Generosity is at the core of the holiday season, and each year many Americans make it a point to donate to the causes most important to them.
Choosing which nonprofit to give to this season can prove difficult, as there are hundreds of choices for every cause. Furthermore, not all organizations are alike, with some more efficient and more transparent than others. The best charities are those that are able to devote the largest share of total donations to the cause they support.
Fortunately, Charity Navigator, itself a nonprofit group, reviews and rates major nonprofits based on two major categories: 1) financial health, and 2) accountability and transparency. 24/7 wall St. reviewed nation’s largest nonprofits that receive the best ratings from Charity Navigator in each of 12 major categories of giving.
Each of these nonprofits performs very well in important categories such as fundraising efficiency, lower administration fees including executive pay, and a favorable ratio of capital to assets, meaning they are able to weather declines in revenue without cutting program operations.
One of the best ways to determine the efficiency of a charitable organization is by examining the percentage of an organization’s total expenses spent on the services and programs the charity delivers. While some nonprofits spend less than 50% on their designated operations, the vast majority of the charities on this list spend at least 80% of their total expenses on their specified programs.
It is important to note that the organizations on this list are scored by Charity Navigator based on the obstacles, opportunities, and expenses inherent to the causes in which they operate. U.S.-based nonprofits, but only against others in the same categories and subcategories. Museums, for example, must maintain expensive collections and facilities and necessarily have much greater overhead than food pantries, which do not require large overhead expenses and are able to spend much closer to their entire budgets on programs.
The Smithsonian Institution, for example, devotes just 77% of total resources to its programs and services, while food pantry service Feeding America is able to budget 98% to programs. Each, however, are among the highest rated organizations in their respective categories.
These organizations are also transparent and accountable, meaning they follow best practices of governance and release clear and complete records of their financial operations. Many of the nonprofits on this list practice policies such as disclosing the pay of the CEO and board members, including a whistleblower policy for handling internal complaints, and publicly documenting board meetings.
To determine the best charitable organizations to give to this holiday season, 24/7 Wall St. reviewed the National Center for Charitable Statistics database of the largest public American charitable organizations. We considered all organizations that ranked among the top 10 in either annual expenses or net assets in each of the major classes of charities. From this list we pulled the organization rated the highest by charitable organization ratings group Charity Navigator. Nonprofits that received less than a score of 90 out 100 were excluded from consideration. Charity Navigator only evaluated organizations that largely rely substantially on support from individual donors.
These are the best charities to donate to this year.