How to Compare Charity Organizations

Written by patricia o'malley
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How to Compare Charity Organizations
Nearly one million public charities operated in the United States in 2008. (Donations image by Rebs O from Fotolia.com)

A charity is a type of non-profit, tax-exempt corporation providing social, religious, educational or humanitarian services to the public or to its members. You can use three types of criteria to evaluate charitable organisations: legal, objective and subjective.

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Finding Information

Gather information about the charities you want to compare. Look at any written materials you may have. Three websites offer information to evaluate charities: The Urban Institute's National Center for Charitable Statistics, GuideStar and Charity Navigator. Each site contains incorporation, financial, location and other data.

Review the organisations' own sites for information about their background, finances, mission, services, staff and accomplishments. If the site is insufficient, contact the agency directly and ask for their most recent annual report, budget, audited financial statement and publications.

Legal Criteria

See whether each agency followed all legal requirements for incorporation, registration, obtaining a public solicitation license and any other regulations. The Internal Revenue Service website's "Charities and Nonprofits" section (irs.gov) contains a "Search for Charities" link to verify an agency's tax-exempt status. Your state's Department of State Bureau of Charitable Organizations has similar information. Search GuideStar and Charity Navigator for the agencies' IRS filings (called the 990 forms) and any other information they may have.

Objective Criteria

Non-profit professionals use certain objective criteria to evaluate charities. Compare the income and expenses on the agency 990 forms at charitynavigator.org and on the agency's own annual report, if it's available. Industry standards dictate that administrative and fundraising expenses be no more than 10 per cent of the overall budget. The remaining funds should go to programs.

Look at the agency's mission statement and goals. Is the statement realistic and relevant? Are the goals in line with the mission? What programs does the agency use to implement its goals? Does the staff have the necessary education and experience to accomplish the goals?

Look at the results. Does the agency meet its goals?

Subjective Criteria

Think about what's important to you. Do the agencies' missions and programs address issues that concern you? Do they conduct their activities in a fair and ethical manner?

If possible, try to speak with agency staff members, clients or colleagues. What is the agency's reputation in the community?

Evaluation Tools

Charity Navigator's site contains a feature to compare charities. You can use it if the site has information on the charities you wish to compare. If not, you can make a simple chart on your own.

Write titles across the top of a table, such as mission, administration, fundraising, programs and services, expertise, reputation and results. Write the names of the agencies down the left-side column of the table. You can check the appropriate boxes where your priorities intersect with an agency, or you can give each agency a rating for each category.

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