How Does a Charity Work?
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What a Charity Does
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A charity is an organization that directs donated funds, services or materials to those unable to afford them. A day's mail reminds us of the wide variety of organizations and the wide variety of human needs they address. Giving money or donating items to a charity enables people to assist those they may not be able to help otherwise, because of distance, culture or other elements of access. Part of a charity's function is to locate people in need of the help they can provide. The other part is to direct your donations to that purpose.
How a Charity Functions
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Because charitable work can be complex and a charity handles funds donated by others, a charity must meet several legal requirements before soliciting donations. One requirement is imposed by the Internal Revenue Service; a 501-c-3 tax-exempt or other charitable designation can be issued only if a charity can prove that the organization and staff do not generate a profit, as a business would. That proof, in the accounts and records of the charity, must be available to scrutiny not only from the IRS but also from any donor wishing to confirm that her donation is being used correctly.
A charity must meet state and federal requirements for independent audit and other accountability regulations.Putting it simply, if a charity tells you it is helping orphans in a foreign country, you and all donors are entitled to proof that this is occurring.
A charity can be kind, efficient, generous and innovative--but, first and foremost, it is required to be responsible to the people who support it and the people and cause it serves. -
How to Locate and Evaluate a Charity
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Sometimes it's hard to find a good way to give to a cause that concerns you. Sometimes you're asked to donate to a charity with which you're not familiar. In this situation, organizations that oversee and evaluate charities can be helpful. These organizations and others like them monitor financial responsibility and adherence to regulations. They can help you decide how to help others. Consulting the American Institute of Philanthropy's Charity Watch and Charity Navigator will provide information to help you make your charitable donations effective.
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