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Charity comparison: Where does your money go?

Make a charity comparison so you can be assured that your giving makes the impact you want it to make.

Make a Charity Comparison so You Can Be Assured That Your Giving Makes the Impact You Want It to Make

Not all non-profits and charitable institutions are created equal. Some stick to local-only causes, giving back in ways that you can probably see in your own community. Some have a national reach and are able to contribute to efforts across the country or even around the globe.

In whatever manner you decide to give back, you may be curious about how your efforts and your dollars will be put into action and how to know if a charity is legit. Can the organization explain its short- and long-term goals, quantify its current progress and demonstrate a track record of success? Is it well-managed and transparent? You can find answers to all these questions so you can have more confidence in where does charity money go. Here are some key questions to ask in your charity comparison.

Is Your Donation Tax-Deductible?

The organization must be a qualified non-profit for you to get the write-off.

Where to find the answer: Use the searchable IRS database to discover a charity’s tax status.

Can Someone Answer Your Questions?

A membership coordinator, the president of the organization, a communications expert: If you’re curious and have key questions, someone should be able to talk with you about the organization.

What to do: Write down what you want to know, from effectiveness statistics to future goals, and ask to speak with a staff person.

Are There Any Complaints?

Records may include everything from the mundane to more serious issues, such as budgetary irregularities.

What to do: Check the Better Business Bureau National Charity Index.

What Information Can You Find Online?

If a charity doesn't publish a report or can't back up its claims with actual statistics, that could be a red flag.

What to do: Dig into an organization’s website for mission statements and annual reports and search for keywords such as outcome and impact, which may offer insights into the charity's efficacy.

What Do Unbiased Sources Say, Especially About How Funds Are Utilized?

A good rule of thumb is that a charity should have at least 70 percent of monies go toward their cause and 30 percent or less should go toward the cost of doing business (administration, fundraising, marketing, etc.).

What to do: Several online resources have already done the homework for you and offer a variety of rankings and information.

  • Charity Navigator prominently lists the percentage of a charity's budget that is spent on overhead.
  • Charity Watch features lists of charities organized by cause, so it’s easy to find new organizations as well as a list of high-asset organizations that may have a wealth of funding for years or decades to come.
  • GuideStar offers resources for donors, nonprofits and grant-givers.
  • GiveWell fully vets organizations worldwide that work to alleviate global poverty and increase global health. Only eight made their hand-picked list of top charities for 2018, with another eight organizations on their stand-out list.

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