August 14, 2010; Source: Star-News | How nice to see a regional paper devote a long article to helping small donors understand the forms and documents they might inspect to determine whether a nonprofit deserves that $100 or $200 donation. This piece from Wilmington, N.C.’s Star-News walks readers through 990s, audited financials, un-audited statements of income and expenses, and other standard information.

The 990 of the United Way of the Cape Fear Area serves as the guinea pig for the 990 analysis, Cape Fear Memorial Foundation (a health conversion foundation) talk about what they look for in audited financials, and a Landfall Foundation grants committee person (maximum grant of $6,000 per group) addresses what to look for in small nonprofits.

The author suggests that these tools will help a donor “be sure the nonprofit he’s supporting is being run efficiently and accomplishing its goals.” Actually, these financial documents only provide clues for questioning and investigation, which most small donors and probably most large donors don’t generally do. At least this article avoids for the most part the bias in most similar pieces toward established organizations with purportedly solid long-term futures.

It includes small and smaller organizations, including an all-volunteer children’s theater group called Stageworks, so small it says that it doesn’t even file a 990. One hopes Stageworks remembered to send in its 990-N e-postcard, but at least the Star-News tells you that you should have to be fearful of small nonprofits if you know what to look for and ask about.—Rick Cohen