Choosing a Charity: What’s Their Spending Ratio?

November 12, 2012 | By | Comments (0)

Donation jar

The first thing you should look for in a charity is their tax designation. (Read more about 501(c)(3) status here.) But after that how do you choose which charity to support? If you want your money to go as far as possible, find out what the organization’s spending ratio is.

The spending ratio is a comparison of how much money is given to support their mission, and how much money is used for overhead costs and fundraising. The most efficient organizations have a spending ratio of 75 percent or higher.