When donors pull out their wallets to give to a charity, Daniel Borochoff, president of Chicago-based CharityWatch, warned that they should not assume that the biggest, most famous charity they know of will be the one to address their philanthropic concerns.
"Every individual needs to think about how they would like to help, how they would like to see their donations being used," Borochoff said.
Charity watchdog executives said donors should dig into what do-gooder groups do and how much of their money is spent on programs versus other costs like administration and advertising. Information on charity rating websites and nonprofits' tax filings can help.
Sandra Miniutti, vice president for Charity Navigator in New Jersey, said potential donors should investigate a group's finances and see how accountable and transparent it is about its work.
Things to look for include whether a charity has at least five independent voting board members and an annual audit, plus if the audit is published on its website, Miniutti said.
Some donors may have a desire to keep their money local but some causes call for a broader approach, Borochoff said.
"People shouldn't think that only local is good because some problems need to be addressed on a national, international level," Borochoff said.
Miniutti cautioned that big events like run-walks and galas are not the most efficient way to raise money because the charity is still paying for the event. Donors should consider how much of their ticket price goes to the organization's mission versus the cost of the dinner or dance.
At the end of the day, it's good to give a straight out donation to the cause, Miniutti said.
Bottom line, donors should take the time to ensure they really understand what a charity does, especially in the cancer world.
"The cancer field is chalked full of really awful (charity) groups, poorly performing, F-rated groups that have cancer in their name," Borochoff said. "There are a lot of great groups out there, but there are a lot of lousy groups out there because (cancer is) a highly charged issue."