Holiday giving: How to choose a charity

New tools help givers, and those in need, find answers.

By , Correspondent of The Christian Science Monitor

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    Volunteer Larissa Nyuko serves lunch to the needy at a kitchen run by San Francisco's Glide Memorial Church.
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In June 2006, when Wendy Maholic learned that her husband, a master sergeant, had been killed in Afghanistan, her thoughts turned to her 10-year-old son. As she struggled with her grief, she wondered how to help fill the hole left by the loss of his father.

As months passed, Mrs. Maholic learned of a small, up-and-coming charity in Colorado called Knights of Heroes, which provides free, all-inclusive summer camps and long-term mentoring programs for sons of fallen soldiers.

A week of fishing, canoeing, and horseback riding with other children and adult male role models – especially ones who ostensibly knew what Andrew was going through – seemed perfect, but Maholic was apprehensive. The camp was located in Colorado Springs, Colo. She and Andrew were in Fort Bragg, N.C. No one in her immediate circle of friends and family had heard of the organization.

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It seemed promising. The camp even offered to arrange for mothers and sisters to be lodged nearby during the

session. But she needed more. Like many parents in search of advice, she went online and discovered what she needed – and a new way to evaluate charities.

With the explosion of social networking and user-generated online content, a new crop of websites promises to use similar techniques to help donors, volunteers, and clients assess nonprofits. In some, reviewers are asked to provide commentary on their personal experiences; others poll constituents. It's not fail-safe. But the approach arms donors with information that goes beyond the financial information provided by traditional charity-rating services. It also exposes charities to far greater scrutiny, which some nonprofits have struggled to warm up to.

"It gives you a great feel for what [the experience] is really like," says Maholic, who used a service called GreatNonprofits to check out the charity. "I really got the sense that [Knights of Heroes] would treat them like their own [children]."

Her son, Andrew, has attended two camps with the charity and now receives weekly calls from his mentor. "Andrew's mentor can really relate to him," she adds. "He's been there and knows that sometimes you don't have to say anything."

Previously, donors have relied heavily on GuideStar and other firms that decipher financial data required by the Internal Revenue Service. "While financial data certainly has its place, donors and volunteers should use their heart and their head in making decisions," says Perla Ni, chief executive officer of GreatNonprofits, based in Palo Alto, Calif. "No one has a better perspective on a charity than those who experience it."

GreatNonprofits was conceived in the aftermath of hurricane Katrina. "We were looking for local nonprofits that were helping local residents of Biloxi, Miss., but found that information was hard to come by," recalls Ms. Ni, who was the publisher of Stanford Social Innovation Review at the time. "So we sent someone to walk the streets and ask residents which nonprofits were doing the best work." That basic idea of gathering opinions from those served became the basis of GreatNonprofits. Since then, the service has grown to rate some 2,000 charities. Some 50,000 visitors view the site each month, according to the group.

Some users are enthusiastic. "It's not just about ratio and numbers; it's whether a charity is vibrant and useful to the community," says Sean Stannard-Stockton, CEO of Tactical Philanthropy Advisors, which assists foundations and wealthy donors. He regularly consults websites like Yelp! and GreatNonprofits before making recommendations.

At least one established ratings group is jumping on the bandwagon. Charity Navigator, which has evaluated charities since 2001 based primarily on financial data, is planning to revamp its ratings system. Soon the service will incorporate the human perspective on a nonprofit's effectiveness by surveying its constituents and presenting those findings along with the financial performance.

"There's a new movement within nonprofits to focus on results," says Ken Berger, president of Charity Navigator. "How do we know that you're not doing more harm than good?"

The change is provoking criticism from some charities, Mr. Berger concedes. They ask: " 'Are you mad? We are just so unique,' " he recalls. But he argues that such sentiments are inexcusable and that measuring results might actually help nonprofits with foundations and donors. "Being able to demonstrate how you've helped will become increasingly important," Berger says. "Many foundations are requiring that nonprofits measure their results to qualify for grants." Some nonprofits are apprehensive, Ni agrees. "They're afraid of airing their dirty laundry in public. But if people are going to say something negative, you can always take that feedback and make changes."

But how reliable are those user reviews, especially when a charity is dealing with difficult clients? For example: Delancey Street Foundation in San Francisco provides job training for substance abusers, ex-convicts, and the homeless. When one Delancey Street client posted a negative review on GreatNonprofits, calling into question the group's long-term results, spokeswoman Carol Kizziah was incensed. "I personally found the reviews to be slanderous," she says. "I just don't know how they could give a voice to a drug addict."

Those are exactly the people who need to be heard, Ni counters. "We're giving a voice to the people that the charity serves. We always give nonprofits the opportunity to counter reviews."

"There's no question that donors want reliable information," says Berger of Charity Navigator. "Getting that information is certainly going to be complex and difficult, but it will happen."

In the end, these new ratings tools will prove to be a net positive for charities and those they serve, says Brian Hill, executive director of The Oral Cancer Foundation in Newport Beach, Calif. "Either you produce or you don't. It's easy to lose sight of the people you serve, but seeing people's comments really helps you stay focused and efficient."

Mr. Hill adds that being highly rated on GreatNonprofits has helped by significantly increasing his base of donors. "Money really does flow from the message boards. If it wasn't for the Internet, The Oral Cancer Foundation wouldn't be anywhere," he says.

Trusting the charity was everything to Maholic, who pondered letting her only child travel more than 1,000 miles to the Knights of Heroes program – even though she'd be in the state while he was. "I had a gut feeling that they'd be good, but hearing from others made it a lot easier to be away from Andrew," she says.

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Also:

How charities survive tough times

The 50 largest US charities ranked by total income (PDF)

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