Making the Grade: How to Tell if a Charity is Effectively Using your Money

July 3, 2015

According to Urban Institute, 1.44 million nonprofits were registered with the IRS in 2012, an 8.6% increase during the previous decade. With so many charities to choose from, individuals are now faced with deciding which organizations are making the most of the money they’ve been given. One of the best resources we’ve come across when it comes to charity research is a group called Charity Navigator. Charity Navigator was founded by a group of investment professionals who wanted to make sure the money they were donating was being put to use in the best manner possible. To satisfy this goal, they created a database of charities and then thoroughly researched and ranked those charities based on their effectiveness. The product is a searchable database that provides information on how well your charity is managing its expenses, how transparent they are with the use of their funds, were the funds are coming from and a myriad of other helpful statistics.

 

As part of our corporate goals, Cedarstone has chosen to support Children’s Hunger Fund, both monetarily, and by volunteering our time periodically throughout the year. In choosing to support Children’s Hunger Fund, we put them to the test using Charity Navigator and were pretty pleased with the results. The Children’s Hunger Fund received a 4 out of 4 rating with a high score for both their financial efficiency and accountability & transparency. We also found that 97.4% of the charity’s total expenses were spent on the services it offers, meaning that for every $1 donated, 97 cents go directly to the children in need. If you’d like to check out how your favorite charities rank, click on the following link:

 

www.charitynavigator.org

 

In addition to data and charity rankings, Charity Navigator also provides a list of helpful tips for donors and tax benefits of giving. In an effort to encourage charitable giving, the IRS has created quite a few tax benefits available to individuals and depending on your giving preferences, these benefits could have a significant impact the efficiency of your giving. If you’d like to learn more about the best way to donate feel free to connect with an advisor using our contact page or call (888) 571-5582 to speak with a charitable planning expert.

 

 

McKeever, B.S. and Pettijohn, S.L. (October 2014). The Nonprofit Sector in Briedf 2014. Urban Institute. Retrieved from: www.urban.org/sites/default/files/alfresco/publication-pdfs/413277-The-Nonprofit-Sector-in-Brief--.PDF

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