CharityWatch’s A+ to F ratings are the result of thousands of hours of in-depth analysis of large U.S. charities of national scope or interest. Our ratings are essentially mini financial investigations conducted by degreed accountants that each require many hours of manual review of audited financial statements; tax filings; accounting, governance, and fundraising practices.
Our quality over quantity approach to rating charities necessitates a time-intensive process that unfortunately means we can’t rate every nonprofit. We hope these additional resources will aid you in your research of nonprofit organizations of interest to you.
If CharityWatch doesn’t rate a charity you are considering supporting, don’t stop there. You can conduct some basic research yourself. Start by confirming exactly which legal entity is asking for your donation, verify its tax-exempt status, locate its most recent financial reporting, check state charity regulators, and then look beyond the numbers for information about its leadership, fundraising practices, related organizations, and any significant controversies or regulatory actions.
If researching small and/or local nonprofits, we recommend reading the following article for important context prior to reviewing a charity’s financial documents:
Only some donations to nonprofit organizations are tax-deductible, such as those directed to 501(c)3 public charities in good standing with the IRS. If your ability to take a tax deduction factors into your giving decisions, it is important to check a charity’s tax status prior to making your contribution.
To see if donations to a particular charity are tax-deductible, use the Internal Revenue Service’s Exempt Organizations search tool.
The majority of states have designated departments that regulate charities operating or soliciting donations within their borders. If you have been the victim of a charity scam, consider filing a complaint with your state’s charity regulator. Some states have searchable online databases where you can find out if a charity is properly registered and the names of the people who govern it. Remember that registration does not imply an endorsement by the state.
Find Your State Charity Regulator
The National Association of State Charity Officials (NASCOnet) also provides information on charity regulation at the state level.
Charities soliciting within a state’s borders are typically required to file with charity regulators in that state even if they are legally incorporated in a different jurisdiction. A few states provide more comprehensive information such as copies of charity tax filings, audited financial statements, fundraising contracts, and more. Charities sometimes post incomplete tax filings, misleading pie charts, and other financial data on their websites that don’t provide a complete picture of how efficiently they are operating. State regulators are more likely to have a charity’s complete financial reports.
Florida Department of Agriculture and Consumer Services
Massachusetts Attorney General
North Carolina Secretary of State
State Links for Exempt Organizations covering topics such as registration requirements for charities, taxation, information for employers, and more can be found here.
Society of Professional Journalists provides advice for whistleblowers who want to expose wrongdoing by leaking documents and other information to journalists. It also provides a list of media outlets that accept such data, along with links to secure file sharing options for those who want to provide information electronically.
The Center for Public Integrity Find out from what sources your favorite charities are receiving their grants. Use this grant search tool to easily search for grants between nonprofits, including grants received by political “dark money” groups.
US Treasury List of Terrorist Organizations The United States Department of the Treasury, Office of Foreign Assets Control publishes a list of organizations that it deems involved in terrorism or narcotic trafficking.
Southern Poverty Law Center’s (SPLC) List of Hate Groups features an interactive map that can be used to identify active organizations SPLC classifies as hate groups in the United States.
National Committee for Responsive Philanthropy (NCRP) promotes accountability and responsiveness in the philanthropic field. NCRP’s staff monitors philanthropic practices and identifies potential areas for reform that can make a positive, progressive difference for the nonprofit community.
InterAction is the largest alliance of U.S.-based international development and humanitarian nongovernmental organizations.
Center for Disaster Philanthropy focuses on medium to long-term recovery efforts with the goal of transforming disaster giving by providing timely and thoughtful strategies to increase donors’ impact during domestic and global disasters and humanitarian crises.
Charity Commission for England and Wales allows you to search the register of charities to find information about nonprofit organizations in England and Wales.
Charity financial reporting can be inaccurate, inconsistent, incomparable, or incomplete, especially in charity tax Forms 990, which are not audited. A charity’s reported program spending may include fundraising expenses that have been allocated to programs, donated goods that substantially increase reported program expenses without a corresponding expenditure of cash, or other accounting items that make simple financial ratios difficult to interpret.
A Form 990 also generally reports the activities of a single legal entity. Many charities operate through networks of related organizations. Looking at one Form 990 in isolation can therefore provide an incomplete picture of how money moves through the broader organization. This is one reason CharityWatch analyzes audited financial statements in conjunction with tax filings and other reporting. Consolidated audited financial statements may capture multiple related legal entities and eliminate transactions among them. This prevents double counting of the same donations and expenses and provides a more complete picture of an organization’s financial activities overall.
Most donors are not accountants or nonprofit financial professionals, nor should they have to be. If you are researching a charity yourself, use its Form 990 as a source of information, but be cautious about drawing conclusions from reported percentages or financial ratios without understanding how those numbers were produced.
With this in mind, interested donors can access these online searchable databases to view the tax forms of nonprofit organizations:
Internal Revenue Service (IRS)
Schedule O: Read it. Important explanations that don’t fit elsewhere on the return frequently appear here, such as family relationships among board members or executives; program descriptions; the organization’s policy for sharing certain information with the public; and other useful descriptive data.
