What Are The Best And Worst Charities To Donate To?

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Person holding ball of money (Caption: Best and worst charities to donate to)

Looking to get a charity tax deduction? How do you know which are the best and worst charities to donate to? It’s not so much which are the best causes (as that could be highly debatable and subjective), but rather what’s the best use of your hard-earned money and return on your dollar? Is your money going to have a large impact and make a difference in the cause or will it go to waste on expensive overhead or unnecessary spending? We’ll share with you a little more about charitable donations tax deductions and our top picks for the best charities to give to (as well as those not to give to).

Most Effective Charities To Donate To

There are hundreds, if not thousands, of worthwhile causes all over the world that need financial support. Whether it be a call from your alma mater, a radio ad for a veteran’s hospital or a postcard from your local pet shelter.

So many good causes are attempting to tug at your heart strings and fight for a piece of your wallet. But with so many options, how do you know which are the most efficient charities and best bang for your buck?

Do Your Research Before Donating

Some organizations have catchy names that make them seem like they’re legit but be careful. A little homework can go a long way. You can do your own digging around but to save time here are a few reputable websites you can reference:

  1. CharityWatch
  2. Charity Navigator
  3. BBB Wise Giving Alliance

These three sites tell you everything from how they raise (and spend) money, to their transparency with the public and governorship within the organization. They examine charities regularly and give them a grade or rating that can be used to evaluate whether or not they are worthy of your money.

Guidestar is another useful database that gives you financial data of nonprofits (on their 990 form required by the IRS), board and operations staff listings, and results. You can search for information on a specific organization or use it to get ideas by putting in criteria including geography and cause type. It’s free to create an account to see details, and you can upgrade if you’re interested in additional features.

We’ve researched these resources, and additional sites like Consumer Reports, to compile a list of the best charities to donate to for you.

Best Charities To Donate To

Below are our top picks for good charities to donate to based on what we consider to be the most efficient charities (ie. they make the best use of your hard-earned dollars).

These organizations are selected for their high ratings and the large percentage of money spent on programs and the communities they serve (versus administrative costs and salaries, for example, dollars the charities themselves never see). So, you can be confident that your donation will be put to good use.

These groups came up consistently as best, A-rated companies.

Worst Charities To Donate To

And now here’s our list of worst charities. What makes them so bad? Many factors including how little they actually contribute back to their mission and cause.

Some of these give a measly 2% towards those efforts and upwards of 70% on salaries, professional fundraisers and marketing. These came up on nearly every list we found, so be careful before you fork over dollars (more like pennies) to these groups.

Many of the lowest-rated companies we found are very vague and involve children, cancer/illness, veterans or firefighters. And be cautious of scams and knock off charities of more well-established, successful organizations like the Make-A-Wish Foundation.

Are Donations Tax Deductible?

Tax-deductible donations and how much you get back depends on a number of factors including your tax bracket. However, charitable giving can be a wise decision not only for moral but financial reasons as well. However, don’t just assume a charity is a non-profit. Unless they are registered as a 501(c)(3) they are not technically tax-exempt and therefore your donation is not tax deductible.

Video: Giving Tips For Tax Deductible Donations

The end of the year is often a popular time to give money and make a charity tax deduction. Watch this quick minute and a half video from Time that shares some things you should keep in mind when doing charitable donations for tax deductions.

Don’t forget to include charitable donations when preparing your budget for the year. Need a little help with your finances? Check out our comparison of two top personal financial solutions, Mint and Personal Capital, so you can affordably keep your books straight.

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