Doing the MOST Good: What to Look for when Choosing Charities

Choosing Charities

Donating to charity seems like a straightforward proposition. You pick a non-profit that does work you support, and you give them some money, household goods, or time. It should be simple, but these days with social media, awareness campaigns, and so, so many charities to choose from, how do you know what’s really being done with your money? How do you select organizations that can do the most with your gift?

A Mission that Matches: When you find an organization that you might like to support with your money, goods, or time, do some digging. Check their mission statement and website “about us” section, and run an internet search. Get a good picture of what the organization stands for, what they do with the money they raise, and evaluate that against your personal beliefs and what you want your money to go toward.

The Non-Financial: If I “like” an organization on Facebook or follow them on Twitter or another social media platform, I become a statistic that benefits the charity because they can use their number of followers as proof that they have community support. Likewise, if you donate time at a non-profit, they probably track the volunteer hours, as we do at the history museum where I work. This is so they can prove community support for their mission. This is good, be part of that show of strength! I know some volunteers don’t want personal recognition, so they don’t always track the time they put in, but that accounting isn’t just so we can spoil our volunteers. The charities you support on social media or with volunteering take those statistics to big corporate donors, use them on grant applications, and show their boards and supporters just how many people believe in what they do. Every supporter matters, even if you don’t have money to give. Follow your favorite organizations on Facebook, and make sure you track your volunteer hours. Social media likes and recorded volunteer hours do have value to charities, in an indirect way.

I would be remiss if I didn’t give a shout out to all the volunteers. Small organizations like my museum rely on volunteer involvement. You are so much more than just that statistic. You, in many ways, keep the doors open at small organizations and make the large-scale work of the big guys possible. It is not my intention to belittle the work of volunteers and their very direct and important contribution. I just want to make sure you understand that your time tracking has a value too.

Raising Awareness: Remember last year when the ALS “Ice Bucket Challenge” went viral? ALS is a disease most people only vaguely knew of because of its association with Lou Gehrig. Dumping some ice on your head does not help a single person, but the viral nature of the campaign actually led to an increase in donations, public awareness, and the spread of accurate information.

Awareness campaigns have their value. But they require something the public can really latch on to and promote at little to no cost to the charitable organization, like the ice bucket challenge. Television and print ads can have that same knowledge and donation generating power, but they are very expensive. Beware of organizations that use donations to advertise for more donations. While they may be doing great work, they’re limiting themselves by spending a lot of the donated money on expensive TV time. I’m not saying it’s always bad, sometimes the TV time is donated, but just be aware.

My other issue with awareness campaigns is charities that raise funds for the express purpose of raising awareness. If I have to choose between an organization that uses my money to raise awareness of childhood hunger and one that uses my money to fight childhood hunger, I’m going with the active over the passive every time.

Beware the Middle Man: Some organizations exist solely as a funnel to collect donations and hand them out to many charities. Some of these sub-organizations may be groups you personally don’t want to support. And every time your dollar changes hands, some of it disappears to pay for staff, marketing, etc. Your dollar goes a lot further when you donate it right to the organization doing the work you believe in. But I know how it is, some people are “strongly encouraged” to donate to the big funnel through their employers. Good news: you can usually specify where they send your contribution. The middle man pennies still disappear, but at least you can control who gets your gift while satisfying your employer.

So we’ve covered some of the things to watch out for, but how do you know? You’re going to have to do a little research. 501(c)(3) is the Internal Revenue Service’s designation for a non-profit organization, and donations made to 501(c)(3) charities are tax deductible. If you aren’t sure about an organization’s charity tax status, ask. With that designation come certain responsibilities. Charities have to file a form 990 with the IRS every year. You can see these tax forms on GuideStar. Comparing an organization’s annual report to their 990 will give you a good picture of what they do with your money.

To me, that’s a lot of work. If I were donating big bucks maybe I would put that kind of time into picking apart a charity’s financials – or pay my financial advisor to do the digging… But math isn’t my thing, and I don’t have that kind of time. Fortunately, other sites have done some of the analysis work for us. Charity Navigator, Charity Watch, and the BBB Wise Giving Alliance are some of the evaluators out there who rate charities. You can see their criteria on their websites and then see how your favorite organizations stack up. Religious organizations and small local charities may not be included in their evaluations. Ministry Watch exists to evaluate religious non-profits, but I’m not familiar enough with them to give an endorsement for or against their work.

In digging for information for this blog post, the following resources were helpful to me. If you would like to dig deeper into choosing charities that do the most good, please read:

Consumer Reports article, “How is Your Favorite Charity Rated by Watchdogs?”

GuideStar article, “GuideStar offers Advice on Evaluating Charities’ Effectiveness”

New York Times article, “How to Choose a Charity Wisely,”

Wall Street Journal article, “Evaluating the Charity Evaluators”

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