Checking Out Charities

At the end of the year, many people think about making charitable contributions. Before you start writing checks, however, make sure that the charity actually spends the majority of the money it raises on programming, not on overhead or continued fundraising. While there are no laws regulating how charities spend the money they raise, the Better Business Bureau suggests supporting organizations that spend less than 35 percent of total contributions on fundraising and overhead costs.

The American Institute of Philanthropy recently reported that 20 charities they studied were managing their resources poorly, paying high overhead costs and direct-mail fundraising fees and, in some cases, providing their leaders with six-figure salaries. Some of the charities, including AMVETS and Purple Heart, gave less than a third of the money raised to the causes they champion. For more information and to help you select carefully, see http://www.charitywatch.org/.

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