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Can you trust that charity? How to tell the good from the bad

Posted at 9:51 AM, Dec 03, 2021
and last updated 2021-12-03 11:53:10-05

PHOENIX — Each year around this time charities ask for donations, knowing many people are in a more charitable mood.

They call wanting you to help struggling veterans, children, firefighters, etc. You may want to donate, but how do you know where your money really goes?

"There's nothing wrong with taking a beat, looking them up on a service like Charity Navigator and make sure it is a good upstanding charity," said Kevin Scally.

Scally is with Charitynavigator, a non-profit that ranks nearly 200,000 charities on factors including how your money is spent.

"Typically we are looking for organizations with at least 70% going towards programs with 30% or less going to administrative fees or overhead," Scally stated.

Earlier this year, the Federal Trade Commission (FTC) cracked down on a fundraiser they say took in 110 million dollars for charities that spent "as little as one-tenth of one percent" of donations on the actual cause.

If you really want to make your dollars count, take some time, do some research, and try to spot the common signs a charity isn't what it seems. One common issue is a charity will try to sound like a well-established charity.

"Like Children's Cancer Institute or Veteran's Service Organization and they don't have a clearly articulate mission," Scally said.

A few years ago, the FTC went after Cancer Fund of America which had Arizona ties. The FTC said most of the money raised went to the director's family and friends.

Also, the North Dakota Attorney General got a cease and desist order against Red Cross of Americas which does sound a lot like the American Red Cross.

Make sure the organization is an actual registered 501(c)(3) charity which allows for taxable deductions.

You can use their EIN, Employee ID Number search on the IRS website or search on Charity Navigator.

Charity Navigator is a free service that lists about 500 charities that were issued their advisories for having issues.

CharityWatch and are other non-profit sites that rate charities.

The FTC warns about charitable giving.