{"id":9117,"date":"2024-05-01T09:54:02","date_gmt":"2024-05-01T14:54:02","guid":{"rendered":"https:\/\/www.nptrust.org\/?p=9117"},"modified":"2024-07-17T11:09:39","modified_gmt":"2024-07-17T16:09:39","slug":"awareness-for-donors-due-diligence-when-choosing-nonprofit-organizations-for-grant-recommendations","status":"publish","type":"post","link":"https:\/\/www.nptrust.org\/philanthropic-resources\/philanthropist\/awareness-for-donors-due-diligence-when-choosing-nonprofit-organizations-for-grant-recommendations\/","title":{"rendered":"Awareness for Donors: Due Diligence When Choosing Nonprofit Organizations for Grant Recommendations"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Grants from donor-advised funds (DAFs) experienced tremendous growth between 2020 and 2021, mainly in response to the urgent need for critical nonprofit support during the COVID-19 pandemic. However, as philanthropic efforts have increased, so have charitable scams and fraud, which typically spike during <a href=\"https:\/\/www.nptrust.org\/philanthropic-resources\/supporting-disaster-relief\/\" target=\"_blank\" rel=\"noreferrer noopener\">disasters<\/a>\u2014costing Americans more than <a href=\"https:\/\/www.ic3.gov\/Media\/PDF\/AnnualReport\/2023_IC3Report.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">$12.5 billion in 2023<\/a> alone.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While most philanthropists are at least tangentially aware of online fraud, it\u2019s critical to re-examine individual due diligence related to charitable giving and nonprofit organizations, as fraudsters and scammers continue refining and improving their malicious endeavors.<\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Conduct Initial Research<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The first step when considering a donation is to confirm the organization is a legal 501(c)(3) public charity. Donors can use the Internal Revenue Service (IRS) <a href=\"https:\/\/www.irs.gov\/charities-non-profits\/tax-exempt-organization-search\" target=\"_blank\" rel=\"noreferrer noopener\">Tax Exempt Organization Search Tool<\/a> to verify an organization\u2019s standing. Nonprofits will most likely provide their Employer Identification Number (EIN) on their website for confirmation. Independent, third-party databases, such as <a href=\"https:\/\/www.guidestar.org\/search\" target=\"_blank\" rel=\"noreferrer noopener\">Candid\u2019s Guidestar<\/a>, <a href=\"https:\/\/www.charitynavigator.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Charity Navigator<\/a>, or <a href=\"https:\/\/give.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">Better Business Bureau\u2019s Wise Giving Alliance<\/a>, are also helpful in identifying equivalent organizations operating internationally and can help verify a nonprofit organization&#8217;s legitimacy.<\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Be on Alert for Common Red Flags<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.justice.gov\/usao-hi\/pr\/common-fraudulent-charitable-contribution-schemes-during-times-disaster-and-emergency\" target=\"_blank\" rel=\"noreferrer noopener\">Fraudulent charities<\/a> will often falsely use the name of\u2014or present themselves as\u2014well-known or established nonprofit organizations. If giving online, always <strong>go directly to an organization\u2019s website<\/strong> rather than clicking through links. Be sure to rely on the organization\u2019s unique EIN or tax ID number.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.fbi.gov\/video-repository\/inside-the-fbi-charity-scams-120123.mp4\/view#:~:text=In%20charity%20fraud%20schemes%2C%20scammers,or%20for%20other%20illicit%20purposes.\" target=\"_blank\" rel=\"noreferrer noopener\">Crowdfunding through social media and email<\/a> is a hotspot for scams. <strong>Pay close attention to details like spelling<\/strong>, grammatical errors and images, as they can be telltale signs of a fake organization or website.<\/li>\n\n\n\n<li>Nonprofits rarely, if ever, reach out to donors directly through social media, <strong>nor will they use \u201cpushy\u201d tactics<\/strong> to get a donor to make a gift.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.fbi.gov\/how-we-can-help-you\/scams-and-safety\/common-scams-and-crimes\/charity-and-disaster-fraud\" target=\"_blank\" rel=\"noreferrer noopener\">Scammers often set up new organizations<\/a>. Look for a <strong>documented history of giving<\/strong> with any organization, especially if it\u2019s new or unknown to donors.<\/li>\n\n\n\n<li>According to the Federal Trade Commission, scammers often seek to obtain funds quickly through <a href=\"https:\/\/consumer.ftc.gov\/features\/pass-it-on\/charity-fraud#:~:text=They%20often%20pressure%20you%20to,the%20money%20will%20be%20used.\" target=\"_blank\" rel=\"noreferrer noopener\">cash, gifts, cryptocurrency, or wire transfers<\/a> and <strong>will refuse to send information<\/strong> or explain how they will use the donation. Legal nonprofits will provide secure methods of donation and detailed program information.<\/li>\n<\/ul>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Reach Out to Your Trusted Advisors<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In addition to conducting one\u2019s due diligence, communicate with your circle of trusted advisors\u2014including our staff at National Philanthropic Trust\u2014throughout the grantmaking process. The team of professionals in NPT\u2019s grants department facilitates a rigorous due diligence process that <a href=\"https:\/\/www.nptrust.org\/philanthropic-resources\/philanthropist\/how-npt-conducts-grantmaking-due-diligence-and-how-donors-can-avoid-charity-scams\/\" target=\"_blank\" rel=\"noreferrer noopener\">ensures a grantee organization is an active, qualified organization<\/a> with a 501(c)(3) designation and is eligible to receive grant funding from a DAF.<\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">What to Know When Giving Internationally<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">For donors looking to support international organizations, the first step may be to <strong>identify if they have any method of accepting donations from a U.S.-based sponsored organization or a \u201cfriend of\u201d domestic public charitable organization<\/strong>. Suppose the organization has neither of these things. In that case, NPT donor-advisors can still enter a grant recommendation to the international non-government organization (NGO) using the donor portal by manually adding the grantee to their Charity List and submitting the grant recommendation. Our grants team will review the organization and conduct due diligence to determine if the organization is the equivalent of a U.S. public charity in its nation of origin, and therefore an acceptable grant recipient.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s important to remember that due diligence for donors and advisors is a smart and safe approach to grantmaking, allowing for philanthropic efforts to become a reality.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Grants from donor-advised funds (DAFs) experienced tremendous growth between 2020 and 2021, [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":9145,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"_has_post_settings":[],"footnotes":""},"categories":[44,30],"tags":[],"hashtags":[],"class_list":["post-9117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-for-donors","category-philanthropist"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Awareness for Donors: Due Diligence When Choosing Organizations for Granting | NPTrust<\/title>\n<meta name=\"description\" content=\"For philanthropists, researching and vetting nonprofits in the U.S. and abroad takes more than just a keen eye; here\u2019s what donors need to know when it comes to their charitable giving.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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