Finding a Legitimate Charity

People donate to charities between Thanksgiving and Christmas more than any other time of the year. Some charities actually spend more time soliciting during that month, because they know people are more inclined to give. Unfortunately, this is the time of year when charitable giving scams are also on the rise. That doesn’t mean you shouldn’t give. It just means you should do your homework first.

Charity Navigator is a good place to start. This organization assesses the financial health of more charities than any organization in the country. It uses an unbiased, numbers-based system to rate charities on how efficiently they function daily, as well as what they’ve done to sustain themselves long-term. Every charity it has ever evaluated is rated on the website, and you can donate to any of these charities through the Charity Navigator website. That’s more than 5,000 of the largest charities in America.

With a million charities across the country, you obviously won’t find all of them on this website. You can, however, find all kinds of information about charitable giving, possible scams and tips on finding a charity for the cause you wish to support. It also tells what information to ask for if a charity solicits you for a donation, and it provides tips that make you think before you open your wallet.

For example, this time of year, some charities will advertise in the newspaper, send solicitations by mail or even erect billboards asking you to help them feed the hungry. Advertising is not cheap, and there’s a good chance that a large part your donation could be paying some of those costs. Do you want to support a charity that feeds people or one that advertises that it feeds people?

To be a wise donor, Charity Navigator recommends looking at three different things: financial performance, governance/accountability and results. Financially healthy organizations have more flexibility to pursue their goals, which means your money pays for what you want it to pay for. Charities that follow good governance practices are less likely to use your donation for unethical purposes. Charities with results demonstrate they are using donations for their intended purposes. Charity Navigator’s ratings provide financial performance, and data regarding accountability is available for 1,000 different charities on its website. Results should be obtainable from an individual charity’s website or literature.

Charities will tug at our emotions to get us to open our wallets. We have to resist that temptation until we’re positive this is where we want our money to go. Check Charity Navigator before making a donation. If the charity is not listed there, ask for the organization’s website and annual report. If they cannot provide any kind of proof they exist or have accomplished something, you may want to send your money elsewhere.

Most importantly, never give someone your credit card number over the phone or by mail if you haven’t initiated the call or do not have a history with them. If that information gets into the wrong hands of one person, you can spend years repairing your credit and your good name.

This holiday season and throughout the year, give what you can, and always give wisely.