As the economy has improved, more of us are giving to charity. That’s great, because there are groups that need support for their work on a wide array of good causes: disease prevention and research, care for military veterans, disaster relief, environmental protection and hunger alleviation, just to name a few.
Charitable giving topped $335 billion in 2013, the fourth straight year of gains, according to the latest research from Giving USA Foundation and its research partner, the Indiana University Lilly Family School of Philanthropy.
The largest source of charitable giving came from individuals, $241 billion from more than nine out of every 10 households. The average household donation was $2,974.
What makes giving gratifying is knowing that our donation has made a difference, which can be a challenge. Watch this video for tips on how to decide where you want to make a contribution, and then read on for more information and examples of charities with reputations for living up to their promises.
Look to Guidestar for facts
When deciding which of the 1.8 million IRS-recognized charities or the thousands more faith-based groups will get your money, many donors start their homework with Guidestar, which provides free access to IRS Forms 990, annual reports, and listings of executives and board members. (Registration required, premium services available.)
A Form 990 for Oxfam America, for example, shows the group received $66.6 million in donations in 2013. The group says it has helped 20.7 million people globally to end poverty and fight injustice through disaster relief and advocacy programs.
In 2013, 79 percent of our expenditures went directly to program support. At least 90 percent of funds designated by individual donors for humanitarian emergencies directly support our responses for those emergencies.
Oxfam International recently was in the news for its report that the richest 1 percent of people in the world own 48 percent of the world’s wealth and may soon own more than half.
CharityWatch rates nonprofits
CharityWatch, unlike Guidestar, interprets the information available on nonprofits and uses it to grade them, A through F, for potential donors. The group says it reviews IRS filings and audited financial statements to rank 599 charities.
More than 200 nonprofits on its top-rated list, it says, generally spend 75 percent or more of their budgets on programs, spend $25 or less to raise $100 in public support, and do not hold excessive assets in reserve. The watchdog group also looks at governance benchmarks and “open-book” status for disclosure of basic financial information.
Earning an A rating from CharityWatch, for example, is Doctors without Borders, which sends more than 30,000 doctors, nurses and other qualified professionals to provide medical humanitarian emergency aid to people affected by armed conflict, epidemics, malnutrition, natural disasters and exclusion from health care. The group spends 87 percent of its budget on programs and only $12 to raise $100, CharityWatch says.
Charity Navigator issues stars
Charity Navigator says it rates more than 8,000 groups based on two broad performance areas: financial health, and accountability and transparency. Each charity receives zero (lowest score) to four stars (best-scoring performers).
The group breaks down 10 broadly defined charitable activities: animals; arts, culture and humanities; community development; education; environment; health; human and civil rights; international; research and public policy; and religion. Each category has more narrowly defined causes. It also offers Top 10 lists featuring, for instance, celebrity-related charities, troubled charities, and top-notch charities.
The Midwest Food Bank, which has distributed the equivalent of more than 17.5 million meals since its 2003 beginning, tops Charity Navigator’s Top Notch list, earning a four-star rating for three straight years. Midwest Food Bank serves more than 755 nonprofit organizations through centers in Illinois, Indiana and Georgia.
The Life You Can Save: Emphasis on efficiency
The Life You Can Save, founded by philosopher Peter Singer, is based on Effective Altruism: Leading an ethical life using a portion of personal wealth and resources to alleviate the effects of extreme poverty. Helmed by Charlie Bresler, former president of The Men’s Wearhouse, it says 16 organizations in 2015 are well-suited to deliver highly effective aid. The group encourages donors to publicly pledge a percentage of their incomes.
One charity backed by Singer’s group, Project Healthy Children, sends experts to low-income countries in sub-Saharan Africa to boost the quality of mandatory micronutrient fortiﬁcation of staple foods such as sugar, wheat and maize ﬂour. Fortification costs of 26 cents per person per year return much more in productivity gains and savings to a nation’s health care system, Singer’s group says.
Chronicle of Philanthropy: Top givers
The Chronicle of Philanthropy, the charity industry’s trade newspaper, tracks gifts at the state, county, metropolitan-area, and ZIP code levels based on taxpayers who itemize deductions. Nevada saw the largest increase in giving between 2006 and 2012, it concluded.