Part I and Part VIII: Where does the organization’s money come from? This section details revenue sources. Line 1g reports non-cash donations of in-kind goods that are included in the charity’s reported financial figures (broken out in more detail in Schedule M).
Part IX: How does it classify program, administrative, and fundraising expenses? While you can’t take such figures at face value due to the complexity of nonprofit financial reporting, this section of the form provides a starting point for investigating how a charity spends its money. Keep in mind that cash and non-cash donations are mixed together and reported in aggregate in this section of the form.
Part VII and Schedule J: What are executives and other highly compensated individuals paid? Who is on the charity’s board?
Part VI: What does the charity report about governance, conflicts of interest, whistleblower policies, and availability of financial information? Is its board of directors sufficiently large and independent?
Schedule F: Does it conduct significant activities or make grants outside the United States?
Schedule G: Does it use professional fundraisers or conduct certain fundraising activities?
Schedule I: Does it make grants to other U.S. organizations?
Schedule L: Does it report transactions involving interested persons or insiders?
Schedule R: Does it have related organizations that may be important to understanding the larger financial picture?
Charities claiming a religious aspect to their missions are often not legally required to publicly disclose information that many other charities must report to the IRS each year. Donors wanting to know how such a charity spends its contributions, compensates its employees, or even who sits on the board of directors may be at a loss if the charity is not willing to open its books to outside scrutiny.
CharityWatch is able to provide ratings for religious organizations (such as the territories of the Salvation Army) only when they willingly provide us with audits and other financial information upon our request. CharityWatch assigns “?” ratings to many religious organizations of interest to donors that declined or disregarded our repeated requests for information. When CharityWatch is unable to provide a rating for a religious organization, donors may be able to find information about these groups from the following resources:
MinistryWatch is the online database of Wall Watchers, a watchdog organization that provides reports on Christian, faith-based organizations.
Evangelical Council for Financial Accountability (ECFA) is an accreditation agency of Christian evangelical organizations that comply with standards for financial accountability, fundraising, and governance.
CharityWatch’s area of focus is on performing in-depth analyses of the financial reporting of specific charities. We don’t conduct independent statistical research about giving trends. The following organizations do conduct and publish such information:
National Center for Charitable Statistics (NCCS) at the Urban Institute is designed as a portal for nonprofit practitioners, researchers, and policymakers to download and explore data. Work on the site is organized into projects, within which users can find NCCS information, including summary tables for public charities and private foundations by state, type, age, and size, as well as lists of the largest organizations by subsector.
Indiana University Lilly Family School of Philanthropy identifies emerging trends and provides insights into philanthropy with in-house, science-based research.
Giving USA publishes an annual report (for a fee) on giving trends and charity statistics.
Not all charity raters are the same. Before relying on a charity rating, score, seal, or badge, donors should understand what it actually measures and how it was produced.
Some charity evaluators charge the charities they rate annual fees as a condition of publicizing their ratings, creating an inherent conflict of interest. Others publish “robo-ratings” generated largely from charity-reported information and automated formulas, without meaningful analysis of whether the underlying data is accurate, consistent, comparable, or complete. Automation does not correct unreliable financial reporting. It simply processes it.
This can give donors a false sense that a charity has undergone meaningful financial or “impact” scrutiny when it has not. A computer can perform a calculation perfectly and still produce a misleading result if the underlying data is unreliable or the formula fails to account for what the numbers actually represent.
Meaningful charity evaluations are time-intensive, complicated, multifactorial, and expensive to produce. When a charity rater with a relatively small staff publishes ratings on thousands, or even hundreds of thousands of organizations, donors should consider how much substantive analysis could realistically have been conducted for each one.
The following organizations evaluate charities using methodologies and criteria that differ from CharityWatch’s, but each conducts meaningful analysis within its particular area of focus. Donors may wish to consult these resources for additional perspectives when researching a charity:
Animal Charity Evaluators conducts research and evaluations to produce impact reports and a recommended list of animal charities it believes are having the maximum impact on preventing or reducing animal suffering.
GiveWell is dedicated to finding outstanding giving opportunities and publishing its analysis data to help donors decide where to give. GiveWell excels at the time-intensive and complex task of quantifying the impact of additional donations (e.g., lives saved or improved). Donors can consider using GiveWell’s data in conjunction with CharityWatch’s A+ to F ratings of charity financial efficiency, governance, and other metrics.
Charity Intelligence Canada offers ratings on hundreds of Canadian charities based on an analysis of financial metrics and impact.
As the only independent charity watchdog organization in the United States, CharityWatch relies on your support to fund our in-depth research and analysis in order to bring you the unbiased charity ratings and other information you rely on to help you make more informed giving decisions. We are not directly or indirectly funded by nonprofit industry interests.
We hope you will consider making a donation today so that we can continue to speak openly and critically and call out wrongdoing when we see it without concern for special interests cutting our funding. CharityWatch is a small organization and your donations are noticed, needed, and greatly appreciated. Thank you for giving wisely!
