How to Check Out a Charity Before You Donate (8 Helpful Tips)

With so many organizations out there, some great and others less so, it makes sense to do a bit of research before you click the “donate” button.

Donating to a cause you care about should feel good, not stressful. It’s important to ensure a charity is legitimate, transparent about its activities, and genuinely helps people.

This guide will show you what to look for before you donate, including how to verify a charity’s legal status, spot red flags, and use trusted tools to compare groups.

Together, we can make sure your kindness helps as much as possible.

1. Verify the Charity’s Legitimacy

Ensure the charity is legitimate and trustworthy before donating.

Confirm 501(c)(3) status using the IRS Exempt Organizations Tool

Use the IRS Exempt Organizations Tool to check if a charity is tax-deductible. Search for the group by name or EIN on their website. Donations to 501(c)(3) groups qualify for tax deductions, while donations to 501(c)(4) groups, like certain social welfare organizations, do not.

Look at Box I on Form 990 if you need proof of status. Nonprofits with over $50,000 in revenue must file this form yearly. Keep in mind that IRS delays after COVID-19 may affect filing updates.

Double-check before donating large amounts if this is important to you.

Check state-level registration through your state’s charity regulator

Check if the charity is registered in your state. Most states require charities and fundraisers to register before asking for donations. Visit nasconet.org for links to state charity agencies.

Some states even have online databases where you can search registrations.

Unregistered charities might be breaking the law. State regulators also track complaints or legal issues against groups. Report any suspected fraud to your state’s charity regulator right away.

Look for accreditation by independent watchdogs

Look for watchdog groups like the BBB Wise Giving Alliance or CharityWatch. They review charities for trust, financial health, and honesty.

Accreditation means a charity has passed checks on its governance and transparency. While not required by law, a lack of certification can raise concerns about larger nonprofit organizations.

2. Use Trusted Charity Evaluation Platforms

Check reliable charity rating sites to see how organizations perform. These tools make it easy to compare and decide!

Charity Navigator

Charity Navigator helps you find trustworthy nonprofits. It rates thousands of U.S.-based nonprofit organizations on financial health, accountability, and transparency. Scores range from 0 to 100 across key areas like program spending and administrative costs.

Star ratings make it easy to quickly compare groups.

The platform uses IRS Form 990 data to analyze charities in detail. You can search by cause or location and see how funds are used. Charity Navigator also shows CEO pay levels and overhead expenses.

With tools like this, choosing where to give becomes much easier!

GuideStar (by Candid)

GuideStar, run by Candid, holds a big database of IRS-registered nonprofit organizations. It includes key details such as mission statements, financials, leadership information, and Form 990 filings.

You can also find charts and graphs showing how charities use donations.

The platform helps you check if a charity is tax-exempt under 501(c)(3). Transparency seals in Bronze, Silver, Gold, or Platinum levels show the amount of data each group provides.

Filters let you sort nonprofits by size, cause type, or location. Large donors and foundations often rely on GuideStar to vet groups before making grants.

BBB Wise Giving Alliance

BBB Wise Giving Alliance checks charities against 20 standards. It reviews their finances, governance, and fundraising practices.

Only approved groups get accredited. You can view complaints and reports for free on Give.org. The platform also highlights whether a charity provides clear information online, so you know whom to trust before donating.

3. Review the Charity’s Financial Transparency

Check if the charity shares clear financial information. Look at how they use donations to fund their programs.

Read annual reports and audited financial statements

Annual reports can show how a charity spends your donations. Look for detailed breakdowns of revenue and expenses. These reports should explain the sources of funding, such as grants, donations, or investments.

Check if they highlight major programs and accomplishments. Watch for specific stories or achievements tied to their mission.

Audited financial statements give extra assurance. A third-party auditor checks these documents for accuracy and compliance. Nonprofits earning over $50,000 annually must have them available.

Review them closely to spot one-time expenses or big asset sales. These details help you assess whether the charity manages its funds responsibly.

Examine IRS Form 990 for revenue, expenses, and leadership pay

IRS Form 990 shows how a nonprofit handles money. Look at Part I for revenue and expenses. Check if most funds go to programs, not overhead.

