Sad puppy eyes are staring out at you from your television screen, begging for help. An emotional song is playing in the background, and the commercial is tugging at your heart strings. A phone number is flashing on the screen, prompting you to call and make a donation right away that could save the poor dogs. You want to pick up the phone and give some money to the organization, but you hesitate. How do you know which charities to avoid?
As you probably know, there are so many ways to be taken advantage of financially, because there are many frauds and scams out there that are directed at seniors. You’ve worked long and hard for your money, so the last thing you want to do is give it away for no real purpose. The best way to protect yourself is to read up on the best and worst charities.
Of course, you don’t want to avoid all charities – individual donors like yourself donate far more money to charities than foundations and corporations combined.
Over the years, several researchers have compiled lists that show the best and worst charities to donate to in the U.S. For example, there are even long term operations out there that pose as charities and solicit money, but they are actually scams. They sound like legitimate organizations, with names such as Children’s Cancer Fund of America or The Veterans Fund.
So how do you know if the charity you’ve been donating to for years is not one of the charities to avoid?
4 Tips You Can Follow to Figure out which Charities to Avoid:
1. Follow your heart
First, pick a charity that you believe in, whether it be a local organization looking to improve your community or a national organization, such as the American Cancer Society, that has a local chapter. Then, go to the organization and volunteer. By volunteering, you can see how things operate internally before you keep blindly giving up your dollars to the cause. If you’re unable to volunteer, at least check out the website and read independent reviews and evaluations on the organization.
2. Do a little digging
There are websites out there that identify charities to avoid. Some of them are GuideStar, CharityNavigator and CharityWatch. These websites will give you an overview of a charity’s financial health and budget breakdown. Now you’re probably thinking – how do I know what I’m looking for? A charity, on average, spends about 75 percent of its budget on programs, so look for a charity with a budget in that ballpark.
3. Measure impact
What kind of impact does the charity have on people’s lives? Charities that can’t prove their impact on society are charities to avoid. GiveWell is a website that does research on charities and their impact, so you can see the best and worst charities to donate to.
The last way you can verify that a charity is legitimate is to check that it is a tax-exempt organization. All tax-exempt organizations have to be registered with the Internal Revenue Service, and then they all should have a tax form called Form 990.