Charity watchdog agencies provide insight into the daily operations of nonprofit organizations and help you determine if the charity is legitimate. Each website has its own method for gathering and presenting information which can be valuable in different circumstances.
GuideStar is a 501(c)(3) organization that collects and organizes information like finances, governance, and missions of other public charities for free. Unlike other sites, GuideStar doesn't just focus on the most popular charities; they provide facts about all organizations registered as nonprofit through the Internal Revenue Service (IRS). Although many faith-based organizations aren't required to register with the IRS, GuideStar still provides their public information as well. Guests can view up to five charity profiles, and then, while they don't charge a fee for users, you will need to register for an account with the website to search more and view all financials.
Through IRS documents, public documents, and information given by each charity, GuideStar creates a charity profile. Some of the information you can expect to find on this site includes:
- 990 tax forms from the past three years
- Annual reports
- Board member listings
- Updated contact information
Wise Giving Alliance
The Better Business Bureau is the force behind Give.org, also known as the BBB Wise Giving Alliance. The simplicity of the website makes it appealing to those looking for basic research so they can make quick, informed decisions about charitable giving. Each charity is rated on 20 standards and given the label "standard met," "standard not met," or "unable to verify." Simply type a charity name into the search bar, and you'll get a list of organizations matching that name. In general, the Wise Giving Alliance only evaluates national charities through a questionnaire completed by each organization. Local charities can be evaluated if their local BBB provides that service. Any charity that meets all 20 standards becomes Accredited by the BBB.
Use the search function or browse the alphabetical listing on Charity Navigator to see how each charity rates. You'll only find information for registered 501(c)(3) organizations who file an IRS form 990, have revenues of at least one million dollars, and are based in the U.S., among other specific criteria. Each charity's financial health, accountability, and transparency are gauged based on tax forms and information from their organization's website. Using a mathematical formula, Charity Navigator assigns each charity a star rating of zero to four stars, with four being the best.
Once you choose a charity to examine, their profile includes the following:
- Breakdown of finances
- Statements of impact
- Listings of similar charities
How Watchdogs Help Donors
The benefits of charity watchdogs are most evident to donors. They are given a snapshot of how dollars are allocated within an agency. Donors can also see the level of transparency given by nonprofits through custodial agencies. In some cases, nonprofits may not offer enough information to even achieve a rating. This may be a warning sign that the nonprofit doesn't have all of its business in order.
How Watchdogs Help Charities
Nonprofits can use good ratings as a marketing tool to potential donors and existing donors. It can also be a selling point in receiving grant dollars. Managers within nonprofits can use the findings of charity watchdogs to boost morale or create goals for the organization. Managers can congratulate their team on a job well done with high ratings. They can also institute goals outlined by overseer agencies into improvement plans for the entire staff. Ratings can serve many goals for the nonprofit agency.
Know Where Your Donation Goes
Before you give your hard-earned money in the name of charity, make sure those dollars are getting into the hands of a reputable organization and ultimately to those you wish to help. Charity watchdogs are one avenue for checking up on your favorite charities to see how they allocate resources.