Select Page

If you give to many charitable organizations, you probably want to be sure that your money is going where the charity says it will be going. Unfortunately, if you don’t check out the places that you are donating to, you might not entirely know. Your donation dollars can be lost in administrative costs or even out-right fraud, if you’re not careful. Fortunately, there are also ways that you can better know and understand who it is that you are giving to and how much of your money is spent on the advertised charity.

To check to see if your charity is legitimate, you should check out the list on the IRS website. Did you know that, in order to be considered a legitimate charitable organization, they must be registered with the IRS? If you receive a mailer asking you to give to an organization that isn’t listed on the IRS website, be very wary. There are scams that will play on people’s goodwill.

While there are scammers that you must be aware of when considering a charitable organization, there are also plenty of organizations that are legitimate, but they don’t actually manage their money well. Just like a for-profit business, there is overhead to any non-profit. Although many organizations rely on volunteers for many jobs, many times they need employees who also need to be paid. There might also be costs in renting office space and doing marketing. So, it’s reasonable for a non-profit to have some of their donations go to administrative costs. But you probably don’t want 80% of your donation going there. Rather, you want your money helping the people and research that you thought it would be helping.

You can find out how much of your donation will be going to administrative costs by checking a couple of websites. Try Charity Navigator and Guidestar, which both can tell you exactly where your money will be going. Some charities have found ways to be incredibly lean, but about 30% or less on operating costs shows that the organization is managing their donations appropriately.

There are plenty of worthy organizations available for you to donate to, but you must research carefully. When you’re feeling generous, it’s easy to give your donation money to organizations that pull at your heartstrings, but if you are not careful, organizations that mismanage, or outright scams, can pull away from the benefit of your good intentions.