Have you ever wondered what happens to the money you donate to non-profit organizations? Or do you not donate because you don’t know where it goes? Many people want to give to charitable causes, but become hesitant when they realize how little they know about how non-profits handle their money. The unanswered questions at the top of hesitant donors’ lists: Can a non-profit organization be a profitable business? And, if non-profits are profitable businesses, does that mean that donated dollars are not being put to good use?
by Corie Lynn Rosen
updated January 29, 2021 · 3 min read
Have you ever wondered what happens to the money you donate to non-profit organizations? Or do you not donate because you don’t know where it goes? Many people want to give to charitable causes, but become hesitant when they realize how little they know about how non-profits handle their money. The unanswered questions at the top of hesitant donors’ lists: Can a non-profit organization be a profitable business? And, if non-profits are profitable businesses, does that mean that donated dollars are not being put to good use?
Not surprisingly, non-profits can be, and often are run as profitable businesses. But a profitable non-profit is not like every other profitable business. “Non-profit” means these organizations cannot have any profits at the end of the fiscal year. With the exception of endowments and savings, all of the money that comes in must also go out.
The idea behind the rule is to require charitable organizations to dedicate as much income as possible to the charitable purpose they purport to serve. Non-profits are presumed to use all the money in excess of what they need to run their operations for their claimed cause. Because charitable spending is closely tied to claimed business costs, some suggest that the real question cautious donors need to be asking is, “Are non-profits taking more than their fair share of donated money for business use?”
Critics assert non-profits’ business arms take more than their fair share, paying CEOs astronomical amounts of money. That money should, they say, be used to further the charitable purposes for which these non-profits were set up.
Others suggest that non-profits, like any other business, compete to woo the best, brightest, and boldest people. In the course of that competition, it is only natural that salaries will trend upward for those who are most desirable. Those who perform at a superior level will be rewarded financially. From CEOs to accountants to receptionists, a non-profit needs the same services and expertise that any for-profit business requires. The people who fill those roles are just as capable and desirable as those who work in the for-profit markets.
The idea of paying an employee his going rate in the global marketplace makes sense to most skeptics. It is a little harder to convince those critics that the endowments and savings that many non-profits stockpile are actually essential to their continued viability. In order to assess whether or not the charitable organization of your choice is creating reserves in excess of their needs, or perhaps more accurately, in excess of their projected deficiencies, some research, and sometimes even a request for literature, may be in order. Even then, many skeptics believe that the big picture is almost never clarified by the legions of businessmen posing as do-gooders.
Those most frequently criticized tend to be those closest the non-profit limelight. Massive organizations like the Red Cross and the March of Dimes tend to be the target of most skeptics discussions. However, with just a little internet research, any interested party can discover that highly visible does not necessarily equal highly inefficient. In reality, non-profits are as unique as the people who run them – each has its own distinct personality and unique make-up. Broad generalizations about non-profit angels or crooks will tend to be wrong as just often as they are right. What does that mean for a charitable donor? Each non-profit must be analyzed on a case-by-case basis. That organization that you think is overpaying its CEO just might be the best thing to happen to your favorite charitable cause.
Are you looking for a list of nonprofit organizations that is organized by interest? Here is a partial list of non-profit organizations categorized according to specific focus areas. While some of the organizations could fall into numerous categories, each organization appears on the list only once and is categorized according to primary area of interest.
Advocacy Groups for Human Rights and Civil Liberties
These charities help people fight for their rights, either through legal advocacy or by providing education, awareness, and funding for human rights initiatives.
Animal Rights
Animal rights organizations seek to protect animals and their habitats through advocacy, as well as, action-based and educational initiatives.
Land Conservation and the Environment
These charities seek to protect the environment through education and conservation initiatives. Charities in these categories may focus on research, direct action, or political and legal advocacy.
General Emergency Relief
These organizations step in and provide relief during difficult times such as natural disaster and war.
Refugees
These organizations provide support for people forced to flee their homeland due to war, famine, political unrest, disease, and natural disaster.
Medical Assistance
These programs provide medical relief and assistance to people who may not otherwise have access to affordable care for financial, social, or geographical reasons. These organizations may also provide emergency medical relief.
Education, Research and Cultural Preservation Groups
These groups have specific missions geared towards improving education, providing more educational opportunities, promoting cultural awareness, or preserving the culture of specific populations.
Health: Research, and Education
These health foundations focus on research about specific illnesses. Many also have an educational component to enlighten people about prevention and management strategies.
Support for Chronic Illnesses and Diseases
These organizations provide financial, emotional, or medical support for people with chronic illnesses and their loved ones.
Cancer Support and Research
These cancer charities provide research and support for people with cancer and their loved ones. Support may include education and emotional support.
Support for Physical and Cognitive Disabilities
These charities provide financial support, education, and research for people with physical and mental disabilities, as well as their families.
Poverty
These organizations help the economically disadvantaged around the world with an array of programs such as education, advocacy, health care, housing, and anti-hunger programs.
Feeding the Hungry
These charities fight hunger around the world by providing food, clean water, and funding.
Promoting Self Sufficiency
These charities help people help themselves through education, micro loans, and similar initiatives.
Impoverished Children
These charities help children around the world who live in poverty by providing food, medicine, and education.
Senior Citizens
These charities provide advocacy, education, and research for senior citizens.
Supporting Military and Veterans
These charities provide support services for those who serve our country, as well as their families. Services may include financial assistance, mental health care, and veterans services.
Supporting Fire Fighters and Police
These organizations provide advocacy and support for the civil servants who keep us safe.
Watchdog Groups
These organizations make sure public organizations like the government and the media are operating appropriately and with honesty and integrity.
Children and Youth
These charities support youth in a variety of ways, from providing constructive youth activities to advocating for children’s rights.
Women
Women around the world face unique issues such as discrimination, domestic violence, and human trafficking. These charities support various women’s initiatives.
Finding a Complete List of Nonprofit Organizations
The above list is just the tip of the iceberg when it comes to the charities that are out there. There are several more places that you can look online:
- The definitive list for who is under the 501(c)(3) and (c)(4) tax code can be found at the IRS.
- Charity Navigator is a charity watchdog group that helps people get the most charity for their dollar. Charity Navigator can help you make wise charitable investments because it provides ratings for charities based on use of funds and other factors.
- The Foundation Center has everything you could ever want to know about grant making foundations and nonprofits.
- Another place to look for charities is the Better Business Bureau which lists all nonprofits that meet their criteria. However, it is not a definitive listing of charities but rather a place to go to look up information about a charity.
To find the best charity for you, search by interest to help sort through the thousands of charities out there.
