How to Choose a Charity

Step 1: Define Your Giving Goals

Questions to Ask Yourself:

• What causes matter most to you? (e.g., global health, education, animal welfare, climate change)
• Do you want local or global impact? Some prefer helping their community, others focus on where money goes furthest
• Are you looking for direct services or systemic change? Food banks vs. poverty research, for example
• How important is measurable impact? Some causes are easier to measure than others
• What's your risk tolerance? Established programs vs. innovative approaches

Step 2: Evaluate Charity Effectiveness

Impact and Results

Look for evidence that the charity achieves its stated goals. Strong charities can demonstrate their impact through:

• Specific, measurable outcomes (e.g., "provided clean water to 10,000 people" rather than "worked on water issues")
• Independent evaluations or research studies
• Program completion rates and long-term follow-up data
• Cost-effectiveness analysis (impact per dollar spent)

Financial Health and Efficiency

Review the charity's finances to ensure your donation will be used effectively:

• Program spending: At least 70-80% of expenses should go to programs (not always, but generally)
• Fundraising costs: Should typically be under 20-25% of total expenses
• Administrative costs: Reasonable overhead varies by charity type, but 10-15% is common
• Revenue diversity: Multiple funding sources indicate stability
• Working capital: Sufficient reserves to weather financial challenges

Note: While overhead ratios matter, extremely low overhead isn't always ideal—charities need to invest in infrastructure, staff, and evaluation to be effective long-term.

Transparency and Accountability

Reputable charities are open about their work and finances:

• Annual reports and financial statements publicly available
• Form 990 (IRS tax return) accessible on their website or platforms like GuideStar
• Clear information about board members and leadership
• Regular program updates and impact reports
• Responsive to donor questions and inquiries

Step 3: Leverage Expert Evaluators

Be cautious of charities that exhibit these warning signs:

• Pressure tactics or requests for cash/wire transfers
• Refusal to provide detailed financial information
• Vague or emotional appeals without specific program details
• No clear statement of mission or goals
• Spending more than 40% on fundraising and administration
• Names very similar to well-known charities (potential scam)
• No independent board of directors or all family members on board
• Lack of program evaluations or impact data

Making Your Final Decision

Final Checklist:

• Alignment with your values: Does the charity's approach match how you want to create change?
• Track record: Has the charity been operating successfully for several years?
• Room for more funding: Can the charity effectively use additional donations?
• Expert endorsements: Is the charity recommended by credible evaluators?
• Your comfort level: Do you feel confident about the charity's work and management?