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How to Choose a Health-Related Charity

Step 4: Ask Questions

As a potential donor, you should not hesitate to ask straightforward questions about how charities spend money. While all organizations have overhead costs to consider and money to invest in further fundraising, the best charities devote the bulk of their donation money to actual services. In fact, AIP's standard for a "satisfactory" charity rating (grade C) is one that puts 60% of its funding toward services. Higher ratings are reserved for groups that spend 75% or more on programs.

But don't just take these numbers at face value -- ask follow-up questions about precisely where the money goes. Some groups consider things such as expensive telemarketing or direct mail fund-raising campaigns to be types of "outreach" or "education," which is a bit of a stretch. Some questions you may want to ask include those around fundraising, how much the group invests in research initiatives, which of their programs have been most effective,  and how many individuals the group has served in recent years.

Step 5: Make Sure the Charity Is Properly Registered

Most states require that charities and other nonprofit groups register before soliciting contributions. Checking with the agencies that govern these groups is an important step on your checklist before moving forward with making a donation.

Step 6: Check With Charity Watchdog Groups

Groups such as the BBB Wise Giving Alliance and AIP's Charitywatch are always great resources to turn to when choosing a charity. Both organizations offer a wealth of helpful information on their web sites. Additionally, AIP's Charity Watchdog Report is published three times a year and is available by mail for a modest shipping and handling fee.

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Reviewed on March 24, 2011

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