly their listed and current position? Is it all aligned with the nonprofit’s website? If not, it’s a reason to look further as to why that might be the case. Sometimes the executive director is older or likely not tech savvy, in which case we’ll take that into account. And occasionally, when there has been a change of leadership, there can be a mismatch between the charity’s site and the web presence online. In those cases, we check out both persons.
  • Social media: A survey of the organization’s recent social media activity.
    Questions we explore — Does the organization regularly post on social media? Can we gather any impact from their page(s)? Are the facebook and twitter icons from their site pointing to the correct URLs? If there isn’t much activity or if there is an irregular social presence, is there a reason why the organization might not be as focused on it or have alternative channels to communicate with the public?
  • Controversies: We keep our eyes peeled to check that there is nothing controversial going on, especially for larger charities that can get caught up in all kinds of sketchy work. We google the charity’s name with the word “controversy”, and any other words that might pull up the particular controversy suspected. Sometimes we can pick up something on their wikipedia page and sometimes it’s a search result on the second page of google detailing a lawsuit.
    Questions we explore — Has the organization been caught up in any controversy at any point in its history? Are there reasons to think they might at some point in the future? There are certain cases where over the course of a nonprofit’s long history they will get involved with controversies. Yet if: the issues are appropriately resolved, the organization meets all other tests of demonstrated public support and effectiveness, and the email cause wouldn’t have been as meaningful otherwise — we’ll feature the organization. An example is the Rockefeller Foundation, which has a long history some of which includes some questionable activity that has since been left behind.

Effectiveness & Transparency Factor

We say both effective and publicly transparent, as if an organization isn’t transparent online about their work and finances, we won’t be able to determine from our online vetting research if they are effective — and our default assumption is that they aren’t. We explore this factor through two main modes:

  1. Primary source analysis: Form 990 returns or other financial material available online.
  2. Secondary source analysis: Platforms that analyze 501c3s, including: Charity Navigator, Guidestar, Give.org / BBB, GiveWell, CharityWatch, and other sites that have a smaller and less consistent list. (Guidestar serves as both a primary source for tax return data and as secondary source with its supplementary rating-related material.)
  • Does the name and website seem correct, anything off?
  • Assuming it’s not a form 990 EZ, and has prior and current revenue, any sharp increase/decrease in program revenue, assets, or liabilities from year to year? What are the total net assets? Does the salary amount align with what would be expected given the nature of the nonprofit? And if the salary total isn’t listed — is the nonprofit all volunteer? If not, it’s a red flag.
  • What percent of total revenue is program revenue? We want to give where contributions are used, so if a majority of the revenue is program revenue, we will not feature unless it is publicly apparent the nature of the nonprofit and the contribution would be going to something other than an overhead black box. An example would be a hospital or member-based centers where donations are earmarked to a specific charitable program.
  • Is there significant Other Revenue on line 11? If so, we’re on the lookout for the breakdown in Part VIII.
  • Line 16a/b — any abnormally high fundraising expenses?
  • Line 17 — is there a high proportion of Other Expenses? If so we take special note in Part IX.
  • We make a mental note of the listed signatory name and if there is an accountant.
  • If it doesn’t align with what we would expect based on the leadership page on the organization’s website, more digging is needed to clarify why.
  • How detailed are the activities listed? Do the numbers look plausible with the breakdown?
  • If there are funds under Schedule O, we make sure those are listed towards the end in the Form 990 attachment as well.
  • We skim through to see if anything looks off — any further explanations needed by the IRS should be included as attachments at the end. Though we aren’t cross-checking each question to see whether any associated attachments are completed based on what they checked off.
  • We do take particular note, however, of the section on political-involvement/lobbying (IV: lines 3-4, Schedule C) and the series on potential self-dealings (IV: lines 25–28, Schedule L).
  • Less than 5 board members is a red flag.
