On Your Side Investigation: Tracking donated dollars

On Your Side Investigation: What to know before you give
Updated: Oct. 4, 2017 at 7:00 PM CDT
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BIRMINGHAM, AL (WBRC) - Charity Navigator and GuideStar are devoted to increasing transparency of nonprofits and philanthropic giving. The websites gather information available through public filings to evaluate and grade the financial health and transparency of tax-exempt organizations.

"I would look at the administrative expense," explained Ralph Summerford of Forensic Strategic Solutions. He specializes in evaluating businesses and nonprofits and has expertise in rooting out fraud.

"I would look at the executive compensation and I would look at their fundraising activities and money they spend on program expenses," he said.

Each of these criteria are summarized on Charity Navigator and GuideStar. Summerford believes understanding how much the organization spends on these areas can help one decide whether to donate.

"Personally, I would not want to make a contribution myself if it was over 25 percent of the funds that are raised," Summerford said.

Other charity professionals also advise that a charity's transparency and results should be considered.

In a project called "The Overhead Myth" professionals, including the CEO of Charity Navigator and CEO of GuideStar, advise also looking at other metrics of performance, like transparency and results. These criteria are also evaluated on the respective websites.

GoFundMe pages are becoming common methods for raising money for people or charities.

But, Summerford warns that a GoFundMe account can be created by anyone. There is no requirement for that the page to be operated by a tax-exempt organization. He suggests searching Charity Navigator and GuideStar for more information about organizations running GoFundMe pages.

"It's also important to remember that our platform is backed by the GoFundMe Guarantee," a GoFundMe spokesperson said in a statement.

"In the rare case that GoFundMe, law enforcement or a user finds campaigns are misused, donors are fully protected and will get refunded. And if a campaign organizer does not deliver funds to the intended recipient, GoFundMe will donate the undelivered amount to the right person," the spokesperson said.

And to help avoid that situation, Summerford encourages donors to GoFundMe accounts to contact organizers and ask them directly about the intended use of funds raised. If there is cause for concern, complaints can be submitted direction to GoFundMe.

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