The Importance of Background Checking Your Charity Donations

As socially conscious individuals, we all make our efforts to contribute to just and right causes. Of course, this contribution process is different for each and every one of us, but giving back has in many ways become a socially expected activity—and rightly so. There are an endless number of causes, charities, organizations, and programs out there that deserve our interest as a society and benefit from our generous donations. That being said, it’s important that we really examine where our money and charitable donations are going when we make them. Yes, there are some charitable organizations that are dishonest about their givings, but also, oftentimes our donations aren’t being used in exactly the way we imagine. Donating and contributing to a cause is important—just be sure you understand how your money and contributions are being utilized. Follow these steps to better understand the organizations you dedicate your time to and to background check exactly how offerings are utilized.

In an ideal situation, all tax-exempt organizations would put every penny of your donation to good use. Of course, as many of us know, this isn’t always the case. Many organizations only use a portion of your donation to put towards the cause at hand. For some this may not be a big deal. If you’re comfortable with charities using your money or other forms of donation in whatever way they please (as many are), than this shouldn’t be a huge worry. But, there are many charitable givers who like to know exactly how their money is used. Groups like the American Institute of Philanthropy (AIP) and Guide Star lookout for charitable givers, examining various charity organizations and revealing how donations are processed. AIP’s website Charity Watch gives profiles of thousands of different charity and nonprofit organizations, so that givers can do their research. The first step to ensuring that you donations are being used to the best ends is to do your research. Background check organizations you’re interested in contributing to by exploring these different “watchdog” organizations and seeing what they have to say about the charities.

AIP will rate various organizations based on the percentage of the money raised that goes to the causes they support. This is a quick and easy way for the everyday contributor to understand more clearly how much of their donation actually goes to the cause they are interested in supporting. AIP will give good grades to charities that spend 15 percent or less on fundraising and administrative costs. One of the most common complaints donators have is that their donations are going toward the organization more than they are actually going towards the cause. Groups that spend 40 percent or more on telephone fundraising and other marketing efforts will receive failing grades. This simple grading system gives socially conscious individuals a quick way to run a little background check on the organizations they wish to support.

Jane Smith is a freelance blogger and writer for She specializes in various types of information screenings, such as pre-employment background checks, criminal records, and much more. Email her your questions and comments at

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