If you’re interested in giving to charity, you might find yourself having difficulty navigating the thousands and thousands of options available. You’re probably not sure which ones are legitimate, or what most of them do.
We’ve got a quick overview on how to understand that, as well as a list of some of America’s worst charities to give to, and what makes them so bad.
What is a Charity?
A charitable institution is a company or group used to assist people, animals, or other causes that cannot fund themselves by personal direct income. They receive funding through charitable donations, which are free-will gifts from people who won’t directly benefit from the gifts given.
Charities can include any number of causes, but some of the most common include:
- Abuse survivors
- Religious/faith-based groups
- Rescue animals
- Schools
- Hospitals
- Homeless shelters
- Soup kitchens
- Food banks
- Disaster victims
- Medical missions
- Dental missions
- Social services
- Youth programs
- Job training
- Other underprivileged care
How to Determine a Good Charity from a Bad Charity
There are two major factors to consider for which charities to give to.
1. Fundraising Efficiency
One of the key figures to look at as you investigate charities is their efficiency in fundraising. Some groups spend more money on fundraising annually than they actually use to aid people. Look for the ratio of pennies spent to dollars raised. Forbes Magazine considers anything under 70% efficiency to be less than beneficial.
2. Charitable Commitment
One of the biggest concerns with a charity is how much of the donations go to the actual intended recipients. Overhead costs, fundraising costs, and a few other things are legitimate for charities to spend some of the donations on. However, if a group is giving less than 65% of the donations to the actual cause that cause should be viewed with caution and probably avoided.
Tools for Helping You Find the Right Charity to Give To
There are a number of sites designed for helping donors determine the legitimacy of a given charity. Each of these databases or sites uses various critical information to asses the worthiness of a charity. Some of these sites include:
- Charity Navigator
- Guidestar
- Charity Watch
- BBB Wise Giving Alliance
- IRS Non-Profit Charities Database
Tips for Donors
Because there are a lot of scams out there, you should take a few precautions as you make donations.
- Never give your credit card or other payment information to a group that calls you. If the group calling is someone you’re interested in considering giving to, tell them you’ll call the official organization number yourself. If they argue with you, feel free to hang up.
- Trust your gut about donations. If you feel something is a little off, don’t give.
- Charities have overhead and administration costs to pay. If a group claims that they use 100% of the donations away without paying expenses, you should investigate the group before donating.
- Avoid donating via text. While it may seem convenient, it’s very easy for scammers to obtain legitimate-looking texting options.
- Consider donating time or goods instead of cash. Doing so may protect your bank account, and if the organization is legitimate, it will provide those in need with items of use.
Which are the Worst Charities to Give to?
Unfortunately, some of America’s worst charities include some of the more well-known ones that supposedly care for legitimate needs like care for veterans, treatment for diseases, and help for underprivileged kids. Some bad charities include:
1. Foundation for American Veterans
This particular charity declines publishing information, so that groups like the Better Business Bureau can determine how much they give. However, Charity Navigator reports that the Foundation for American Veterans gives only six cents of every dollar raised to actually help veterans.
2. Kids Wish Network
According Charity Navigator, less than 25% of funds donated are used to actually support and run the programs that Kids Wish Network claims it’s funding. The majority of the remaining money goes to fundraising and liabilities to assets.
3. Cancer Fund of America
This organization was so riddled with fraudulent activity that it had to put itself out of business. Good charity alternatives that receive high ratings include the Cancer Wellness Center of Illinois and the National Ovarian Cancer Coalition.
4. The American Breast Cancer Foundation
Charity Navigator only gives the American Breast Cancer Foundation one star out of five, for its benefits actually given to the intended recipients. They use less than 50% of their donations to fund the research and treatment of breast cancer, and spend significant amounts on administration and fundraising.
Guard Your Giving
Before you give a penny to any charity, make sure you know where those donations are going. If you don’t care that your hard-earned gift is going to line some executive’s pockets, then don’t worry about it. If, however, you want to make a real difference through your generosity, use a site like Charity Navigator or the IRS Non-Profit Charities Database to determine where your gifts will be going.