Nonprofits Help Donors Choose, Spend Wisely Shrinking budgets and a sluggish economy have charitable donors looking more closely at the organizations to which they donate. Some nonprofits are leading an effort to identify which charities give the most bang for the buck.
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Nonprofits Help Donors Choose, Spend Wisely

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Nonprofits Help Donors Choose, Spend Wisely

Nonprofits Help Donors Choose, Spend Wisely

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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For those of you donating to charity this season, it's a little easier to make sure the money you send is spent wisely. Some non-profits are leading an effort to identify which charities give the most bang for the buck. NPR's Pam Fessler reports.

PAM FESSLER: Nageeb Sumar and his wife want to be smart about where they donate. They're a young professional couple with limited funds. But charitable giving is important to them.

Mr. NAGEEB SUMAR: This year for example, we wanted to focus on giving to at least one charity that's locally based. We think it's important to give back to your local community.

FESSLER: He also thinks that hunger is an important issue. So, unlike most us who might just write a check to the local food bank, Sumar did his homework. He went to something called Charity Navigator, a website that rates the financial health of more than 5,000 non-profits - giving out from one to four stars.

Mr. SUMAR: So, if we go to the website and can click on the organization that we supported, it's actually called D.C. Central Kitchen.

FESSLER: He says he found the group by searching for charities near his Washington D.C. home, and then whittling down the results by selecting only those with the best or four star rating.

Mr. SUMAR: And, you can filter by keyword as well. So, if we type in hunger, then it lists five organizations it comes up with that are doing work in the D.C. local area to combat hunger.

FESSLER: Sumar and his wife were especially impressed with the description of D.C. Central Kitchen's mission. Besides feeding the poor, it trains homeless people to work in the culinary industry. Sumar also checked a site called Guide Star, which displays a charity's tax forms. These show the salaries of top employees - another thing that mattered a lot to him. He wants most of the money he gives to go to those in need. But even with all this effort, there's one thing neither of these sites nor any for that matter, could tell Sumar, and that's how effective his charity actually is.

Ms. SANDRA MINIUTTI (Marketing Vice-President, Charity Navigator): Unfortunately nobody's really been able to answer that question, as of yet.

FESSLER: Sandra Miniutti is vice-president of marketing for Charity Navigator. She admits the site has limits.

Ms. MINIUTTI: We can tell you for example, if the food bank is spending more on its programs this year versus last year, if they are feeding more people. But we can't tell how nutritious those meals are.

FESSLER: And that's a big concern, especially as the economy tightens and charitable dollars become more scarce. Some in the non-profit world would like to see more business-like-rigor at charities.

Mr. STEVE BUTZ (Company Head, Social Solutions): I have seen lots of very well intended organizations waste lots of money.

FESSLER: Steve Butz heads a company called Social Solutions. He's also leading an effort to get non-profits to be more accountable. He's convened something called, The Working Group for Effective Social Investing, which includes the heads of Charity Navigator and Guide Star as well as other non-profit leaders. Steve Butz says that just because a charity has low fundraising and administrative costs, which might get it a four star rating, doesn't necessarily mean it's doing a good job.

Mr. BUTZ: What we would have people focused on is whether or not the organizations they want to support are effective. And so that would start with, do they have a strong theory of change? Do they understand their target population? Do they understand what services they're providing and frankly the outcomes that should come from those services?

FESSLER: And whether they can claim credit.

Mr. BUTZ: Were they able to say, you know what, it is this program - it is this young leadership program that is transforming these kids into young leaders.

FESSLER: But that's not an easy thing to do, collecting and assessing all this data. Elizabeth Boris is in the working group. She also directs the Urban Institute Center on non-profits and philanthropy.

Ms. ELIZABETH BORIS (Director, Urban Institute Center): A lot of non-profits don't have or don't feel they have the time or the technology or the know-how, really, to do this.

FESSLER: She thinks it's extremely complex. The Urban Institute's working on its own project to help measure a charity's effectiveness, but Boris says a solution is many years away. In the meantime, non-profit experts advise donors not to put too much stock in any one rating system, but to collect as much information about a charity from as many sources as possible before sending a check. Pam Fessler, NPR News, Washington.

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