How to Find a Charity Worthy of Your Donation
Make Charitable Giving an Investment, Not a Guess
Donating time or money to charitable causes is an essential part of many Americans’ lives. Giving allows us to help organizations that positively impact the world, it gives us a feel-good factor, and can even provide some donors with a tax deduction.
But with well over a million IRS-registered charities in the U.S., giving can be a confusing and sometimes frustrating process. How do you know that charity is doing a good job? Could that fundraising call be a scam? Can I be sure that this charity is approved by the IRS? How do I know which charity is doing the best job of addressing a particular issue?
Informed Giving Is Effective Giving
Fortunately, there is an increasing number of third-party organizations that can help sort through the turmoil of the nonprofit world. Some of these vetting and rating organizations specialize in particular types of charities, such as international or poverty. Others stick to charities of a certain size, while a few deal with a narrow bandwidth of organizations.
Think of your charitable giving as an investment in creating a better world. You wouldn’t invest in a company if you didn’t have confidence in that company’s ability to create value.
Use these resources to find the charities you care about and that you can trust.
If you are interested in giving to a charity working in the field of international aid and global health, GiveWell is an excellent resource.
GiveWell is dedicated to using data to find outstanding giving opportunities. It publishes the full details of its analysis to help donors decide where to give. They recommend just a few charities that they deem highly capable and likely to benefit from additional funding. Their choices tend to concentrate on global health issues.
Philanthropedia crowdsources research on nonprofits by surveying experts like foundation professionals, researchers, and senior nonprofit staff.
Using the advice of these experts, Philanthropedia has created lists of "verified, financially responsible charities." These organizations work on a variety of international, national, and local causes, including international disaster relief, arts and culture, violence against women, and climate change.
Charity Navigator has rated more than 9,000 of America’s largest charities regarding financial health and accountability and transparency.
You can use their searchable database to find a nonprofit that matches your passion or browse their top ten lists, or their list of 4-star rated charities to get a sense of what’s out there. New ratings are added each month, so check back if you don’t find what you’re looking for right away.
Charity Navigator is perfect to find a new charity to add to your philanthropic portfolio or to determine whether one on your list is doing a good job.
Be aware, though, that Charity Navigator's list is not all-inclusive. You may not find your favorite local charity listed. It doesn't mean that charity is not a good one.
CharityWatch is a project of the American Institute of Philanthropy (AIP) that grades charities on their effectiveness.
The criteria used to determine a charity’s grade include what portion of total expenses is spent on charitable programs, how much is spent to raise each $100 of funds collected, and how long a charity with large reserves of available assets could continue to operate at current levels without any additional fundraising.
CharityWatch also publishes a periodical, the Charity Rating Guide & Watchdog Report.
Universal Giving connects people to volunteer and giving opportunities worldwide by ranking charities according to a trademarked Quality Model that includes Patriot Act compliance, financial vetting, management review, nonprofit status verification, and several other criteria.
Universal Giving allows you to sort volunteer and giving opportunities by continent or by type of project, which makes it easy to focus your giving on a particular cause or a specific part of the world.
Bright Funds most resembles an investment fund. You can choose a particular basket of causes for your donations. The fund makes it easy to support the causes you care about, and all the charities have been vetted for you,
Bright Funds has used data from all of the above resources to build high-impact funds of nonprofits working in six target areas: the environment, education, water, poverty, health, and human rights. Bright Funds makes it easy to support the most effective organizations focused on the issues that matter most to you.
The design of your portfolio is fully customizable—for example, you could put 40 percent of your portfolio in water, 30 percent in education, 20 percent in health, and so on.
And if you want to add a charity, not in Bright Funds’ pre-built funds to your portfolio, you can add any 501c3 registered nonprofit in the United States. The single platform for giving to multiple charities also allows you to get a single tax report for all your donations.