How Charity Ratings Help You Choose a Good Charity
Charity ratings are issued by various charity watchdogs and groups dedicated to helping donors make informed decisions in their charity giving. Charities are evaluated because, unfortunately, some groups are well-organized and some are not. Charity ratings provide an objective look at the performance of a charity and help donors figure out which groups are doing the most efficient job. National charities are the usual groups that are rated.
Charity ratings are used to measure the efficiency and financial capacity of a charitable organization. Some typical information provided by charity ratings include the charity’s breakdown of expenses showing what percentages of expenses went to charity programs, administration and fundraising efforts and information about its revenue. Charity ratings are effective tools in determining how well one charity compares with other similar charities in terms of their financial health and organization.
Besides charity watchdog services, other organizations such as the Better Business Bureau provides charity ratings and reports on whether a charity organization meets certain standards in areas of financial accountability, governance and effectiveness.
Different charity watchdogs use different criteria and indicators in their charity ratings and issue their own reports. Some have their complete charity ratings available online and some charge small fees for their charity ratings guide. In addition, the charity ratings for a certain charity group may differ from one report to another.
In general, those who receive top charity ratings are charity organizations that are transparent about their finances and are willing to disclose their financial statements. A charity would also get good charity ratings if 60% of its funds or higher is used directly for its charity programs. Charities that are efficient in its fundraising efforts will also get better charity ratings. For example, a charity that spends in order to raise 0 is of course more efficient than a charity that spends to raise the given target amount.
While the financial health of a charity organization is only one consideration when choosing a worthy charitable organization, you will find that charity ratings are helpful tools in your decision-making. If you have made a previous donation to a charity that has received below standard charity ratings, do not let this discourage you from giving. Take the time to browse through charity ratings of other organizations and with numerous reputable charities nationwide you are sure to find one that will give you the confidence that your donation will be put to better use.