GuideStar Charity Check
Hello,
We are brand new to Foundant. If your Charity Check does not pass on a grantee from a donor advised fund, what information do you require from the organization before you allow the grant to be approved?
Comments
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Hello SallyHermann-
If the organization is not a 501(c)3, then the next question is are they are qualified organization to receive a charitable gift (unit of government, for example). If they are NOT a 501c3, does the organization have a charitable arm that the grant can be dispersed to? IF so, get that EIN. The only time I bypass the charity check is when I know for certain that the grantee is a qualified organization. Does that help?
Pam
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Thanks, @pamfarrar. Since the Charity Check doesn't give a reason for the "fail", I wasn't sure if that mean the org is not a 501c3, or perhaps another reason where you would request additional information from the organization, such as an updated 501c3 tax determination letter, or other??
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It is always a good idea to confirm you have the correct number, as it could be a error/typo. I don't believe CSuite tells you the reason why, only that they're not a 501c3. Sometimes the organization will give you what they believe is a charitable EIN, but it is not. I've had to call back churches to find out if the Church or if the Church uses a larger "umbrella" EIN that the church uses to receive charitable gifts, but churches are considered a qualified organization, but our CF is trying to get a charitable EIN if the organization has one. Hope that makes sense.
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Great, thanks Pam!
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Hi, I ask the nonprofit to send proof of exemption but sometimes they are not aware if their exemption has been revoked. I also check the IRS website if GuideStar comes up unverified because GuideStar is not always up to date with info.
https://www.irs.gov/charities-non-profits/search-for-tax-exempt-organizations
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Great, thank you Johnna. I will check the IRS website, as well.
Sally
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This has only happened to us once in 10 years. I notified the organization, which knew there was a problem. They supplied us a letter from the IRS showing that the organization had notified the IRS about the problem and that the IRS was working on it. This was a large organization, which had passed Charity Check for years.
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We do the same as Johanna in checking the IRS website and asking for their exemption letter. Like so many other things this past year, there was a greater delay in organizations being able to get their tax exempt status, but I heard recently that it is picking back up again. As a suggestion, I try to do the charity check shortly after an organization begins their application so that they don't waste a lot of time if they aren't eligible or they have time to follow up on their exemption application. As a side note, we are able to grant to school districts, churches, and governmental agencies but they won't usually pass the charity check.
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Thank you for your comments and advice!
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If I get an invalid or failed result from CSuite I usually go into GLM from there and keep digging. Sometimes its an easy fix by digging more in GLM. However, if not, I will then try good old Google and see if the organization has a "donate" tab where the EIN is sometimes listed or where you can find the bigger "umbrella" org info. From there, I contact the organization and have a conversation about needing to send them a donation and what I need in order to do so. I do that extra step to ensure the money goes where the donor wishes it to instead of a general pot for the main org. Arms of government and churches are exempt so I don't pursue those very far. We have one DA fund that distributes to many Buddhist organizations across the country and I've been deep down in some rabbit holes with that.
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