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Vetting Charities by the Numbers

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Your heart tells you to help someone this holiday season via a charity for your favorite cause.  Yet, there are ten different groups doing similar work.  Which one will best use your contribution?  You can vet the charities by the numbers if you know where to look.

Chief Operating Officer Bennett Weiner with the Wise Giving Alliance says there are three ways we can look for a nonprofit group’s financial information.

1. Annual Reports:  The annual report will summarize a group’s accomplishments and tell how it used resources, in simple terms.  It may be available at the charity’s website.

2. IRS Forms:  You might also find on a group’s own website a link to its latest IRS Form 990.  You can scan line by line of its financial report.

3. Third-party Monitoring:  Watchdogs like the Better Business Bureau do the math for you, checking to see if a charity spends at least 65% of total expenses on program services and no more than 35% of related contributions on fund raising.  The BBB’s Wise Giving Alliance shares free reports with consumers.

Once you’ve determined how many cents out of your dollar will likely go toward the charity of your choice, you can still learn more from a third party like the BBB.  Weiner cautions, “Don’t assume that just because a charity has good financial ratios that they’re fully accountable.”  His organization’s standards also look at truthfulness and accountability in appeals for help, as well a governing board with proper oversight.  You can read all of the BBB’s Standards for Charity Accountability here.

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