Research Before You Donate: A Quick Guide to Charity Research

If you are anything like me, then you enjoy opportunities to give back to our communities or to give to those who are less fortunate.  Charity can be an awesome, amazing experience for everyone involved, but charity also has a dark, unfortunate side to it as well. In this post, I want to take a few minutes to talk with everyone about how to ensure that you are giving to reputable charities so that you can make the most out of your charitable giving by ensuring that the bulk of your giving is going to directly impact the cause you are donating to, and not going toward paying for the CEO's new vacation home.

Why is this important?

There are numerous reputable charities in the US and around the world who work tirelessly to fulfill their stated goal and improve the lives of people suffering with illnesses or disabilities. Unfortunately, there are also numerous charities out there who are more than willing to take your donations and use them to pad the salaries of the people running the charities rather than spend the money actually benefiting their cause. 

Telling the good charities from the bad charities is not always an easy task. Most of these less reputable charities spend a considerable amount of money hiring professional solicitors who know how to sell you on their charity and make you believe that you are giving to a worthy cause. So, what are some ways that you can ensure that you are donating to reputable charities, and not giving your hard-earned money away to crooks and scams?

Research! Research! Research!

The best way to ensure that your charitable donations are going to reputable organizations is to research a charity before you donate to it. It may sound simple, but there are a lot of people who do not take the time to do this, either because they are pressured into an immediate donation or because they do not know how to ,or even that they should, research charities before donating.

Whenever I am presented with an opportunity to donate to a charity, I always make sure to first research that charity. You can find a lot of great, independent charity research sites on the internet that track the revenues and expenses of charities and present the data in free reports that users can use to make decisions on whether or not to support that charity.

The two resources that I trust and use the most are CharityWatch.org and CharityNavigator.org.

I highly recommend that you always look up a charity on these sites before you donate to them to see what percentage of their donations are actually being spent fulfilling the need that the charity says it represents.

In addition to utilizing these resources, I would also recommend that you look for any news articles regarding the charity. When considering news articles in your research, you should take into account that the news media isn't always 100% accurate. Focus your news media research on local news sites, as they are typically more reliable than the mainstream news media sites.

Don't be pressured into an immediate donation

Sometimes when you are contacted by a charity for a donation, they will attempt to get you to commit to and immediately pay for a donation right then and there using your credit card. This is usually a sign that the charity you are dealing with is less than reputable. You should never agree to honor a commitment over the phone using your credit card and instead you should ask that they please send you an invoice to allow you to pay using a check.

As an example of why this is important, let's look at a charity that recently contacted me for a donation via telephone. In this example, I was contacted by the Firefighters Charitable Foundation via telephone. After telling them that I would be happy to donate to their cause, the solicitor transferred the call over to their billing department to collect my payment.

When the billing department picked up to collect my payment, instead of giving them my credit card information, I asked that they please mail me a statement so that I can instead pay using a check. Remember, NEVER give them a credit card number, cash, your social security number or your bank account information. You should ALWAYS ask that they send you a statement or invoice so that you can pay with a check. You can also ask that they send you any information that they have on their program and where the donated are being spent. In addition to protecting yourself from fraud, doing this will give you time to research the organization before you give.

Upon receiving the statement from the Firefighters Charitable Foundation, I looked them up on CharityNavigator and found this:

Here, you can see that Charity Navigator has given them an overall score of 28.86 out of 100, with a "0" for their Financial Rating and and "89" for their Accountability and Transparency. So, I wanted to know why their financial score was so low, so I scrolled through the report and found out why:

As you can see, only 7% of the charity's expenses are spent on the programs and services that it delivers. That means, for every $1 that you donate, only $0.07 actually goes toward benefiting the cause of the charity. For this charity, an astounding 87.7% of the total expenses are related to fundraising. This means that for every $1 you give them, they will use $0.87 to pay for more fundraising! You are essentially paying these people to raise funds, not to help firefighters and burn victims.

In addition to the negative report from Charity Navigator, I was also able to find that the charity appeared on the Tampa Bay Times' list of America's Worst Charities.

And, as if that wasn't enough, I was even able to find a quote from the charity's president where he even admitted that donating to his charity is not the best use of a patron's funds.

After finding all of this, I drafted a short letter letting the charity know that I would not be donating, and stating my reasons why. I also printed out, and attached, the Charity Navigator report and mailed it to the charity, instructing them to never contact me again. Instead, I will be donating to the Firehouse Subs Public Safety Foundation, an organization with a 94% overall rating, where $0.91 of every $1 spent goes toward their cause.

Conclusion

I hope you've found this helpful and will be able to put this information into practice the next time you are approached for a charitable donation to ensure that your money is being put to good use and not funding some fat cat's retirement.

If you want to find more information on charity, charitable giving, how to choose good charities and how to protect yourself, I would highly recommend that you check out Clark Howard's Charity Guide. Clark and his team are an incredibly valuable resource for consumers on a wide variety of topics and I cannot recommend his advice and expertise more!

Thank you all and remember, if you liked this or found it helpful please upvote and follow!