Do Your Homework on Your Favorite Charity with Charity Navigator

by Scott Sery on October 22, 2013

Charity NavigatorOctober is breast cancer awareness month.  This crippling disease hits home to many people throughout the world.  By dedicating an entire month to being aware, people can learn to spot the early warning signs, and it lets them know that there are many ways that they can help.  For those who may have been affected by cancer, they often turn to donating to charities involved in research to help prevent and cure the disease.  Unfortunately, what happens too often is that they end up getting scammed.

Not All Charities Are As Good As They Seem

There are millions of charities and non-profit groups out there.  Each one is begging for money, and each one has a plea for help.  Many of them are fantastic.  They raise money for a cause, and they push as much money as possible to that cause.  They are truly philanthropic.  But there are some that do not really help those they claim to be fighting for.  In fact, the top 50 worst charities spend less than 4% of the money they bring in on the people they claim to be helping.  This means that for every $1,000 they raise, only $40 goes toward what they want you to believe they are funding.  The rest goes to line the pockets of the founders, pay for-profit companies to run the fundraising, and toward other “administrative” expenses.  In order to protect yourself, and make sure your money is going where you think it is going, do a little homework before donating to any charity.

Finding information on your favorite charity should not be hard.  Since all non-profit organizations are required to make their financial data public information, you can see any and all tax returns that you want.  But that is a lot of work to dig through all that information.  So instead of wasting your time, let someone else do the work for you.  Head over to Charity Navigator where you can find out all the information that you need.

How to Use Charity Navigator

Navigating around the Navigator is pretty easy.  At first glance, there is a lot going on with the site.  But you can ignore most of it for now, and if you want to you can go back later, read their blog and explore.  Right in front of the homepage is a bar and a prompt “Charity Search.”  You can enter the name of the charity you are searching, or some keywords, such as “breast cancer.”  The results will be a list that you can sort by name, ranking, city or state.  A quick look at each result will tell you how much money goes to program expenses (this is where you want the bulk of the money to go), how much goes toward admin costs, and how much goes to fundraising and various other expenses.  There is a lot of information for each organization, and how deep you want to dig is up to you.

Remember that there are several ways for you to make a donation aside from just cash. Sites like Boat Angel allow you to donate a used boat to charity. This option may not be for everyone, but if you have an older boat taking up space in the garage and you also feel like helping out a number of great causes, then you owe it to yourself to look into this unique type of charity. The donation can even be used as a tax write-off, so it is a win-win situation no matter how you approach it.

Final Thought

There are so many charities vying for our money, and it can be hard to say no all the time.  Saying no is especially hard when some of those doing their fundraising are really good at their jobs.  You end up feeling like a total jerk if you don’t “help out the kids with terminal illnesses.”  But we know that the best way to not get scammed is to do plenty of research.  So before you write your next check, look at their profile on Charity Navigator.  You might be pleasantly surprised, or you might want to cancel your contributions.

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Scott Sery

Scott Sery is a native to Billings, Montana. Within an hour in nearly any direction he can be found fishing, hunting, backpacking, caving, and rock or ice climbing. With an extensive knowledge of the finance and insurance world, Scott loves to write personal finance articles. When not talking money, he enjoys passing on his knowledge of the back country, or how to live sustainably. You can learn more about Scott on his website Sery Content Development
  • Ben_WealthGospel

    Solid post. It’s also interesting to see how much the CEO of each charity makes. If you want to make half a million a year, don’t do it at the expense of the people you’re supposedly trying to help.

    • Exactly. It’s really sad that people feel that is ok to do.

    • Scott Sery

      Half a million is a bit outrageous, however, $250k is not. People often forget that the CEO’s are highly talented, if you only want to pay $50k you will only get $50k worth of talent. Meaning the highly paid CEO’s often bring in more money, save more money, and provide better service via their extensive network and management skills than one that is lower paid. Not always true, but that is often why CEO’s are paid more than people feel they should be.

  • I realized this when I started looking into charities to donate to after hurricane sandy. It’s sad how often the misfortune of others is used to make a buck. Luckily, the charity I’m running the marathon with is well rated!

  • Done by Forty

    Thanks for providing this resource. We are starting to give more and a governance solution, to check on the effectiveness and trustworthiness of a charity, will be a great help.

  • Yesterday I went to one of the charity here to donate a little help for the Philippines earthquake victims. It’s really good to know that I saw some of my friends also extended their help.

  • Financial Advisor Maryland

    Some time i donate money in charity.After donating i always feel very good feelings in my mind.

    financial advisor Maryland

  • Mike GetRichWithMe

    Its very sad that some people use charities, and people with charitable intentions to basically provide them with an income first, and do charitable work second.
    Your site you mention is great at exposing this, and which charities to avoid

  • Is this affiliated with Guidestar? Guidestar is another great way to find out information on your favorite charity. If ever an organization is trying to get me to donate, the first thing I try to do is look up their tax ID on Guidstar to ensure they’re at least recognized by the US Government as a legitimate charity.

  • Laurie @thefrugalfarmer

    LOVE Charity Navigator, Scott. We’ve used them in the past and will definitely use them again. I love giving away my money to a good cause, but it’s important to know what exactly that “good cause” plans on doing with your hard-earned dough, at least for me.

    • It’s really sad that we actually need to vet a charity, but you’re right, it feels awesome to give to a good cause.

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