Give Thanks the Smart Way: How to Check a Charity is Legit | brokeGIRLrich
During the holiday season, charitable giving increases. Whether it’s the warm and gooey feeling of helping others or the season of tax write-off prep, either way it’s nice to know that when you’re giving money to an organization they’re going to use it the right way.
What’s the right way?
Personally, when I give money to somewhere like the Red Cross, I want to know that money is going to help whatever disaster is happening in some other country. I don’t want it all going to office supplies and their CEO’s salary.
So how can you find out if your charity is legit?
A website that is great for double checking any charity you’re interested in contributing to is Charity Navigator.
To use Charity Navigator, enter the organization you’re researching (so for our example we’ll check out the Red Cross – especially since I encouraged donating to them back during Typhoon Yolanda, which, by the way, they are STILL rebuilding from).
Charity Navigator gives them 3 out of 4 stars. From there you can scroll down and read about how transparent and accountable the company is and details about the previous year’s financial statements.
I look for charities with very small administrative and fundraising costs. The Red Cross is a pretty good charity on this front – the vast majority of their income goes into program costs.
Another website called Charity Watch also ranks charities and gives them a letter grade, but their website is harder to navigate and doesn’t lay out information about the charities very clearly.
Still thinking about giving but not sure exactly where you want to give that money?
The American Red Cross is honestly a pretty impressive organization. If you’re looking for a tax write off or want to spread a little holiday cheer through a charity that has no real drama or religious ties associated with it, they are a good choice.
If you’re low on cash and still would love to help this holiday season, the Red Cross also organizes blood drives, so you not only help folks in need, you usually get a free cookie and/or juice.
Personally… I’d rather give cash than let them put a needle in me.
One I have supported for years that does have a strong religious affiliation is Compassion International (which actually scores higher than the Red Cross on Charity Navigator). If Jesus isn’t your scene, you may want to go with a different organization, but if you’re pro-God or even indifferent to the whole religion thing, the way they manage their funds to help children in developing countries is awesome. It also gives you a unique opportunity to sponsor a specific child and actually get to know them as they grow up.
I also have a soft spot for charities that are doing great things without taking any money from the government. You go, Compassion International!
As you do Mel, I double check to see where my donation is going. When and if I get solicitor calling me I always ask the person calling, “Can you me what % of my donation goes to the charity and what % goes to admin fees?” The typical response is silence or stuttering. I usually don’t get called again.
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Haha, I bet. I’ve never thought to actually ask someone that when they’re in front of me or on the phone asking for money.
I have never heard of Charity Navigator, but it sounds awesome! It is amazing how many scams are out there operating under the impression that they are truly a charity. For me, I typically give to smaller organizations that I know have low overhead and give directly to the causes that they support. There is nothing worse than giving money only to realize that 70% goes to overhead and salaries of CEOs.
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I definitely agree. I give to one charity that isn’t listed on Charity Navigator, but it was founded by a friend of an old professor and I really trust what they’re doing.
On the flip side, some surprisingly large and popular charities ARE giving most of their money to administrative costs, which is heartbreaking and wasteful.
I always review the financial reports disclosed by charities to view their operating expenses, admin fees, salaries etc…then again I worked as a credit analyst for years so I can’t help it. When I lived in Canada, I consistently supported the Canadian Red Cross and I now support the American Red Cross on a monthly basis. We also pledge monthly to the ASPCA because I really have a soft spot for animal welfare.
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The Red Cross does so many amazing things throughout the world, it really is a great organization.
People are so greedy and I also believe its very important to verify that you are contributing to a legit charity. Apart from occasionally giving money in passing while out in about to homeless people, I never give to a charity without doing some research. I have never heard of this website so I will keep it in mind. It might save me some extra clicks and time. Thanks.
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I agree. Some of them barely get anything done – and with a few minutes of research, you could’ve been giving money to a charity with the same cause that actually IS making the most of your donation.
I actually gave a speech about this recently to my Toastmasters group, and I was surprised to learn how little people knew of Charity Navigator! I am a big fan of their site, and I try to dig up as much info on their taxes as I can too… probably more than the average person does, haha. I just like to make sure my money is getting to the right people, as I’ve seen (or heard) of some shady charities out there. 🙁 Not cool!
Thanks for the info!
We for the most part give through our church and also regularly to United Way. Then some smaller contributions to the Arbor Society and Dumb Friends League to help the animals. I am always leery donating to a solicited request because of scams or high cost (less than charitable) organizations. I have never heard of Charity Navigator and will have to check it out. Thanks for sharing the info.
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Thanks Mel for this great information! I have used Charity Watch in the past, but am thrilled there is a more user friendly option with Charity Navigator! In years past, we primarily gave through our church and community but now living in England we don’t have the strong community connections so most of our giving is online. This resource will definitely come in handy! Thank you! 🙂
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Ooh thanks for this! I’m a firm believer in researching a charity before donating because giving blindly sometimes hurts more than not giving at all, in my opinion. I just searched my favorite charities and I’m relieved they’re all 3 or 4 stars.
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