Vetting a Charity Before You Donate

A Giving Tuesday guide for tax pros and the clients who trust us

Dec 02, 2025

Giving Tuesday inspires a lot of generosity, but it also generates a lot of noise. Clients get flooded with requests, links, and heartfelt stories, and they often come to us asking one simple question: “Is this charity legitimate?”

As tax professionals, we have a chance to help people give with intention. A few minutes of due diligence can protect the donor, the deduction, and the impact. Here is the process I use and encourage my clients to follow.

Step One: Confirm It Is a Real Charity

Always start here. Before anyone donates a dollar, verify that the organization is actually a qualified 501(c)(3).

Use the IRS Tax-Exempt Organization Search. If the charity does not appear, it is almost certainly not deductible. Newer organizations may not appear right away, but in most cases, absence means the donation will not be deductible. This single check prevents most of the problems I see every year.

Step Two: Use Simple, Reliable Vetting Tools

There are plenty of places online to get lost. I stick to the ones that consistently deliver clear, dependable information.

Charity Navigator
A quick snapshot of financial health, accountability, and results. The rankings on this site can be unduly harsh to smaller nonprofits.

GuideStar by Candid
It also shows leadership, transparency levels, and other helpful details.

Step Three: Pull the Form 990

The Form 990 is the nonprofit’s tax return. It is public, and it tells you more than any brochure or marketing campaign ever will.

Here is how to find it:

GuideStar by Candid
Search by the charity’s name or EIN. This is the fastest and most complete option.

The charity’s website
Look for a Financials or Transparency section. Well-run organizations post their 990s voluntarily.

IRS Tax-Exempt Organization Search
Slow but official.

If you cannot find a 990 anywhere and the organization will not provide one when asked, that is a red flag. Transparency should not be a struggle.

What I Look For On The Form 990

Mission and Accomplishments

Part I and Part III
The charity should clearly explain what it does and what it achieved last year. Look for specifics, not slogans.
“Delivered 425,000 meals” tells you something.
“Empowering communities” does not.

Governance

Part VI
Healthy nonprofits have independent boards, conflict-of-interest policies, and basic transparency. If the board is essentially one family or a close circle, pause and look deeper.

Executive Compensation

Part VII
Leadership should be paid fairly and appropriately for the size and complexity of the organization. Watch for compensation that seems out of scale, board members getting paid, or multiple family members on payroll.

Revenue and Stability

Part VIII
Check whether revenue is steady, growing, or wildly inconsistent. A charity with one major donor or one large grant is vulnerable. A charity with diversified support is more stable.

Expenses and Program Spending

Part IX
Look at how money is actually used. You want to see a reasonable amount going to program work. Ratios do not have to be perfect, but extreme or unexplained overhead or fundraising costs should get your attention.

Balance Sheet

Part X
This shows financial health. Too little cash may indicate instability. Excessive reserves may mean the organization is holding onto money rather than deploying it.

A quick review of these sections is enough to identify whether the charity operates responsibly.

Signs of a Well-Run Charity

When clients are deciding where to give, I tell them to look for:
• A clear mission
• Specific, measurable outcomes
• Transparent financial reporting
• Strong governance
• Steady revenue
• No difficulty sharing documents

These are the traits of an organization you can trust.

Red Flags Worth Noticing

If you see any of the following, slow down:
• Not listed in the IRS database
• High-pressure solicitations
• Vague mission statements
• No published financials
• Unusual payment requests
• Excessive fundraising costs
• Rapid leadership turnover
• Family-controlled boards
• Claims that “100 percent of donations go to programs” without explanation

Your instincts matter here. If it feels off, it probably is.

The Tax Rules Matter

Good intentions do not stand up in an audit without documentation.

For donations of 250 dollars or more, donors must receive a written acknowledgment that includes the date, amount, and a statement that no goods or services were provided in return. For non-cash contributions over $5,000, a qualified appraisal prepared by a qualified appraiser must be obtained, and Form 8283 completed. Clients should keep receipts, letters, the charity’s EIN, and all records of non-cash gifts.

Good records avoid unnecessary problems.

Final Thoughts

Helping clients give responsibly is one of the most meaningful things we can do this time of year. A few minutes of research ensures their generosity goes where they intend and that their deduction holds up.

The process is simple: verify the charity, check transparency, read the key parts of the 990, watch for red flags, and document the gift. With that, clients can give confidently and make a real difference.

Here are a few:

DFW Pup Patrol - Through the work of an all-volunteer staff, DFW Pup Patrol Rescue, a 501(c)3 non-profit organization, works to rescue and heal abandoned, abused, and neglected dogs in our community. The homeless pups we rescue are all put into foster family care so we can get to know each of them as they are all unique in their own personalities, behaviors, etc. We have rescued, provided medical attention for, rehabilitated in a behavioral capacity, and placed countless pups into new loving homes through our adoption program since March 2010. (This is where we adopted Kirby.)
Tzu Zoo Rescue - They match homeless Shih Tzus and Lhasa Apsos with ideal, loving forever homes and give these homeless animals a second chance at a wonderful, new life that they so richly deserve. By working closely with local animal shelters, they work to prevent the senseless euthanasia of unfortunate stray, abused, or abandoned pets who have ended up in the shelters or have been abandoned.
Austin Pets Alive - Austin is proudly the largest and longest running No Kill city in the nation, thanks to a groundbreaking and unique partnership between Austin Pets Alive! and the city’s municipal shelter, Austin Animal Center.
Your local animal shelters often need supplies and food. Reach out, ask how you can help.

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