essays & effluvia: Checking on Charity

Saturday, December 15, 2007

Checking on Charity

There are lots of weak charities that do a poor job of putting your donated money to work.

A few resources to help make sure your donations are well used:

CharityNavigator.org, provided by the nonprofit group Charity Navigator in Mahwah, N.J., rates more than 5,000 U.S.-based charities, using information in their Form 990s. The site is free to people who register.

For an idea of how the rankings work, consider the group's take on United Way of America. The charity, which is based in Alexandria, Va., gets three stars out of four for "Efficiency," in part because 90% of its budget went to programs, and it cost only two cents for the program to raise a dollar.

The organization also gets three stars of four for "Capacity," or its ability to sustain itself over time. The group had annualized revenue growth of 21% from 2002 through 2005 and had enough working capital to operate for about eight months without any income.

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GuideStar.org: If you want to look at the raw data, GuideStar.org is the go-to organization for copies of a charity's Form 990. It covers 1.7 million groups and has about 3.1 million Form 990 images, many of which are available free to people who register.

The site makes money from a combination of donations and subscriber fees, so not all of the content is free. For instance, a prospective donor can see that the March of Dimes Foundation wanted to continue a $75 million education, awareness and research campaign on premature birth in 2006, and that it has more than 1,000 employees.

To get other details, such as the charity's income and assets, you need a subscription. That will run either $30 or $100 a month, depending on the depth of information you want and other factors.

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Give.org, operated by the BBB Wise Giving Alliance in Arlington, Va., reports on whether the approximately 1,200 charities it has evaluated meet the alliance's 20 "Standards for Charitable Accountability." It doesn't do ratings or rankings.

The group's free reports provide information on who runs a charity and list its income, expenses, assets and sources of income. The reports also describe the group's programs; in some cases, this includes a breakdown of how much the group spent on them.