  • We look at the CEO/executive director, cross-referencing with the website. Checking out salaries. (Generally will only see info on IRS-specified employees in their defined categories of “Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors.”)
  • We check if any numbers are out of whack, or if a large portion of the compensation is coming from a related organization — knowing what that organization is and if it makes sense. (A lot of times it’s a related association. So the head of the ABC Foundation gets a lot of his/her money from the related ABC Association, for example.)
  • If there’s ever a need for more info, we’ll check out the other persons listed on the 990.
  • We look if there is anything off with any independent contractors listed— are they giving a disproportionate amount or subcontracting out their whole operation?
  • We check to see if anything is out of the ordinary, especially if there were unusually large expenses/revenues flagged in Part I.
  • For organizations that we have reason to look into the accounting further (smaller with less detail) we’ll take greater consideration of the program, management, and fundraising expense ratios (IX; column B, C, D) is against the total expenses (IX; column A).
  • We don’t expect the numbers to fit a predefined box, but instead the multifaceted picture with all the info already gathered and to be gathered.
  • Beyond the above, if there are additional attachments (usually for larger organizations) we scan them to see if it looks normal.
  • For a grant-making focused organization we do not go through and add up the numbers of each grantee listed. We assume if there were any mathematical errors that was because an accountant didn’t catch it, not because something sketchy is going on. (Unless, of course, we would have any other reason to believe that something sketchy is in fact going on.)
  • Guidestar: Beyond the Form 990s provided on the site, the rating system and accompanying nonprofit-provided information serves as a secondary source of analysis. A platinum rating is a strong plus, gold is positive, silver is good/neutral. Bronze or null we’ll still consider but it doesn’t increase our confidence .
  • Charity Navigator: While the selection is limited to charities on the larger side, a rating is still a helpful stamp to guide the vetting. A rating of 4 is a strong plus in our books, 3 is good/neutral and 2 is a red flag.
  • BBB / Give.org: A bit trickier of a vetting platform. Like Charity Navigator, many charities aren’t on the platform. If all criteria are met and it is vetted that’s a nice plus in our books. If a few criteria aren’t met or if the organization didn’t respond/disclose it’s a red flag, but in the former case if there is some sort of satisfactory reason behind it, we would still feature. Like if an organization’s CEO is also the chairman of the board it can cause a flag for BBB. The jury isn’t clear though if/how much of an issue that really is — so if an organization by all other accounts is doing good work and is transparent about it, we will still feature. It comes back to making sure the ratings are taken in context of all the other information we have, to ensure a meaningful and impactful giving experience.
  • GiveWell: They review and conduct in-depth analyses of a select few charities. The organization is part of the larger ecosystem of effective altruist approaches to nonprofit evaluation. We look at their recommendations and extensive research from a non-ideological lens. Taking their empirical research but not necessarily the normative conclusions.
  • CharityWatch: There are a limited number of charities listed and we don’t look at as regularly. But the platform provides a supplementary take on any charities they do have. If an organization has a rating below B it’s a red flag.
  • GlobalGiving: We don’t actively search to see if an organization uses any crowdfunding platform like on GlobalGiving, but if we notice and it has been given certain accreditations, we account for that. GlobalGiving has several different badges that a nonprofit could earn as well, and each one is a small plus.
  • Review sites: GreatNonprofits, Yelp, Glassdoor, Indeed, Google/Facebook Reviews — all provide a different perspective on the nonprofit and how it is being managed. But like any review or review aggregator platform, the content needs to be put into context. An anonymous negative Glassdoor rating touting a burnt-out high-turnover culture and micromanaging CEO (plenty of those) doesn’t by itself mean the charity shouldn’t receive any funds. It’s something to take note of and put in perspective with all the other vetting information. Occasionally these sites will bring to our attention some more hidden issues, like unsolicited telemarketing practices that can find their way to the review platforms. It’s also a way to pick up on unreported or unrelated activity that doesn’t align with the tax returns / web presence.

