How do I find out if the charity or fund I want to sponsor is legit?

Question

I've read articles saying that some very elite charities have been known to have people in it who were pocketing most of the money. If I'm going to sponsor a charity or cause I want to make sure than my donation goes to the right people, so how can I make sure of it?

Answer 1

www.grants.gov is complicated but will work for you if you can figure it out :) try

Answer 2

Unless you are trained in accounting and can read through the bs that most charities put out there, most of the other answerers suggestions won't help you at all.

There are a few organizations that rate charities based on their financials and if they do what they say they will with the money. Here is the one that I use most.

www.charitynavigator.org

Secondly, I saw a few people that say 65% of funds collected being used for charity is good, THAT is awful! I will not give to any charity where less than 80% of my money goes directly to the cause. And the best charities will even allow you to specify if your donation can be used for administrative expenses at all.

Lastly, you really have to be careful as many "scam" charities operate under very similar names to legit ones. Disabled American Vets have a false charity that operates out of the same city they do. Upon doing my research I found this other similarly named charity is actually a bar, and the money they "donated" to another charity, was found to go to the same people, just operating under different names. For the year I reviewed their financials, I found that only $500 went to a charitable cause, but nearly $100,000 went to salary and expenses for the directors.

Give, but give wisely.

Answer 3

You are asking two different questions at the same time.

A "legit" charity is one that is registered as a tax-exempt organization under Section 501(c)(3) of Internal Revenue Code. A charity can be "legit" and still spend a lot of money on itself rather than on its programs.

If you want to make sure that your donation actually goes to the programs, not to office overhead, you'd have to request and read the charity's financial reports. They should contain detailed information about how much money is spent on actual programs vs. administrative expenses and be audited by a reputable accounting firm.

Answer 4

501(c)3 is a classification that makes an organization a tax-exempt (meaning they do not pay tax) entity, but does not prove they are above board!

The opposite is often true. People give to these organizations, but never question what the CEO or even the receptionist, for that matter, earn. Some of these people will make more money in a year than you will see in ten years.

Don't be deceived. A first class organization will have a financial statement that you can gain access to on line or by asking. Look this over and you will know exactly how the funds are spent.

Hope this helps.

Answer 5

I live in the state of Michigan. Several years ago I tried to find out if my favorite charities are legit. I ended up talking to someone at the state's attorney general office. I was told anyone can get a fereral tax ID# and start a charity. I was also told there are no watch dog agencies to follow up and make sure these are legitimate.
I found out that many charities have names that are "close to" the name of a legit charity. Example: American Cancer Association(not society).
I decided to give my monies to local charities and old stand-bys like the Salvation Army,The Shriners, St Judes, St Vincent DePaul, my local shelter,Girl/Boy Scouts. Etc. You get the picture. Not only do you know ALL of your money goes to the charity, but most of these stay in your local area.

Answer 6

The best way is to ask for a copy of their tax return - they should be able to give you a copy of their form 990 or 990 EZ or 990 A (the 501 (c)(3) tax form like the personal tax forms 1040, 1040 EZ or 1040 A). That would have most of the information on it. Also, find out if you can obtain a copy of their articles of incorporation.

Somebody else mentioned checking with the United Way - that's another great suggestion. Depending on the mission of the charity, there are other "super" organizations that you might check with - if the charity deals with health related issues, there's one called Combined Health Appeal, for example.

Answer 7

1. Check with the Better Business Bureau
2. Ask to see the most recent report from the charity showing how their funds are distributed. If most or even half of it goes for administrative costs, you may not want to invest in that so-called charity. The big names are usually trustworthy, but there, too, you are right to ask for their budget report(s).
3. Check the Internet sites of the charities you want to explore. You can learn a lot about an organization that way. However, I still recommend items 1 and 2 first and foremost.
4. Bless you for your care and caution!

Answer 8

Volunteer for a few different charties that you may find appealing. See first hand and feel it. You will soon know if this is where you want to put your hard earned money.
I have my favorites American Heart Association, is good.. Special Olympics is great. Especially if you volunteer and become a coach. But, remember if you do this, you must KNOW the Village People's version of the YMCA. And last but not lest giving our old clothes and things that we no longer want or need give to the Veterans. Its helps some of them feel worthwhile after coming home maimed and rejected by their disabilities. Within in the realm of working in a smaller place where their wheelchairs and lack of limbs is not the focal point.
Just volunteer and you will soon learn who you want to support and yes, you will find some that you will NOT support. For your statement is true. Some are just plain old rip offs.
Good luck and enjoy yourself volunteering. It can be very rewarding. Especially the Special Olympics. If there is not a chapter in your community contact them and start one. Its fun, its healthy and you are giving something money can not buy. Your time and it will bring many smiles and cherished memories to you.

Answer 9

By being selective about which charities you choose to donate to. You can certainly check with the Better Business Bureau, and by calling the Attorney General's Office (they usually have a good idea of which charities are legit and which ones aren't).

All charities should have annual reports ~ Legitimate charities are more than willing to let you see a copy of the report which should tell you how much is going to salaries, office expenses, and so forth.

I personally only donate to local charities which are staffed by volunteers and operate on a shoe string budget ~ food banks, soup kitchen, food pantries, crisis centers and shelter homes usually have the greatest need.

Answer 10

Some people have problems with charities spending money on "administration." Many of these people don't realize that "administration" includes essential expenses that keep charities running properly, such as office rent and the salaries of certain employees.

Examples of employees who salaries are usually categorized as "administration" include receptionist, bookkeeper, payroll administrator, human resources administrator, and IT manager. Sure, a charity could reduce its administrative expenses by terminating these employees, but would that help or hinder the organization? And would their cause be helped or hindered if the organization had to get by without these employees?

Some charities categorize these employees' salaries and other administrative expenses as "program" expenses in order to make it seem that they spend very little on administration. The IRS would need to audit the specific charity to uncover the misclassification, which doesn't happen very often.

Just as you should be suspicious charities that spend half of their expenses on administration, you should also be suspicious of charities who spend almost nothing on administration.

Answer 11

after 9/11 and Katrina, alot of ppl were asking themselves the same question. while 9/11 taught us that not even the Red Cross is above a little white lie to get help for its normally completely honest and forthwright operations(not hating on the Red Cross by any means here), it also brought about a good site that resurfaced during Katrina. it's called www.give.org. they are the charity arm of the BBB,and publish which charities are most likely to spend your money as they say they will,and the ones who have violated the "charitable code of ethics" for some reason or another. imho, this is one of *the* best sites you can go to to find out if a charity is on the up and up. good luck,and thanks for sharing and caring!! p.s., the ppl who said experience is a good way are also correct. my other advice to you would be to go w/charities that haven't had much scandal(there are always complainers that claim some charity cheated them) attached to their names,and that you've heard of.