Part VII lists top employee salaries and board members. Compare pay with similar organizations. Find professional fundraising costs in Part I, Line 16a. Use this data to ensure your donation supports the cause, not unnecessary spending.

Evaluate the percentage of funds spent on programs vs. overhead

Check Part III of Form 990 to see how much the charity spends on programs versus overhead. Programs should account for most of the funds, demonstrating a focus on helping rather than on administrative costs.

Avoid charities with high fundraising or ad expenses. You can find these in Part IX, Lines 11d and 12a.

Look at total assets in Part X, Lines 16a and 16b, to ensure stable growth without wasteful spending. If you see excessive lobbying fees or low program spending percentages, it’s a red flag.

Spend time comparing numbers before donating.

4. Assess the Charity’s Mission and Impact

Check if the charity has clear goals and measurable results. Look for proof of how they help people or solve problems.

Review clear goals, measurable outcomes, and evidence of success

Check the charity’s mission statement for clear, specific goals. A strong mission should explain what it aims to achieve, like feeding 10,000 families or building 50 clean water wells each year.

Look at their results. Do they share measurable outcomes? For example, an impact dashboard could show how many people received help last year. Some nonprofits offer reports with before-and-after data or case studies to prove success.

Awards or third-party reviews are also good signs of credibility. Make sure their progress ties back to their stated purpose, not just to activities with no impact.

Look for reports, infographics, or dashboards that show real-world impact

Check for reports that highlight real results. Annual reports often include infographics that highlight key achievements, such as meals served or scholarships awarded. These visuals make data easy to understand.

Dashboards can display real-time updates on fundraising progress or service delivery. Some charities update these monthly or quarterly. Look for honesty about challenges and lessons learned.

This shows transparency and trustworthiness.

Read stories, testimonials, and case studies from those they help

Stories highlight real change made by charities. Look for detailed cases with dates, places, and results. For example, Food for the Poor shares how families rebuild homes after disasters.

These stories prove donations work.

Testimonials from people helped add trust. Some nonprofits post video testimonials or reports on their site. A mix of voices shows a broad impact across different groups or areas they serve.

Please also check whether the media coverage supports these claims.

5. Spot Red Flags and Common Scams

Watch out for fake charities or high-pressure tactics. Knowing the signs can protect your money.

Avoid charities with vague or generic missions

Avoid charities that use unclear or generic names. Scammers often use broad names to sound helpful, such as “Children’s Aid Fund” or “Relief for All.” These groups may not explain who they help or how they use donations.

Check if the charity provides program details and strong goals. Legitimate nonprofit organizations share reports, real stories, and impact data. If no clear information is available online, this could be a red flag.

Stay cautious with your money!

Be cautious of urgent, emotional pleas or aggressive solicitation tactics

Scammers often use emotional stories to rush donations. They may pressure you with claims such as “Time is running out” or “This is an emergency.” Stay calm and take your time to research before giving.

Aggressive tactics, such as repeated calls and emails, can signal trouble. Legitimate fundraisers must give their name, the charity’s name, and why they are calling. Calls should only happen between 8 a.m. And 9 p.m., as per the federal rules. Always look for a clear caller ID or a callback number.

Never trust offers that promise prizes in exchange for money.

Watch for copycat names mimicking legitimate organizations

Check the charity’s full name and website carefully. Scammers often create fake names that sound like real ones. Look for small spelling changes or extra words in the name. For example, “Red Cross Foundation” might try to mimic “American Red Cross.”

Always confirm contact details, such as mailing addresses and phone numbers. Compare these with trusted sources like Charity Navigator or government websites. Avoid giving money to a charity that has no verifiable online presence or recent complaints associated with its name.

6. Ask Smart Questions Before You Give

Ask the charity how they spend donations. You deserve to know. Be curious about their goals and how they measure success.

What percentage of donations go directly to programs?

Check how much money goes to programs. A good charity spends at least 65% of its funds on programs. You can find this in their Form 990, especially in Part III. Also, ask for the latest annual report or financial statement.

