Five Ways to Check a Charity

Jane Bennent Clark of Kiplinger offers solid benchmarks for measuring sound charities:

1. Look at spending priorities – aim for organizations that spend at least 75% of their budget on programs and split the remaining 25% between fund-raising and overhead.
2. Evaluate accountability – be sure the group has a well-defined structure and organizational support.
3. Beware of red ink – on the 990, look for the line that indicates positive or negative assets.
4. Gauge the cushion – look for 6-12 months worth of working capital.
5. Review the annual report – look for ‘unqualified’ in the auditor’s notes.

Self-promotional plug:  Cross International channels over 95% of budget on projects and less than 5% on fund-raising and overhead and passes the other four benchmarks very well. Check our Financial Accountability information here.