Charity Rating Websites
These are the most common and easy to use resources. Charity Navigator, Better Business Bureau’s Give Wise, and Charity Watch are organizations that use their own variety of criteria to rate or grade large charities.
Charity Navigator: The largest and most well-known of the three. They predominantly use financial information and IRS filings to determine how a charity is spending its donations and if they are financially stable. A potential downside to their ratings system is that their ratings use the previous seven years of data. This can negatively skew the ratings of younger charities or make them difficult to find.
BBB’s Give Wise: A respected evaluator of businesses has taken their expertise to the non-profit space. Give Wise utilizes 20 standards across 4 areas: Governance and Oversight, Effectiveness, Finances, and Solicitations and Informational Materials. They then determine if the charity meets each of the standards and provides an explanation for their conclusion.
Charity Watch: Although the smallest of the three, Charity Watch claims to utilize the strictest standards for evaluating charities. This resource can be useful if you would like to learn more about the largest charities in the nation, but most of their ratings can only be accessed by purchasing an annual $50 membership.
This website can be used to confirm the proper mailing address for your desired charity and ensure that they are a tax-exempt organization. If you really want to overachieve, you can download your charity’s Form 990 and conduct your own analysis of the charity’s financials. The Form 990 has information on their principal officer, employee salaries, total revenue, and more related to how their funds are raised and distributed.
The Charity’s Website
Charities want to make it as easy as possible for you to learn about them and donate to their cause. Therefore, a lot of information can be gleaned from their “About” and “Donate” sections. Many larger charities post their annual and financial reports which you can use to learn about previous initiatives, goals, and fundraising levels. These can normally be found in sections titled “Publications”, “Resources”, or “Governance”. In the “Donate” section, you can make a gift online or confirm how to address check gifts. Many websites also allow you to automate a monthly gift to the charity.
A great way to understand how the interworkings of your selected charity is to get involved. Activities such as speaking with your local chapter leadership, helping with fundraising efforts, or planning an event will help you understand the organizational structure, how money is spent, and more about how effective that charity is.
It is no surprise that sharing your wealth and time with causes you support can be an incredibly rewarding endeavor. However, we should always ensure that our generosity is not abused. I hope with some of the tips I’ve shared, you can be an educated “giver” and trust that your designated charity is above board. As always, if you would like to know more about how charitable giving fits into your financial plan, please do not hesitate to contact us.