A key factor is a charity's overhead costs. The more money spent on a charity's mission and the less on administration and fundraising, the better. Another key factor is performance data that indicate that a charity is fulfilling its mission and improving the lives of the people that it serves. Two good resources to find information about charities are Charity Navigator (www.charitynavigator.org) and a charity's own Web site. Look for evidence of widespread impact on many people and not just one or two isolated success stories.
Also check a charity's tax status and make sure that it has been regularly filing an annual return with the IRS to prove its tax-exempt status. If it has not and you make a contribution, you cannot deduct your contribution. Copies of the Form 990 tax form filed by various nonprofit organizations are available at www.guidestar.orgfeedback on this Personal Finance Frequently Asked Question.
