• All nonprofits are required to make their tax returns (called a 990, or IRS990) available to the public.  Nonprofits that have a web presence should post them on their website, but you should be able to get a “public disclosure” copy of the 990 direct from the charity, or download it from Guidestar (www.guidestar.com) or Charity Navigator (www.charitynavigator.com).   Take a minute to really review the thing.  You don’t have to be an accountant.  Seriously.
• Good nonprofits are audited annually by an independent CPA firm.  It’s expensive, but a critically important best practice.  An organization worthy of your donation should be happy to share their latest audit with you.  In fact, they should be publicizing it, like on their website.  Do the numbers on the audit match the numbers on the tax return?  If not, why not?
• Any nonprofit you’re considering donating to should have a Board of Directors who serve without compensation.  Call one or two of them.  Of course they’re not going to say anything bad about the charity, but you’ll be able to tell if the board is actively involved in the governance of the organization just by asking a few questions.  If the Board member is more ignorant than you are about the financial operations of the nonprofit, that’s a problem.
• Make somebody else do all this work for you.  United Way partner agencies get extraordinary scrutiny annually from 20 or so “allocations volunteers” who have no vested interest in the nonprofits they review.  These allocations review panels do the financial reviews mentioned above as well as comparing that information to other, similar nonprofits in the area, they do site visits, they grill the board, management and staff of the agencies.  It’s pretty intense.  It’s not a guarantee that a local nonprofit is free of any problems, but it’s pretty close.
• You mustn’t take the reverse of the bullet above to also be true, though.  Just because an agency is not a United Way partner does not mean there’s a problem.  See if the nonprofit you want to donate to belongs to some other association or group that reviews their operation.  For example, City Rescue Mission is Oklahoma City’s largest homeless shelter.  They’re not a United Way partner agency, but they are a member of the Association of Gospel Rescue Missions, a national accrediting entity that has forgotten more about the best ways to run a homeless shelter than I’ll ever know.  Their review process is super-intense.  The fact that City Rescue is accredited by the AGRM is like a financial and operational “seal of approval.”  Again, not a guarantee, but pretty close.  Other kinds of nonprofits may have other accrediting entities you can look to.

It’s always a shame when nonprofits make the news in negative ways.  We all worry that we’ll be tainted by the same tar brush.  Our only hope is that donors who really care will go to the trouble of doing their homework and finding that cause they can support wholeheartedly because they know their donations are being used wisely.

• Shelter beds cost more than either transitional housing beds or permanent supportive housing beds.  That’s right, the band-aid solution is actually more expensive than solutions that try to get at the root of the problem.  But homeless shelters are the “simple” solution, easy for donors to see, understand and support.  Unfortunately, homelessness is a complicated problem and the simple solution won’t (can’t) have a permanent impact.  Don’t get me wrong.  People who go to our shelters often get their lives back in order and escape homelessness because of the help the shelters have to give.  In fact, most of the people who go to our shelters never return.  Unfortunately, shelters are not the answer for those of our homeless who have multiple barriers to getting back on their own two feet.
• Although we’re spending millions on shelter, we only spent $107,000 during the study period on case management.  Case management is what we used to call social work, and its the thing that prevents homelessness on the front end, and moves people out of homelessness on the back.  Imagine you have a mental illness, lets say you’re mildly bipolar.  Hard to hold a job and your inability to hold a job means you periodically get evicted or your utilities get turned off.  That’s depressing, so you turn to drugs.  Now you have three big problems.  One night you get taqnked up and get in afight that the police respond to.  Now you have a record, untreated mental illness, a substance abuse problem, a spotty employment history, crappy credit and a history of evictions.  Truth is, at this point, only someone trained to navigate the system and help you keep to the straight and narrow is ever going to be able to dig you out of the hole you’re in.  That’s a case manager – a critical component to ending homelessness in our community, yet only 1/3 of one percent of the total cost of homelessness.
• Local hospitals contributed more than $5 million to the cost of homelessness, with nearly three-quarters of that coming from St. Anthony Hospital.  This does not include any reimbursed costs (like from MedicAid) that the hospitals may have incurred.

There are other lessons to be learned from the report – especially concerning the chronic homeless and Oklahoma City shouldering the burden of caring for our neighbors’ homeless.  We’ll address those in later posts.

-Dan Straughan