Q. What's Foolanthropy?

A. Foolanthropy (n): The form of charity advocated and practiced by The Motley Fool.

When evaluating charitable organizations to support, it applies the following five tenets:

1. Does the organization offer a long-term, sustainable solution to a social problem as opposed to a Band-Aid? We tend to favor charities that have programs that encourage self-sustaining solutions -- enabling people to get out of poverty for good, for instance, or helping to rebuild areas that have been destroyed by recent natural or man-made disasters.

2. Are its finances transparent and sound? We conduct due diligence on our charities, and we expect them to have sound financials. The management team should have the background needed to run the organization, for instance, and the board of directors should have qualified experts, not just celebrities or major donors. We also look at financials, with an eye toward excessive overhead, egregious CEO compensation, and any other red flags that point to a lack of stability within the organization.

3. Is the charity small enough for our support to make a difference, yet established and broad-minded enough that we can be certain of its reputation, effectiveness, and appeal? We like to know that we're making a real difference in a charity's ability to operate effectively, but we also want to make sure we choose organizations that are established and that have broad appeal to as many Fool as possible.

4. Do our readers support it? Our system of nomination is democratic. Simply log on to our discussion board and nominate a charity, and make the best case you can for why we should support it. Unless you nominate it, we won't consider it. We try to be fair in assessing reader support for each charity before weighing each with our own due diligence.

5. And finally, does it educate, amuse, and enrich? As with everything we do at the Fool, we like to have fun while we educate and enrich. Is the charity innovative in its approach to problem-solving, or working in a unique way that merits enthusiasm and attention? If it is, it's probably a good candidate.

Learn more about our annual Foolanthropy charity drive, where we're raising money together for some very worthwhile causes.