You’ve been thinking about increasing your charitable giving, but the thought of contributing to an organization or service that might squander your hard-earned cash has left you feeling less than generous. What if your donation isn’t used efficiently? What if your dollars do more for covering overhead than helping a cause? What if the money is misused, never realizing the purpose for which it was intended? If you’ve decided you want to give to charity to make the world a better place, there’s a better way to track where your money goes and to actually see the impact of every dollar donated to an agency or organization.
ImpactMatters.org is a new charity-rating system that provides analysis of charitable giving. Elijah Goldberg, executive director of ImpactMatters, says that its system offers analysis of a wider range of nonprofits than GiveWell.org, which also measures the cost-effectiveness of charitable dollars but focuses more on international charities.
Thousands of charities are currently eligible to receive tax-deductible contributions; to date, ImpactMatters has rated approximately 1,000 charities. How does it work? For example, if you give a $25 donation to Shared Harvest Foodbank, an Ohio-based charity, ImpactMatters will provide a donation analysis breaking down the impact of that donation; in this instance, $25 will provide a meal to 13 needy people. A $25 donation to Paralyzed Veterans of America will increase benefits claimed by a disabled veteran by $250, according to analysis provided by ImpactMatters.
In addition, charities are given a one- to five-star rating based on ImpactMatters’ analysis. Ratings are based on charities that serve the same cause, enabling donors to easily make an apples-to-apples comparison. Even though many charities have not yet been rated by ImpactMatters, Goldberg notes that some charities receive a “governance report” designed to provide donors with basic information and alert them to problems that have been detected such as egregious overhead expenses and lack of charity accountability.