How can I better understand charity finances?

How can I better understand charity finances?

Understanding charity finances involves looking at their income sources, expenses, and financial reports. What specific aspect are you interested in?

I'm curious about how charities report their financials.

Charities typically report their financials through annual reports and IRS Form 990. These documents provide insights into their revenue, expenses, and overall financial health.

What should I look for in their financial reports?

Look for transparency in income sources, the percentage of funds spent on programs versus administrative costs, and any significant changes in revenue or expenses.

Are there any red flags I should be aware of?

Yes, red flags include high administrative costs, inconsistent revenue streams, and lack of transparency in reporting. Always research thoroughly.