Fraud Tip of the Day - December 6

How to evaluate charities

Before making a donation to charity, evaluate their financial health and determine how much of your donation directly supports the charities programs and services.

Have you ever wondered how much of your charitable donation is used to pay administrative or fundraising fee and how much ends up supporting the program or service you are donating to? No one wants their money going to waste and there have been many reports in the media about phony charities and fraud.

Even when the charity is legitimate they may pay their professional fundraisers so much money that a significant portion of your donation is eaten up by administrative costs, fees and employee payrolls. If you're like me you want to help the sick or poor and would rather not pay for telemarketers to make cold calls requesting donations. The question is, how do you know if the charity you intend to donate to runs lean and mean fundraisers or if it has a lot of overhead that will consume your donation?

Fortunately, there are organizations that track charities and rank them according to their financial health. They rank them using several criteria such as overhead, ratings, efficiency and just about everything you need to guide you in your decision making process. You can even find financial statements, policies, program leadership, mission statements and contact information. I was surprised at just how much was at my fingertips. You no longer have to hope your money makes it into the hands of the needy. You know if it does or not.

Websites Devoted to Charitable Giving

Below are some of the websites that have tremendous resources related to charitable giving:

• Charity Navigator - America's premier independent charity evaluator, works to advance a more efficient and responsive philanthropic marketplace by evaluating the financial health of America's largest charities.
  
  http://www.charitynavigator.org/
  
  
• Charity Guide - Ratings for nationally known charities broken down by category.
  
  http://www.charityguide.org/
  
  
• American Institure of Philanthropy - The American Institute of Philanthropy (AIP) is a nationally prominent charity watchdog service whose purpose is to help donors make informed giving decisions.
  
  http://www.charitywatch.org/
  
  
• Give.org - BBB Wise Giving Alliance. The Alliance reports on nationally soliciting charitable organizations that are the subject of donor inquiries. These reports include an evaluation of the subject charity in relation to the voluntary BBB charity standards.
  
  http://www.give.org/

These are only a few of the resources available to those wishing to conduct research before making a donation. There are many other useful websites and organizations dedicated to this cause. Just remember that if a charity isn't listed or rated by one of the services it does not imply a poor evaluation or rating. It could be that no one has had an opportunity to look into that charity yet.