Be cautious if they refuse to share these details. Use Charity Navigator or GuideStar to compare program spending with others. Watchdogs often rate charities based on program-to-overhead ratios.

How does the organization measure success and report outcomes?

Ask for the charity’s latest reports. Impact reports or outcome data show their success. Good charities share measurable results, not just activities. They might include infographics, scorecards, or dashboards to summarize outcomes.

Some track long-term effects, not just short-term outputs.

Check if they have had third-party evaluations or audits recently. This can confirm accuracy in reporting. Ask how often they update and review their impact data. If they are clear and transparent about these processes, it builds trust in your donation decision.

What are the charity’s top priorities and current challenges?

Top priorities often include expanding programs, serving more people, and tackling urgent problems. Some charities aim to grow their reach or improve their services. Others may focus on launching new projects that align with their mission.

Challenges can involve funding gaps, staff shortages, or rising costs. Economic shifts may also affect donations. A charity’s annual report or newsletter can reveal these struggles.

Leadership updates also show how they plan to overcome issues while staying true to their goals.

7. Consider Privacy and Giving Preferences

Protect your personal info when donating. Use tools such as donor-advised funds to stay private or to give strategically.

Use donor-advised funds for strategic or anonymous giving

A donor-advised fund (DAF) helps you donate anonymously. This keeps your contact details private and safe. You can also plan gifts more effectively by giving to multiple groups from a single account.

Some DAF services offer online tools to track your impact. They also let you give a one-time donation or set up regular contributions easily. Many community foundations and banks sponsor DAFs but may require minimum contributions, such as $5,000.

Explore platforms that offer privacy protections for donors

Some platforms let you give without sharing personal information. Look for ones with privacy badges or certifications. These show they protect your data.

Use donation pages starting with “HTTPS” to keep payments secure. Some sites also offer encrypted payment processing. Read the platform’s privacy policy to see how they use and share your details.

You might even opt out of mailing lists if offered.

Check how your information will be used or shared

Review the charity’s privacy policy carefully. Check if your data will be shared or sold to third parties. Some charities rent donor lists for marketing purposes, so opt out if needed.

Ask how your info is stored and used. Avoid sharing sensitive information, such as credit card numbers, via insecure channels, including email or text. Check whether the charity accepts anonymous donations or limits donor recognition.

8. Compare and Choose the Right Charity for You

Pick a charity that aligns with your values, has clear goals, and uses donations wisely. Choose the one that feels right for you!

Shortlist several organizations aligned with your values

Search for charities on platforms like Charity Navigator and GuideStar. Use their filters to match organizations with your causes. Look for nonprofits with clear missions, strong impact reports, and transparent financials.

Check ratings from BBB Wise Giving Alliance or Charity Watch to confirm trustworthiness. Review the websites of the groups that interest you. Focus on recent accomplishments and diversity in their programs before finalizing your list.

Compare their effectiveness, transparency, and outreach

Check how well the charities use their funds. Review IRS Form 990 to see program spending versus overhead costs. A good charity spends most of its money on programs, not admin or fundraising.

Compare executive pay and check if it’s reasonable.

Test transparency by reading annual reports and financial statements. Check impact reporting, such as infographics, dashboards, or case studies. Look at newsletters and social media updates for outreach efforts.

See whether they share clear goals and real stories from the people they help. Use platforms such as Charity Navigator or GuideStar to verify strong ratings for accountability and impact tracking.

Decide how, when, and how much to give

Decide if you want to donate one time or regularly. Base this on your budget and preferences. A donor-advised fund can help with strategic gifts or private donations.

Select a secure method, such as a credit card, check, or a trusted crowdfunding site. Use only pages that start with “HTTPS” for security. Save donation records for tax purposes and track future contributions.

Set reminders if you plan to give again later.

The Bottom Line

Giving to a charity can make a big impact, but it’s smart to do your homework first. Check their legitimacy, finances, and mission carefully. Use trusted tools such as Charity Navigator or the IRS website for guidance.

Protect yourself from scams by being careful with payment methods and responding to urgent requests. Take your time, ask questions, and give where you feel it matters most.