When you open your mailbox this time of year, you’ll probably find sandwiched between all those holiday cards and catalogs lots of solicitations from health-care charities. Their mailings are usually slick and very compelling. But before you sit down and write a check, it’s wise to learn as much as you can about the charity. Does the money you donate really help people in need…or is it being used to pay exorbitant salaries and bonuses to the charity’s staff? And does the charity have excessive overhead so that you’ll be footing the bill for pricey fund-raising campaigns…and expensive offices or exotic trips for the group’s board meetings?
Having spent close to 40 years running health-care charities, here’s what I recommend to help you evaluate a health charity before you give…
• Do some strategic checking. A few years ago, the Federal Trade Commission charged four cancer charities with conning donors out of $187 million. Most of the money they raised went to the charities’ organizers in the form of cars, cruises and concert tickets and for other noncharitable purposes. Very little actually went to patients. No matter how well-known the charity may be, it’s useful to find out as much information as you can about the organization. Start by going to one (or several) of the websites listed below to check on the charity’s governance, finances and effectiveness. The sites use different rating systems, and you may need to check more than one site to find the charity to which you’re considering making a donation.
These sites are all run by independent third parties that provide excellent insight into the charities they review and rate. The sites are CharityNavigator.org…Give.org (a Better Business Bureau program)…and CharityWatch.org. Helpful: Be sure to check the program details and complaints about the charity.
• Dig deep. Experts suggest that charities generally should spend no more than 25% on overhead costs, but that is not a hard-and-fast rule and depends on the charity. The sites mentioned above break that down. Too often, more than half of what charities raise is gobbled up by fund-raising costs. Insider tip: Get the organization’s IRS Form 990. This is a form that all charities are required to fill out each year to report their complete financial status. They are also required to make it available to anyone upon request. Check the group’s website or call and request it. You can also review a charity’s IRS Form 990 at GuideStar.org. This form will give you the most comprehensive information on how the charity raises and spends its money.
• Give locally. While many large national charities are good organizations, local health charities often have greater needs and may make better use of your donation. Rather than searching online for details on national charities, you can call or visit a local group’s office and ask the development director, CEO or chief program officer what your money will be used for. The charity that my wife and I donate to is run totally by volunteers, so every dollar that’s raised is used to support women (and their families) during breast cancer treatment. Important: When you do make a donation, ask for a letter of receipt so that you can deduct all or a portion of the money from your taxes.
Beware: Never donate to telemarketers claiming to represent a health charity. Too often, this is a scam…or the telemarketing firm takes an enormous fee. Also, never send cash—you want to have a traceable record of your gift.