The Easy Way

The quickest way to tell whether your hard-earned dollars are going to a good cause is to log onto Charity Navigator. This is an independent, non-profit organization that evaluates American charities on a four-star system. Charities are rated on two levels of performance: their financial health and their accountability and transparency. Charities with four-star ratings not only give a large percentage of their funds to the intended sources, but they are also stable and healthy internally. An alternative website that offers a similar service is GiveWell.

If Charity Navigator isn't quite thorough enough for you, you can also do the legwork yourself by seeking out their IRS Form 990. Charitable organizations are all required to fill out this form, and it gives you an inside look on how they are spending their money. These are readably available online (and completely legal to view).

By The Numbers

Once you have their 990 form, you can break down where they spend their money. Does a lot of it go to travel? How much goes to production costs and professional services? How much do they spend on grants? Once you figure out where your money is going, it's a lot easier to donate. Does every cent of every dollar make it to the intended recipients? Or is a lot of that money going toward paying executives?

The Bottom Line

It's difficult to know exactly what causes to support, but with a little work, it is possible to be more educated about your charitable efforts. The impulse to help is always a good one, and no matter what, we're just glad you're giving.