Is the Money You Donate to Charity Going to the Cause, or into the Administrator's Pockets?

A Guide to Evaluating Charities Using Online Resources

The Holiday season is upon us and many of us are in the giving spirit. Each year Americans donate thousands to their favorite charities during the holiday season.

Be aware that there are many scams run in the name of charity. Even in a legitimate charity as much as 50% (sometimes even more) of your donation may not go to the cause itself, but towards the administrative costs of the organization. For these reasons, it is important to make an informed decision when selecting a charity.

Luckily, there are free resources available on the Internet to help you determine how much of your donated dollar goes towards administration and other non-cause related expenses. This article examines three such resources: Charity Navigator (http://charitynavigator.org), Give.org (www.give.org), and the American Institute of Philanthropy (www.charitywatch.org).

Charity Navigator

There is a wealth of information at this site, which is itself a 501 (c) (3) non-profit organization. This site evaluates charities according to their financial health, organizational efficiency, and organizational capacity. The information is based on the IRS Form 990 that each charity is required to submit to the IRS each year.

The site is free, and most features are available to the general public. A few features require you to become a registered user (at no charge).

The site allows you to search for evaluations for specific charities by name, by category, or even by ratings. Once you have opened the evaluation of a particular charity you will see an overall rating and figures for the percentages that go to the program itself and to administration and fundraising. The page compares the charity’s efficiency to the efficiency of other charities with a similar mission, lists the most recent income statement of the charity, and the name and salary of the leader of the charity.

The site also contains tips for donors and various other resources. This site was easy to use and understand. I found it to be extremely helpful.

Give.org