Nonprofits in the United States disclose detailed information about their finances and operations to the public. These disclosures are stored in a searchable government database, but I prefer ProPublica's Nonprofit Explorer because it makes obvious issues like conflict-of-interest transactions that would otherwise be buried in the tax documents. Nonprofit Explorer will also link to external audits if available. (Charities that receive significant government funds may require an audit.)
Either way, you can look up a nonprofit by name, or more exactly by its Employer Identification Number (EIN). You can typically find a nonprofit's EIN on its website.
Form 990 is the main disclosure form. A few items worth checking are:
- Part I, line 8 "Contributions and grants" – how much money was donated or granted to the charity; gives a sense of the organization's size.
- Part III, "Statement of Program Service Accomplishments" – what programs the charity runs and how much money each gets.
- Part IX "Statement of Functional Expenses" – how much the charity spends, and how much of that spending is on the charitable cause (column B), versus management (column C) and fundraising (column D). The ratio of program spending to total expenses is a key number: CharityWatch says "Most highly efficient charities are able to spend 75% or more on programs."
Some organizations in the database are US affiliates of international organizations who pass on donations to the parent organization. For example, Part IX of the Form 990 filed by Doctors Without Borders shows that 95% of its program service expenses are "grants and other assistance to foreign organizations". Further detail about these grants is listed in Schedule F – we can see that Doctors Without Borders is sending most of its money to sub-Saharan Africa, North Africa, and the Middle East. (For domestic grants, see Schedule I.)
I have not found third-party charity raters like CharityWatch and Charity Navigator to be especially useful. Most or all the information they present is drawn directly from the tax documents that you can read yourself.
Form 990 is a tool for assessing the finances of a charity. It can tell you whether a charity is well-run, but it cannot tell you whether a charity is effective at its mission. This is a harder question to answer in general: a food bank in a major US city and a great ape refuge in Central Africa have very different criteria for success. Charities may publish an annual report detailing their accomplishments, but these are produced by the organizations themselves and therefore should be read with appropriate skepticism. The best independent judge I know is GiveWell. They do impressive research, but their coverage is narrow: all four of their top charities are concerned with public health in the developing world. If a charity you wish to support falls outside of that domain, you may need to do your own research.