As more Americans donate to charity, there can be some skepticism as to if hard-earned dollars are efficiently allocated to grow a charitable cause or if those funds are being used for other purposes that we are unaware of. With this in mind, it is actually quite important to do some research about a new or existing charity you are donating to in order to gain a better understanding of the organizational body’s functions, primary message and their financial operations which allow them to run their philanthropic tasks.
In terms of numbers, American households gave around $335 billion in 2013, the fourth straight year of gains, according to the latest research from Giving USA Foundation and its research partner and the Indiana University Lilly Family School of Philanthropy. As a result of the overall increase of Americans donating to charity continuing to grow, this number is only expected to rise within the next few years.
In terms of charitable giving across various types of households, most of charity’s revenue came from individuals, with more than $241 billion coming from nine of out of ten households.
A fundamental tool to help you choose a charity or philanthropic organization to donate to is CharityWatch, which analyzes IRS filings, audited financial statements and potential donors to provide their readers with the most accurate results. Earning an A rating from CharityWatch is quite difficult, with most of these top rated charities or organizations efficiently utilizing their budget on the charitable work with a very minimal percentage focused on other activities such as fundraising, expenses, etc.
To illustrate an A earning charity, Doctors Without Borders is an organizational body that spends around 87 percent of its budget on programs and only $12 to raise $100, thus further underlining the philanthropic body’s productivity.
If you’re looking for an alternate source to evaluate whether or not your charity is efficiently using their financial resources to the best of their ability, another fundamental reference to use is Guidestar. Similar to CharityWatch, Guidestar provides free access to IRS Forms 990 and annual reports so that donors can access how charities are operating on a large scale framework in terms of finances.
In relation to underrepresented charities, one area that seems to be under the radar for many donors are charitable causes within the area of education. Luckily, in recent years, individuals and households alike have started to donate more to education-related to charities that offer charities, learning programs and various other forms of support that place more emphasis on the students.
For more information on how to choose a charity, please take a look at this link.