A guide to finding the right charity

We’re moved to express our gratitude to those in need and those who have made a positive impact on our community. And many times, we feel the urge to do something that goes beyond a spoken “thank you.”

For some, that involves volunteerism and service of their own. For many others it involves donating to a charity that supports and encourages heroes right in the community.

But how can someone know if a charity or an organization is a good investment? A rise in less-than-ethical organizations (and sob stories that go viral on social media) means that donors need to be extra careful that their dollars are actually going to help those in need.

There are three simple steps to begin this process, explains Sandra Miniutti, vice president of marketing for the charity-rating firm Charity Navigator.

First, examine the charity’s finances.

“Financially healthy organizations – those that are both financially efficient and sustainable – have greater flexibility and freedom to pursue their charitable mission,” Miniutti says Second, ensure the charity is accountable and transparent. “Charities that are an open book and follow good governance practices are less likely to engage in unethical or irresponsible activities,” Miniutti says.

Finally, look for signs of effectiveness. A charity exists to make a difference, so make sure you find evidence of its impact.

“Donors should look at the charity’s programs and services,” Miniutti explains. “You want to look for evidence that the charity is bringing about the change in the world that it exists to accomplish. Heartwarming stories are a great way to inspire donors to engage with the cause, but they should be backed up with data that shows how the charity is delivering on its promises.”

Often, this can be as easy as visiting the charity’s website to read an annual report or seeing if it has published an impact report.

“If you can’t find that information, then give the charity a call and ask about its goals, accomplishments and challenges,” Miniutti says. “Good charities are eager to have these types of conversations with potential donors.”

When it comes to how to give, Miniutti notes that cash donations are nearly always preferred. “If you do want to donate used goods, make sure it is something the charity actually can use,” she says. Charity Navigator recommends that you consider selling your goods and then donating the proceeds instead. If you are certain that your non-cash items are going to be useful, try to donate locally to avoid any transportation costs.

When it comes to cash donations, trust that the charity will know best how to spend your donation. “If you’ve take the time to research a charity, then trust it to spend your donation appropriately,” Miniutti says. Unrestricted donations give the charity the flexibility it needs to respond to changing demands for its services and to spend the money where it is most needed to continue their day-to-day good work.

After giving, it’s important to follow up with your charities of choice annually to check on their financial health, accountability, transparency and impact.

“You don’t want an itemized receipt for how they spent your donation, but you want to ensure they are still a high-performing charity worthy of your trust and support,” Miniutti says.

Don’t hesitate to follow up with the charity directly if you notice something has changed. They might have a reasonable explanation, for example, for why they’ve recently spent more on fundraising or why they’ve changed their programs.

Miniutti notes that she’s seen some “bad apples” over the years clustered around causes that support our troops. “I think this is because we’re much more likely to give from the heart and not stop to vet a charity that wants to help our local or military heroes,” she says. “In fact, we recommend that the public not donate over the phone to these (or really any) causes.”

Why? Often these charities have hired forprofit telemarketers to call you and those firms are keeping a large portion of your gift. Both Charity Navigator and Consumer Reports maintain “best of” and “worst of” lists. Be sure to thoroughly investigate – and then you can rest easy knowing that your donation is going to a worthy cause.