With so many corporations and apps now asking donation for various causes. How are they allowed to operate and who checks they are legit and not scams?
In: 11
Nobody checks.
Many are scams.
The burden is on you to investigate before you give money. One resource is https://www.charitynavigator.org/ .
[https://www.charitywatch.org/](https://www.charitywatch.org/) .. is my GoTo for tracking Charities. In the US “Charity” is really a tax filing status for the most part (you can check that status here: [https://www.irs.gov/charities-non-profits/tax-exempt-organization-search](https://www.irs.gov/charities-non-profits/tax-exempt-organization-search)) but not that much is done otherwise to track charities and there are a few scams out there. Worse are the ones that spend all their donations on Administration instead of the cause. This is just a money maker for the CEO and execs. You can check how much is spent on the actual cause at Charity Watch at the above url. For the most part, giving safely and effectively requires a bit of research but thankfully there are resources to help. Do you ever really know 100% for sure? I doubt it, giving requires a bit of faith in your fellow humans, just not blind faith.
**You never can be sure** unless you are part of the board of directors of the charity that you give to.
There are charity watch groups that publish results of their investigations about which ones are good or bad (by their criteria).
Many charities publish data about their finances annually in the form of an “Annual Report” or to their federal tax authority.
For example, in Canada, their [tax people have a list or registered charities](https://apps.cra-arc.gc.ca/ebci/hacc/srch/pub/dsplyBscSrch?request_locale=en)
One charity that I support is called [Harvest House Atlantic](https://apps.cra-arc.gc.ca/ebci/hacc/srch/pub/dsplyRprtngPrd?q.srchNmFltr=harvest+house+atlantic&q.stts=0007&selectedCharityBn=872293972RR0001&dsrdPg=1).
I can ;look at their [T3010 Registered Charity Information Return – Schedule 6 – Detailed financial information](https://apps.cra-arc.gc.ca/ebci/hacc/srch/pub/t3010/v25/t3010Schdl6_dsplyovrvw)
This shows that they took in (in 2020) just over $700K for which they gave tax receipts.
Total eligible amount of all gifts for which the charity issued tax receipts
$709,610.00
The spent most of their cash income on salaries for the various workers with their housing the homeless, feeding the homeless, drug & alcohol rehab and other programs.
The had income from their housing programs, and mortgage and building expenses. They also had vehicle and program expenses.
I have several other charities I give big to. I don’t like giving to things that I can’t be bothered doing the work to know if they are well managed.
I’m afraid I don’t know the answer here, OP – but I think a lot of the answers so far seem to be about _how do we know what charities spend money on_, whereas I think you were asking _how do we know that corporations taking money “for donations” actually donate those_? Is that right, OP?
If so, great question I’d also love an ELI5 for!
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