Affiliated Works Factor

The third main factor we consider is whether the organization is affiliated with any particular political or religious agenda, either engaging directly in related activity or leveraging their platform to advocate for such. It’s important to stress that there are many charities that we do not feature that still do amazing work. There are countless incredible charities that those on the team personally donate to, but we wouldn’t feature on the Street.

  • Possible signs, political: Any advocacy/legal/policy-related charity, an environmental charity, a maternal health charity, charities where the word “justice” is brandished in a polarizing manner, and immigration-related causes.
  • Possible signs, religious: An organization that works overseas, in community homes or shelters, or if the organization has words like water, bread, hope, mercy, strength, ministry, inspiration, light, fellowship, covenant, house, grace, Sarah, Abraham, Angel, and any other religious-connoted words in their name.
  • Second pass : If we come across any of the above possible signs, we search the website (site:website.com) preceded by the search terms that would pick up affiliation in the respective area (putting “OR” between search terms). For politics right now that would include: republican, democrat, trump, obama. For religious that would include: god, faith, bible, jesus, christ, church, ministry, lord. (And because it doesn’t cost extra to add on additional search terms, we end up just searching for all potential terms regardless.) Most of the time for U.S. charities, religious affiliation is more likely with a Christian denomination, but it goes without saying we treat religions equally, and add whatever search terms are most relevant.
  • Third pass : If we still don’t pick anything up and we still have reasons believe the organization might be affiliated, we google the charity outside of its own website, with the relevant keywords.
  • Fourth pass: If we still don’t pick anything up after three passes and we still have reasons to believe the organization still might be affiliated, then we email the charity and ask them.
  • Activism/Lobbying: Whatever the legal definition of activism or lobbying, de facto many charities use their platforms to push a particular agenda directly through Capitol Hill or amongst voters. Imagine a charity that focuses on cleaning up beaches, but in a recent post on Facebook the organization deplored the decision to pull out of the Paris climate accord. In some way we are supporting the agenda-driven speech by donating, but on the other hand it is an auxiliary part of their work. When the Affordable Care Act was in the headlines, the same thing happened with charities in the healthcare space.
    How we address — By seeing if the organization is actively engaged in opposing or supporting affiliated legislation/regulation (policy whose support falls on Republican/Democrat lines). If there’s any indication of active ‘online lobbying’ of its supporters — a few posts in the past couple of months — it’s a no-go. If a charity makes one or two mentions expressing its view, without the clear intention to mobilize the public or those on Capitol Hill, that’s ok. Bottom line, the organization shouldn’t be using its platform as a microphone for an agenda.
  • Presidential/Party Opposition: Especially this past year there has been increasingly charged sentiment expressed on both sides of the aisle towards the current and previous U.S. president. Similar to the above, if the organization is actively using its platform to oppose a U.S. president, we will not feature them. We are not, however, searching a year back through their social media history to see if at any point in time the organization might have said something negative.
    How we address — We are looking for any recent social media activity, and any historical opposition through their website (with the keyword searches).
  • Spiritual: There are charities that may not affiliate with a particular religion but support a generalized ‘spirituality’. While we aren’t against spirituality in the least bit, the lines can get blurry when it becomes part of a specific religious agenda. We want to ensure folks on Good St. are comfortable knowing funds aren’t being used to fund particular religious activities.
    How we address — The way we deal with this is by seeing if that spiritual sentiment is baked into any of their programs. If it is actually part of their activities (like hosting spiritual guidance sessions), and by donating we would be furthering that, we will not feature. But if it’s a general principle/value of the organization that’s fine.
  • Area of Operation: Often nonprofits will operate or base some of their activities out of temples of worship. As nonprofits themselves, temples are a great place for affordable rent or partnering to further mutual missions of social impact.
    How we address — If an organization is simply using the space for secular purposes, that’s fine. If there’s any individuation that it might be used for a dual purpose to preach or minister, it’s an no-go.
  • Focused Religious Demographics: Many organizations focus on helping particular demographics. Even when an activity might not be religious in nature, sometimes the target demographic is split along religious lines. An example would be an international NGO that provides clean water to churches.
    How we address — If the organization is focused on one particular religious group, we will not feature them. If it is a mix, it’s ok in our books. So if the charity drills wells throughout towns, and some of them are nearby churches, that’s fine. As long as it’s not the focus of their mission to help one religious group exclusive of the broader public.

Vetting-Wide Approaches

So far we’ve spoken about making sure an organization ‘passes the bar’ through the Three-Axes factors, but with Good St.’s model that’s not enough. There are other considerations that we account for that are more particular to Good St.’s microgiving choice-driven platform.

Small vs Large Bias

When vetting on Good St. there is a bit of a bias against smaller charities, part of an unfortunate catch-22 where a charity’s size limits their ability to attract support. In some ways, one might see every additional dollar donated to a charity as another piece of implied social proof of the charity’s impact. Yet that can be misleading. What got an organization into that self-fulfilling social-proof-driven support could have been through unscrupulous means.

Confidence

Whenever we feature a charity, we need to do so with confidence that the organization is going to use the funds appropriately.

The Balance

So two charities pass the bar, and we are confident they are doing great work. But we aren’t done just yet. Any two charities will not work for a Good St. email. We need two charities that work well addressing the cause of the day.

  • Who — affecting the same demographic
  • What — the same problem
  • When — taking place in the same time (whether a current events or ongoing issue)
  • Where — in the same scale/location (international, national, regional, etc.)
  • Why — with the same particular driving motive behind it.
  • The organization clearly allows for donations to be designated to particular programs on their online donation form.
  • Or if the organization does not clearly allow for donations to be designated, with written or verbal conformation on the ability to earmark the donation.
  • Current Issues: There are a limited number of charities addressing time-sensitive current events issues like natural disasters, discussed a bit earlier. And if there are multiple disasters within the year, the pool of charities to pull from can start to run dry. Especially with the time-sensitivity, waiting until we find a fresh charity could mean losing the window of meaningfully addressing an important issue. And so while we will still try to find fresh charities, we will re-feature a charity during a time-sensitive current events issue.
  • Chapters: Organizations like Habitat for Humanity have multiple affiliated organizations. While they have separate tax ID’s and we can donate to them separately, in the spirit of trying to keep things fresh we will hold off from re-featuring charities from the same chapter affiliation within the last 3 months.
  • Duplicates: Sometimes there are just two charities we can find addressing a particular issue. Does that mean we should only feature the issue once a lifetime? Before refeaturing the same two charities, we’ll give it at least 14 month and ask both organizations if they know of other organizations in the space.

Basically

If this long-winded post is a testament to something, it’s to how the charity space can be complicated. We deal with the complexity by consistently asking how we can stick to furthering Good St.’s mission.

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