Beware of Bogus Charities

Television commercials, magazine ads, mass mailings, and telemarketing calls are flooded nowadays with people asking for donations to worthwhile-sounding charities, many of which you’ve probably never heard of. But when you’re approached by an organization with a name that sounds sympathetic and caring, the idea of being a good samaritan tends to pull at the heartstrings because most people have a natural instinct to offer a helping hand to people less fortunate.

Unfortunately, there are plenty of unscrupulous predators who prey on those instincts to collect money that will pad their own pockets without ever reaching any child. Sometimes the problem lies in greedy administrators or boards of directors who don’t know what they’re doing, but often the problem is because of inefficiency or disorganization. Which means most of your money goes toward things like accounting and legal services, administrative salaried, liability insurance, and investments, not the programs you’re aiming to support with your donations.

For help determining whether or not a charity is all it appears to be, all you need to do is visit Charity Navigator: Your Guide to Intelligent Giving. Founded in 2001, Charity Navigator is the nation’s largest charity evaluator, examining tens of thousands of non-profit financial documents in their quest to help people with philanthropic goals. The organization is extremely informed about the true financial operations of all kinds of charities, both bad and good. They’ve used that knowledge to create an objective, unbiased rating system to assess the financial health of more than 5,000 of America’s best-known charities.

Charity Navigator’s rating system examines how responsibly a charity functions overall, as well as how well-organized it is to sustain its programs. Each charity is given an overall rating of one to four stars, as well as specific assessments such as how committed a charity is to keeping donors’ private information confidential. The website is easy to navigate by charity name, location, or type of activity. It also features opinion pieces by charity experts, "Top 10" and "Bottom 10" lists that rank the most efficient and inefficient charities in various categories, and examinations of charities founded and/or endorsed by celebrities.

These are some of the most efficient, worthwhile charities:

• Direct Relief International provides medical assistance to improve the quality of life for people victimized by poverty, disaster, and civil unrest at home and throughout the world.
• The National Christian Foundation
• PATH, an international organization that creates sustainable, culturally relevant solutions to enable communities worldwide to break longstanding cycles of poor health.
• Rotary International strives to advance world understanding, goodwill, and peace through the improvement of health, the support of education, and the alleviation of poverty.
• World Wildlife Fund, which works to preserve the diversity and abundance of life on Earth and reverse the degradation of the planet’s natural environment.
• City of Hope joins together some of the world’s most knowledgeable physicians, researchers, scientists, and health care professionals to treat and one day cure cancers, diabetes, HIV/AIDS, and other life-threatening diseases.

These are a few of the inefficient charities that spend more than 50% of their donated funds on high administrative costs rather than the people they are supposed to be helping:

Charity - Administrative Expenses

• Jobs with Justice - 77.5%
• Boys Choir of Harlem - 66.3%
• National Council of Negro Women - 64%
• Cherokee National Historical Society - 58.2%
• Friends of Israel Disabled Veterans - 57.3%

Children, police, veterans, firefighters, and a host of other potentially needy people are often used to tug at the heartstrings of people who think they are helping a worthy cause. But to be sure the cause you’re forking out money for is indeed worthy, do a little research first. Be sure your helping hand is actually helping a needy person to improve their circumstances, and not just helping a greedy person improve their bank balance. Although there are some bad apples, they are outnumbered by well-run, honest, efficient charities that make a difference in the lives of people around the world every day.