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Charitable giving: The right match
Find the specific charities that best fit your giving goals.
December 22, 2004: 1:13 PM EST
By Penelope Wang, MONEY Magazine

NEW YORK (MONEY Magazine) - Once you've identified the causes that matter most to you, find the specific charities that best fit your giving goals.

Going online is a quick way to sift through the hordes. You can search for charities by cause at Web sites like Guidestar.org and Networkforgood.org.

If you prefer to give close to home, you can get information about local charities from community foundations, which are nonprofit organizations that support area causes. You can find one near you at communityfoundations.net.

With a few names in mind, you'll then want to get a handle on how wisely these charities spend money to support their mission. You don't want to give to a group that squanders donations on administrative or fund-raising expenses.

In a 2003 survey of charity telemarketing campaigns, New York State attorney general Eliot Spitzer found that on average less than a third of the money raised went to the groups -- the rest was siphoned off by telemarketing and campaign costs.

That comes as no surprise to Ruth Robbins, 65, a retired scheduling analyst in Pataskala, Ohio, and her husband Alan Hewett, 55, a computer programmer and chemist.

Says Ruth, "We never respond to telephone contacts, and we're really annoyed by phone calls from charities we already support."

The couple, who donate 15 percent of their income to charity, prefer to research groups to support on their own, often via the Internet. "We like to know where our money is going," Robbins says. "It's a big help to see the information online."

You can scrutinize the financial details (including tax returns) for nearly 300,000 charities at guidestar.org. Or you can rely on watchdog groups to do the analysis for you. Sites like Charitywatch.org and Charitynavigator.org rate charities on how well they use the money they raise. Give.org, the philanthropic arm of the Better Business Bureau, looks at finances as well as governance issues, such as whether the charity has independent directors on its board.

Each of these watchdog groups has different criteria, but as a rough guideline, a charity earns the highest rating if at least 60 percent of the money it spends goes to its programs and no more than 35 percent to fund raising or other administrative costs.

Many top charities do better, devoting 80 percent or more of the money they spend to their cause. But the financials don't tell you how well a charity is performing its mission -- say, the number of people a homeless shelter has served or how many studies a cancer research group has funded.

Also bear in mind that there are sometimes good reasons for a charity's numbers to fall below these standards. Start-ups, for example, may have to spend more on fund raising in order to build name recognition, while groups that depend on loads of small contributions may have higher marketing costs than those funded by a few big donors.

Still, if a charity's numbers seem troubling and you have no easy way to check the situation further, move on. There are many other worthy causes; no doubt you'll find one of them.

Next: Consider the impact »  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.