From Consumer Reports.
Check With a Watchdog
Before making a donation, it's a good idea to look up the charity you are considering at the websites of the charity watchdogs. The three big ones are CharityWatch, Charity Navigator, and BBB Wise Giving Alliance. Collectively, these groups evaluate thousands of nonprofit organizations based on how they collect and spend their money, how transparent they are to the public, and how well they’re governed.
Though each watchdog has its own system for assessing charities, they all use similar criteria. For example, CharityWatch says that for a group to have a satisfactory rating, at least 60 percent of its spending should go to the charity's programs. To garner its top rating, 75 percent of a group's expenses must be used for its programs, and its fundraising costs cannot exceed 25 percent of the money it raises.
Charity Navigator also examines how much of a charity's spending goes to programs, but the percentages vary depending on the causes they support.
The BBB Wise Giving Alliance requires charities to spend at least 65 percent of their total expenses on their charitable missions and no more than 35 percent of their contributions on fundraising activities—as well as meet about 20 other requirements—in order to be accredited.
The watchdogs, though, report their findings differently. CharityWatch gives letter grades, Charity Navigator uses stars, and BBB Wise Giving Alliance reports which, if any, of its charitable standards a charity fails to meet, awarding accreditation only to those charities that comply with its request for information and meet all of its standards. Those that don’t send in requested information get the label “Did Not Disclose” on the BBB website.