Sometimes it can be difficult to find a charity that is as ethical as they claim to be. This article will help you find and assess organizations worthy of your donation. 

In an era of a social justice revolution, it can be daunting to find organizations to support. Sure, you see their ads on social media, but how do you know if they spend their money ethically? What if you’re paying for their CEO’s third home or even unknowingly supporting an extremist organization? Luckily, sites like charitynavigator.org and charitywatch.org have streamlined the process of vetting charitable organizations so you can ensure your money is going to a cause you care about. 

In this article, I will be focusing on three aspects to help you research nonprofits: 

Administrative costs: How much does an organization spend on the causes they are involved with vs. how much they spend on overhead?

Impact: How much does the organization actually do, and how well does it work?

Financial Transparency: How much does the organization disclose about their income and tax bracket?

Administrative Costs

It takes a lot of money to run a non-profit organization. They have to take into account their employee salaries and office rental costs, which dictates how much the charity gives to the causes they support. Some unethical organizations use=donation money to supplement their CEO’s paycheck. The site Charity Navigator utilizes colorful graphs to help potential donors evaluate how much money the organization spends on their cause compared to their 

overhead, or operational costs. Charity Navigator uses three sections of an organization’s expense report to get their Program Expense Ratio: program (how much they donate to the cause they support), administrative costs, and fundraising. 

A good example of an organization spending most of its income on the program is the National Women’s Law Center, which spends 85% of its income on the programs it supports internationally. They spend roughly 15% on administrative costs and fundraising combined. It’s important to note that all nonprofits are different and cannot be held to the same bar. While it is best to take into account their Program Expense Ratio, some organizations simply do not raise enough money to spend it all on their charitable programs. 

Impact

How do you know if a nonprofit is actually doing something with your donation money? It can be difficult to quantify the effectiveness of an organization, but independent research can help you make an informed decision about your donation. Charity Navigator’s video details some of the steps you can take to make sure your donation is being used well. One tip they suggest is to call the organization to directly ask them about their impact. However, this poses a problem: the organization might give biased information since they would want to look good at first glance. It helps to have something tangible the organization has done with your donation. 

ProPublica is an independent news organization founded in 2008 that exposes abuses of power against the public from government and institutions through nonbias journalism. Their Investor Impact Report, details all their work for the past year. Additionally, they link follow-up stories to their original articles that sparked the active change to fix injustices. In 2021, the administrator to the Environmental Protection Agency used ProPublica’s article on how the EPA allows some communities to breathe toxic air and announced a new Pollution Accountability Team in response to ProPublica’s article. 

Financial Transparency

Our final aspect of vetting a charitable organization relies on a group’s ability to maintain a clear view of its finances. Obviously, it’s a very important job to tell your donors where their money is going. Charity Watch defines what classifies as a charity and how that tax status could influence the money spent on the intended program. Generally, 501(c) 3 organizations are what most are classified as, meaning they receive tax-exempt contributions from donors, as long as they do not try to influence legislation or endorse presidential candidates, according to the IRS’s classification and rules of charitable organizations with that status. 

An example organization that fits the 501(c)3 status while also providing transparency to its financial records and expenditures is Amazon Watch. While it may sound like an Amazon.com watchdog organization, the charity is actually focused on legislating and providing humanitarian relief on behalf of the Indigenous communities in the Amazon rainforest. They spend 85.6% of their revenue on the Amazon program, the rest going to administration and fundraising, but their tax records are publically available for anyone to see, dating back to 2016. 

The sites utilized in this article were Charity Navigator and Charity Watch, but they’re only two of a litany of other similar sites. The nonprofits listed are not the only worthy charitable organizations in the world; rather, these are just a jumping point for you to do your own research and give to causes you are passionate about.

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Clayton is an aspiring photojournalist with a Bachelor's in Liberal Studies with a minor in History from Indiana University - Bloomington. In his free time, he enjoys hikes, movies, and catching up on the news. He has written extensively on many topics including Japanese incarceration in America during World War II, the history of violence, and anarchist theory.