A A

Make sure your donation counts

Before you give, check out how charitable organizations are rated by the watchdogs

Consumer Reports Money Adviser: December 2012

Charitable giving often comes to mind this time of year. The holidays might have you thinking about the less fortunate, or charitable donations might be part of your year-end tax strategy. Whatever the reason, make sure the group you choose will put your money to good use and not spend it on big salaries for its executives or huge payments to professional fundraisers.

The easiest way to research national charities is with the three major charity watchdogs: Charity Navigator, CharityWatch, and the BBB Wise Giving Alliance. They rate charities based on how they spend their money, protect donor privacy, govern themselves, and more. Some have tools to sort and search for organizations and reviews. They use somewhat different criteria and don't always agree, so check out a charity with all three groups. Only CharityWatch requires a donation for full access, although it provides useful information without one.

Generally the three watchdog groups don't rate religious organizations, although you might find some listed, especially if they solicit money from the general public.

Figuring out which small, local charities deserve your support is tougher because many aren't rated by the watchdogs. Regional BBBs have evaluated about 10,000 local groups; the reports are available through the Wise Giving Alliance.

One option is to give through a fundraising federation, such as the United Way, which screens groups for you. You can evaluate a charity yourself by looking at its annual report, audited financial statement, and IRS Form 990, which includes, among other things, the salaries of the group's highest paid employees. You might find those documents on an organization's website, or you can ask the charity to send them to you. (If it refuses, give elsewhere.)

Some additional advice:

Verify tax-exempt status. Don't assume that your donations are tax-deductible. Confirm a group's tax-exempt status by going to irs.gov and searching for "exempt organizations select check."
Give directly. If you're contacted by a professional fundraiser for a charity you want to support, give directly instead. Fundraisers often take 40 percent to 80 percent of the proceeds. In some cases, charities get nothing, or they can end up paying fundraisers more than they take in, leaving them with a loss.
Request privacy. If you don't want to be bothered by endless fundraising appeals, tell groups you support that you don't want your name and contact information to be sold to other nonprofits. You can also ask the groups not to send you further appeal letters or e-mail. Check the charity's privacy policy before giving.
Be on guard for soundalikes. Some low-rated charities have names that resemble those of high-rated ones. For example, there's the low-rated Parkinson Research Foundation of Sarasota, Fla., and the high-rated Parkinson's Disease Foundation of New York. Be sure you're giving to the right group by carefully checking the name and address.

Charities put to the test

The high and low ratings for the groups here are based on evaluations by the major charity watchdogs. We looked for agreement among all three, though some that were only rated by two are included. Note: If a group did not respond to a request for information from the BBB Wise Giving Alliance, we counted that as a negative mark even though the BBB did not rate it.

Cause	High-rated	Low-rated
Animal welfare	Animal Welfare Institute, Washington, D.C. PetSmart Charities, Phoenix	Noah’s Lost Ark, Berlin Center, Ohio SPCA International, New York
Blindness	Guide Dog Foundation for the Blind, Smithtown, N.Y. National Federation of the Blind, Baltimore	American Council of the Blind, Arlington, Va. Heritage for the Blind, Brooklyn, N.Y.
Cancer	Breast Cancer Research Foundation, New York Multiple Myeloma Research Foundation, Norwalk, Conn.	American Breast Cancer Foundation, Baltimore Walker Cancer Research Institute, Aberdeen, Md.
Health	National Kidney Foundation, New York Parkinson’s Disease Foundation, New York	National Emergency Medicine Association, Edgewood, Md. Parkinson Research Foundation, Sarasota, Fla.
International relief	Doctors Without Borders USA, New York Episcopal Relief & Development, New York	Dakota Indian Foundation, Chamberlain, S.D. Shiloh International Ministries, La Verne, Calif.
Veterans and military	Homes for Our Troops, Taunton, Mass. National Military Family Association, Alexandria, Va.	Disabled Veterans National Foundation, Washington, D.C. Help Hospitalized Veterans, Winchester, Calif.
Youth welfare	Big Brothers Big Sisters of America, Philadelphia Scholarship America, Minneapolis	Caring for Our Children Foundation, Everett, Wash. Committee for Missing Children, Lawrenceville, Ga.