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How To Select A Charity

How To Vet A Charity

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Before giving, it is advisable to check how well the charity does its job. If you are giving to a large charity, a quick and easy way to learn about the reality of the charity is to look at ratings from one or more of the following:

  • Candid offsite link (a combination of Guidestar and Foundation Center)
  • The American Institute of Philanthropy at offsite link
  • The Better Business Bureau's Wise Giving Alliance at offsite link
  • Charity Navigato offsite linkr (ratings include effectiveness of day-to-day operations ; ability to sustain programs over time, accountability and transparency)

You can learn about local charities through the local Better Business Bureaus at offsite link. Click on "for charities and donors." Look for the bureau nearest the charity that you are interested in donating to.

If you do your own research, look at the following:

  • The organization's mission, and whether it advances values that you consider to be important.
  • Whether you agree with the charity's programs.
  • The group's finances:
    • How much does the charity spend on administrative overhead and fund raising? The less the charity spends on these expenses, the more money will be available for worthwhile programs. Better charities spend an average of only 23% of their budget on overhead and fund-raising, although that can vary dramatically depending on the type of charity and how they raise their funds. For example, if the charity only passes money through to other charities, the overhead should be much less. To learn what is reasonable for a particular type of charity, compare organizations with similar missions.
    • Does it pay employees too much? You can see a survey of the top 20 salaries in the nonprofit world at
    • How does the charity spend its remaining dollars?
    • Whether there is a reserve fund to keep the charity going in the event of an economic downturn.
    • Does the charity have positive or negative amount of assets. If negative, your donation may go to paying off debts rather than for helping in the cause.
    • Consider whether the charity's investments are sound. While it is difficult to learn the specifics of a charity's investments, you can check whether the charity has an independent investing committee.
    • You can access financial information about many charities at such sites as:
  • The organization's board of directors, staff, and other individuals involved in a position of leadership. If you can, find out:
    • How long they've been with the organization.
    • How high the rate of employee turnover is in the organization.
  • The kind of evaluations the charity does to determine whether the dollars it is spending or its programs are being effective. If the charity does evaluations of its programs, you can ask for a copy or summary of the evaluation report. The charity may consider this information confidential, but it can't hurt to ask.
  • Whether the group is tax-exempt so that your contributions will be deductible from your income taxes. When in doubt, ask for a copy of the IRS document certifying their tax-exempt status. (Many charities include a copy of the document on their web site). If the group doesn't have the letter available, check,,id=96136,00.html offsite link. Click on "Search Now."

To check an organization's non-profit status, go to offsite link.

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