With the end of the year near, we are all thinking of ways to use our time and money to support meaningful charitable causes. No matter which philanthropic cause moves you to give, you want to feel completely confident that your donation will make an impact and benefit an organization that is legitimate, accountable and worthy.
How can you ensure that your next donation goes to a trustworthy nonprofit? We engaged Sandra Miniutti, the VP of marketing for the independent charity watchdog organization Charity Navigator, to get some answers.
Tell us about Charity Navigator.
We’ve developed an objective methodology that enables us to rate all different types of charities. Our system is designed so that an individual analyst’s subjective opinion can’t influence a charity’s rating with us. Our system is designed so that a charity cannot opt out of being rated by Charity Navigator. We can provide a richer analysis if a charity is willing to participate in the evaluation process.
What’s the best way to use Charity Navigator to make a better giving decision?
- Confirm that the organization is a bona fide charity, or a 501(c)(3) public charity. If an organization has this designation, your gift to the charity is eligible for a tax deduction.
- Review the Charity Navigator rating for that charity. We rate charities on a 0- to 4-star scale with 4 stars being the highest rating.
- Support charities with 3 or 4 stars. If you find a charity you like with a 2-star rating, call to learn more about what’s going on with the organization and what its plans are to improve.
- Do not support 1-star or 0-star charities. Look for another charity that does similar work with a higher Charity Navigator rating.
- If the charity is on the Donor Advisory list, take the time to read about why we’ve placed it on that list. Consider pausing your donations to the organization until it resolves the issues at hand.
- If a charity is public but has not yet been rated by Charity Navigator, follow the steps we provide to conduct your own review of the charity before you donate.
What should donors know about HelpHOPELive?
Donors to HelpHOPELive should feel confident that they are supporting an efficient and ethical charity. HelpHOPELive has earned 13 consecutive 4-star ratings from Charity Navigator, and is nationally ranked in the Top 1 % of all charities evaluated. View the ratings here.
What does Charity Navigator consider to help inform donors?
Our rating system examines two broad areas of a charity’s performance: Financial Health and Accountability & Transparency. Our ratings show givers how efficiently we believe a charity will use their support today, how well it has sustained its programs and services over time, and its level of commitment to good governance, best practices and openness with information. In the not-too-distant future, we also plan to rate charities’ reporting of their Charity Navigator results.
Why is it important to find out more about a nonprofit before you donate?
While the number of charities has grown to over 1 million, the level of funding flowing into the nonprofit sector hasn’t grown at a comparable rate.
As such, it is every donor’s responsibility to ensure that their dollars are going to efficient, effective and ethical charities. We can’t afford to have precious resources wasted on ineffective or fraudulent organizations if we want to tackle the world’s most pressing problems.
What are some of the warning sings that a nonprofit may not be a good choice to receive a donation?
There are several red flags that include, but are not limited to:
Organizations that spend very little on their charitable mission. The 8,000 charities that we rate tend to be larger, established charities. The vast majority spend at least 75% of their budget on their programs and services (HelpHOPELive spends more than 88% on programs and services). That percentage may run legitimately lower for a new or small charity or one that is intentionally investing in its infrastructure. But if the percentage is significantly lower, we would encourage a donor to ask questions or look elsewhere before making a contribution. Our rating system gives zero points for that metric to charities that spend less than 50% of their budget on their mission.
Organizations that do not have a diverse board of directors providing oversight. In our rating system, we look for each charity to maintain at least five independent, voting board members. Avoid charities where, for example, the CEO is reporting solely to family members. That can open the door to unethical behavior.
Organizations that use high pressure techniques to solicit donations. Well-run charities are willing and eager to share information about their work and they will not try to pressure you to give on the spot as you are learning about their mission.
How can we get started right now searching for worthwhile causes to support?
Go to charitynavigator.org and look for the Charity Search box. Type in the name of the charity, or search by keyword or location.
Share this post with family members and friends who want to make a positive difference this holiday season or throughout the year