How do I evaluate a charity before making a donation?

You want to do more and give more to a charity, but finding one you can believe in and trust should be a challenge. Here are five tips to help you find your cause.

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  • Before parting with your hard-earned money, you should know a little bit about the organization you’ll be supporting and how they will use the money.

  • Be cautious, however. Remember that Mother Teresa was often criticized for the way she did her work. Many criticisms of charities are leveled by uninformed peopled.

  • There may be no more heinous theft than a scammer taking money in the name of charity. The following resources can help you separate authentic charities from scams:

    1. Charity Navigator. Charity Navigator is itself a 501(c)(3) charity, meaning that donations to it are tax deductible. It provides a directory of charities and rates each charity on a variety of scores, allowing you to determine whether or not you’d like to contribute to a particular charity. It even posts the charity’s financial statements. Charity Navigator does not accept donations from the charities it evaluates.

    2. GuideStar is also a 501(c)(3) charity that evaluates and reports on other charities. Its data is shared broadly through the media and on some other web sites, including causes.com. Some information is only available if you purchase a $125 premium report.

    3. State Regulators. Most states feature Web tools and directories that will help you validate a charity registered in the state. New Jersey, for instance, has a site that allows you to do a quick search by name and offers up a list of the top 10 queries as well.

    4. Better Business Bureau. The BBB, as it is often called, maintains a database of businesses that includes charities. If they don’t have a record of a charity, that isn’t a good sign, but that doesn’t mean you shouldn’t donate. It could be a perfectly good, new charity. The BBB charges a fee for businesses to register; many charities do not. Complaints leveled against charities will show up whether or not the charity is registered.

    5. Snopes. Snopes is a favorite site for people who receive — but likely don’t send a lot of email forwards. Most emails that get forwarded around the world over and over again, including sappy pleas for money for a friend of a friend, are bogus. The best place to go to find out if the pathetic photo and sad story making the rounds today is legitimate is to go to Snopes, copy and paste a sentence from the email into the search box and you’ll instantly be presented with a fact checked version of the story. Almost always the story is false, misleading or at least exaggerated. This is also a great place to find out if it is really true that blondes will be extinct within a few generations.

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  • Using these resources, you should be able to readily determine if a charity is legitimate. If the charity is new or very small, it may not be in these databases but it may be legitimate. If there are no complaints with state regulators or the BBB, you may wish to use your good judgment and proceed with caution.

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Devin Thorpe, husband, father, author of Your Mark On The World and a popular guest speaker, is a Forbes Contributor. Building on a twenty-five year career in finance and entrepreneurship that included $500 million in completed transactions, he now champions social good full time, seeking to help others succeed in their efforts to make the world a better place.

Website: http://www.yourmarkontheworld.com

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