Used to be you could give your money to a charity and then pat yourself on the back. These days, you never know where your money is going. Enter Charity Navigator, a nonprofit that uses IRS data to determine how effective charities are and where the money they get actually goes.
In its most recent rankings, Charity Navigator ranked 49 Dallas-area charities and nonprofits, rating them on a scale of zero to four stars in terms of how efficient they are. Two local charities -- Texas Stampede and the National Center for Freedom and Renewal -- were given zero stars, putting them in the bottom two percent of all organizations Charity Navigator rated last year. On the flip side, 12 Dallas-area charities were given four stars, including Central Dallas Ministries, The Dallas Arboretum and Botanical Society, Dallas Zoological Society, the Interfaith Housing Coalition and the North Texas Food Bank. So if you're thinking of giving to a local charity, you'd do well to visit Charity Navigator first.
The site breaks down, according to the specific charity, how much is spent on fundraising and administrative expenses, as opposed to the programs the charity is ostensibly running. Take Central Dallas Ministries, for example. In 2005, CDM spent about 91 percent of its budget on program expenses. Just 3.2 percent went to administrative expenses. Conversely, the National Center for Freedom and Renewal, to which Charity Navigator gave zero stars, spent nearly as much on administrative and fundraising expenses (45.7 percent) as it did on program expenses (55 percent). At NCRF, which "promulgates the Gospel of Jesus by promoting public interest in issues affecting the Christian community," 3.14 percent of its expenses, according to Charity Navigator, went to the salary of its vice president, Warren Kelley.
According to a recent Q&A in Black Ink Magazine, Charity Navigator president Trent Stamp said more and more people are researching charities before giving.
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"There's a huge movement toward researching charities in an attempt to measure which ones are effective," he said. "Rapidly disappearing are the days when a benevelent-sounding name and some tragic photographs are enough to sway a donor. Younger givers want data." --Jesse Hyde