1. Choose a critical problem to solve and look for organizations that tackle that problem.
Instead of focusing on a specific organization, consider starting by thinking broadly about what problem is facing your community that you want to be part of the solution. Starting with the list of strong Nonprofits that meet 27 Accountability Standards (located online at smartgivers.org), look for organizations that want to solve the same problem that you do. These organizations have committed themselves to working hard to build a firm and solid foundation that includes accountability, transparency, good governance and public disclosure; that foundation allows them to focus on advancing their missions.
Remember, just because you give to a "tax-exempt" organization does not always mean your donation is tax deductible. Generally, gifts to a charity registered with the IRS as 501(c)(3) organization are tax deductible and contributions to most other types of organizations are not.
3. Research how the organization will use your donation.
Homework is easy now that you can find information on mission, financial health, and impact online. Overhead is an important investment made to improve their work. Things like training, planning, evaluation, and internal systems. Overhead ratio is one data point to consider but doesn't tell the whole story. Focus on the organizations performance by looking at transparency, governance, leadership, and results. If you have questions or don't find what you're looking for, ask! Strong nonprofits always welcome all questions from donors.
4. Does the organization strive to reflect its community?
An organization that reflects the community it serves is one that includes its constituents at all levels: on the board, on staff and in its volunteer workforce. Organizations who are led by and for stakeholder groups often have stronger social capital and healthier ties to that community. That means they'll have strong outcomes in their work.
5. Look for risk-taking and out-of-the-box solutions.
Nonprofits today are tasked with a huge challenge: serve more people with less money. Donors who care about those challenges should invest their dollars into charities who innovate. The willingness to take creative risks is the difference we need in finding new solutions to the problems we've faced since the dawn of humanity. It's up to this generation of donors to change the world, for good.
Check out all organizations Meeting Standards here, and some additional tips and guides for giving during the holiday season below:
Charity Navigator’s 2013 Holiday Giving Guide
Just Give’s Holiday Gift Guide
Slate’s The Cynic’s Guide to Holiday Donations