There are hundreds of legitimate charities in the United States that serve a variety of causes. Each year, Forbes formulates a list of the top 50 charities based on criteria surrounding the size of the charity, revenue, and the efficiency with which they are able to raise and spend money.Continue Reading
Forbes ranks charities based on five specific criteria, including private support, total revenue, fund-raising efficiency, charitable commitment and donor dependency. Each category is intended to determine the legitimacy of a charity in a different way.
Private support, total revenue and fund-raising efficiency rank the charity based on the amount of money available to help its respective cause. Private support is the amount of money donated to the charity by private donors, while the latter two categories indicate the charity's ability to raise funds on its own. Donor dependency is determined largely by the discrepancy between these three categories. The higher the percentage of private support is of total revenue, the higher the charity's donor dependency.
The truest indicator of a legitimate charity is its charitable commitment percentage. This number indicates the percentage of the charity's total revenue that goes directly to help the cause that it supports. As of 2014, the only two charities that donate 100 percent of its revenue to their respective causes are the Brother's Brother Foundation and The Task Force for Global Health.Learn more about Business & Finance