While poor and middle-class Americans dig deeper into their wallets than the rich as a percentage of wealth, The Chronicle says, nonprofits still look to high-income donors. With young tech donors taking a leading role in its Philanthropy 50 list of top givers, a leading recipient of the largess is Silicon Valley Community Foundation, which in 2014 gave grants totaling $474 million to a wide variety of charities based on five strategies: economic security, education, immigrant integration, regional planning and community opportunity.
Forbes 50: Biggest charities
Despite a slight drop in donations, United Way remains No. 1 on the annual Forbes list of the 50 largest U.S. charities, raking in $3.87 billion in 2013, largely through payroll deductions. Salvation Army, with $2.08 billion was No. 2. The church is best known for its social service efforts.
United Way Worldwide leads a network of nearly 1,800 community-based United Ways in 41 countries and territories. Volunteers and experts from your community screen and select the programs funded by your local contributions.
About 73 percent of charitable giving goes to faith-based organizations, whether religious institutions or nonprofits that have a religious identity, Indiana University’s Lilly Family School of Philanthropy says. Its research also reveals that 34 percent of donors to faith-based charities say they don’t belong to an organized religion.
While local congregations make up the largest amount, 41 percent, of religious giving, many people donate to international aid agencies such as World Vision, a Christian humanitarian organization that offers disaster relief and poverty alleviation programs in nearly 100 countries.
GuideStar says you should focus on a group’s mission. Health and human services are among the top five concerns of charitable donors.
Partners In Health is a global nonprofit focusing on delivering high-quality health care, addressing the root causes of illness, training providers and advancing research for the poor and marginalized. Ninety-two percent of all donations go directly to PIH’s programs in the field from Malawi to Mexico.
From ebola to birth defects, many donors want to target organizations dedicated to fighting specific health issues. Some commonly known ones include the American Heart Association, Muscular Dystrophy Association, March of Dimes, or the National Multiple Sclerosis Society, to name a few.
Among the many cancer fighters are research organizations such as Fred Hutchinson Cancer Research Center in Seattle, where scientists seek new and innovative ways to prevent, diagnose and treat cancer, HIV/AIDS and other life-threatening diseases.
Millions of people, many of them children, do not get enough food. Some groups work on relief aid, others emphasize sustainability. Feeding America, for example, works with local food banks. Others take a global approach.
Since 1944, Heifer International has helped 20.7 million families in 125 countries by using your money to donate cows, goats, chickens and other livestock that provide life-sustaining products such as milk, eggs, cheese, honey and wool. Families receive farm training and, through “Passing on the gift,” donate female animal offspring to other families.
Animal welfare organizations can use your help at the national and local levels. EntirelyPets.com lists 50 top pet charities, including pet rescue and placement groups.
The Humane Society of the United States is likely the best-known animal protection organization. With affiliates, the group provides hands-on care and services to more than 100,000 animals each year and professionalizes the field through education and training for local organizations.
Charity Navigator, JustGive.org and GuideStar provide breakdowns of arts, culture and humanities charities. Whether it’s libraries, museums, symphonies, ballets, operas, theater groups or arts festivals, your donations help assure that culture remains accessible.
Many communities have programs similar to Seattle Music Partners, which provides music lessons and instruments to students. Another example: In Connecticut, Little Kids Rock and the SpreadMusicNow education fund recently donated 2,000 musical instruments to Hartford Public Schools.
Only 16 percent of our charitable donations go to education, but last year that was the fastest-rising category of beneficiaries. You may contribute to your college alumni association or groups that give scholarships, promote school reform, provide learning programs or support teachers, parents, students and schools.
Local PTAs organize volunteers, often parents, to help with school building improvements, newsletters, special events and teaching supplies. In some schools, they fund the art teacher, the school counselor or pay for an additional teacher or aide to help bring down class sizes. They are always looking for donations.
Give your time
If you want to donate to your favorite cause but haven’t got the cash, consider giving your time. Nearly 65 million volunteers in 2012 provided 7.9 billion hours of service valued at $175 billion. You can stuff envelopes, feed animals, tutor children, build housing, serve as a museum docent or even join the board of a local nonprofit. Food banks often need help gathering, sorting and distributing contributions. Local Goodwill Industries chapters often need volunteers as tutors, instructor’s aide or even vintage fashion collection models.
Most charities can accept new, unused or nearly new items. Or, suggests CharityNavigator, consider selling jewelry or other items yourself and donating the proceeds. If you have stocks or other securities, says MIT, you may find tax benefits associated with giving appreciated securities rather than selling them first.