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Charity Evaluation: Expert Tips on How to Evaluate Charities
Every once in a while, a big charity makes big news—and not the good kind. “Charity WeDoGood has been accused of mishandling millions of dollars ….” And the nightmare begins—especially if you’ve just donated!


HOW TO DONATE WISELY
One way to find wise-spending charities is to consult a watchdog site such as Charity Navigator or the Better Business Bureau Wise Giving Alliance. But if they don’t list your chosen organization, take a look at its Form 990, a tax return, suggests Sandra Miniutti, vice president of marketing for Charity Navigator.

A charity must provide you with its three most recent Form 990s, Miniutti says, but its “willingness to send the documents is a good way to assess its commitment to transparency.” (Exceptions are certain religious organizations that aren’t required to file the document.) GuideStar's information database allows you to download them.


HOW TO READ A FORM 990

Focus on page one, which breaks down the spending, Miniutti suggests. The organization should use “less than 10 percent of their budget on fundraising costs, less than 15 percent on administrative costs and at least 75 percent on the programs and services they exist to provide.” If it doesn’t, call and ask why.


DEALING WITH CONTROVERSIAL ISSUES

Do you support embryonic stem-cell research? Animal testing? Abortion? Universal health care? Do you know if your charity does?

"A well-run charity is always eager to answer questions from its donors," says Miniutti. Though you probably won't find support of controversial issues splashed across those "please donate" letters, a little digging should reveal just where your money's going. "Charities that are unable or refuse to articulate this information should be avoided," Miniutti says.

Visit the Web site; request the annual report; read the newsletters, she recommends. You can also ask if the group has a position statement on an issue that concerns you.

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Last updated and/or approved: August 2010.
Original article appeared in two parts in January/February and March/April former print magazine. Bio current as of those issues. This health-care information is not meant as individual advice. Please see our disclaimer.
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