How To Tell Reputable Charities From Unreputable Charities

Donating to a charity is a great act. But, if you donate to an unreputable charity, your money is not going to serve the cause. What is worse, if they are very unreputable, you may be in jeopardy of identity theft. This is reserved for the greatest charity scams out there. You want to donate to a reputable charity, but you're not sure how to tell. How do you tell the difference between a reputable charity and an unreputable charity?

Telling the difference is not easy, especially depending on your definition of a reputable charity. Many charities are legitimate. Their surplus funds go to the cause they support. But, how much of their funds go to the cause they support?

How to tell if a charity is reputable

One great test is to see if a charity is reputable is if donations to the charity are tax-deductible. Virtually all reputable charities allow for tax deductible donations, and in the government's eyes they are considered 501c3 organizations. Though not all reputable charities are tax deductible, and not all tax deductible charities are highly reputable, it is an excellent temperature check. You can be sure that if they are a 501c3 organizations, the charity is reputable enough to have government recognition. Whether they are effective with their funds is another question.

How to tell if a charity is unreputable

So how do you tell if a charity is unreputable? If they contact you on a cold call, then there is a good chance it is an unreputable charity. You can ask for the charity name, phone number, and address so that you can do some online research into the charity. See if they are a 501c3 charity organization. Just the fact that they cold called you should make you somewhat skeptical. Even if they are a legitimate charity, how effective are they? A good charity is able to allocate about 75% of the the money they raise to actual charity programs, leaving the remaining 25% for administration and promotion costs. So, if you find that a charity does significantly less than that, you may want to look for a more effective charity!