Donate to Nonprofits: How to Give Confidently and Make an Impact

By Bethany Peevy Downie

Whether you are looking to pay it forward with your success or you just want to make a difference in the world, it is always important to do your due diligence when choosing an organization to support. This guide will show you how to find a nonprofit you can trust to make the most of your generosity.

Understanding Nonprofit Donations: How to Give Effectively

Your generosity matters now more than ever. While nonprofits receive funding from various sources like government contracts and foundation grants, donations from individuals play a critical role. According to the 2024 Health of the U.S. Nonprofit Sector report, everyday donors are the backbone of the charitable sector, contributing 32% of the funding that keeps these organizations running.

But here’s what makes your donation even more critical: the same report shows that charitable giving has been declining since 2021, with the number of donors and total dollars donated dropping by nearly 3% in 2023 alone. At the same time, nonprofits are facing an increased demand for their services as communities continue to grapple with ongoing challenges. This means your thoughtful, strategic giving isn’t just appreciated, it’s essential.

That’s why your donations must support trustworthy organizations delivering tangible impact. Your dollars will go furthest supporting organizations with transparent operations, measurable outcomes, and strategic vision. Finding these nonprofits means doing your homework: researching financials, evaluating impact metrics, and distinguishing between organizations that simply mean well and those that deliver measurable results. 

This guide will show you how to identify reputable nonprofits, from using research tools like Charity Navigator to understanding what makes an organization truly effective. Giving effectively comes down to identifying a trustworthy organization, and doing your research is the first step.

What Makes a Nonprofit Worth Donating To?

While many nonprofits have noble missions, not all are equally effective in achieving them. When looking for a mission to support, you want to identify four key characteristics.

1. Transparency

Transparency creates accountability. Donors should look for organizations that provide detailed information regarding finances, programs, and governance. Look for:

• Publishing annual reports with detailed breakdowns of revenue and expenses
• Clearly stating what percentage of donations goes directly to programs

• Sharing specific program outcomes and metrics
• Publishing case studies or success stories with concrete data
• Being honest about both achievements and challenges
• Listing board members and their qualifications 
• Welcoming and responding promptly to questions from donors

2. Financial Efficiency

Financial efficiency reflects an organization’s commitment to managing your generous support. Look for:

• A budget allocating 75-80% for programs and services, with administrative costs below 15% and fundraising costs under 10%
• Detailed financial information that is readily available, such as Form 990 tax filings
• Diversified funding sources rather than dependence on a single donor or grant
• Declining overhead percentages as programs expand
• An efficient use of money and resources, such as adopting technology, pursuing strategic partnerships, volunteers, and data-driven decision making
• High ratings from watchdog organizations like Charity Navigator, Charity Watch, or Candid (formerly Guidestar)  

3. Impact Metrics

Impact metrics provide you with clear evidence that your support is creating meaningful change. Look for:

• Specific metrics that define success in concrete terms rather than vague statements like “helping children”
• Baseline data collected before the intervention demonstrate the progress made
• Measurement of both output (activities like meals served or classes taught) and outcome (actual change like improved health or increased literacy)
• Independent verification through third-party evaluations
• Long-term tracking that measures whether clients continue to benefit years later
• Honest reporting that shares both successes and challenges
• Viewing investment in data collection systems, evaluation staff, and measurement tools as essential infrastructure

4. Strong Governance

Organizations with strong governance structures are better positioned to make sound decisions, manage risks, and maintain public trust. Look for:

• Independent, diverse board of directors with relevant expertise
• Well-defined roles for board members, committees, and executive leadership
• Regular board meetings with documented minutes and attendance records
• Clear conflict of interest policies that are annually reviewed
• Written governance policies covering areas like document retention and executive compensation
• Strategic planning process for setting long-term direction and monitoring progress
• Proper financial oversight, including review of budgets, financial statements, and audits
• Annual evaluation process of the CEO conducted by the board

How to Use Charity Navigator to Evaluate Nonprofits

Evaluating the criteria above is vital to identifying a trustworthy nonprofit. However, you may feel daunted by the prospect of digging through annual reports, analyzing tax forms, and comparing financial ratios across multiple organizations. Fortunately, there is a tool that can do the heavy lifting for you.

Charity Navigator is one of the most trusted tools for donors seeking clarity and confidence in their giving. This free nonprofit ratings platform transforms complex financial data and organizational information into accessible ratings so you can make informed decisions and give with confidence.

Rating System

Charity Navigator uses a four-star rating system that examines three critical dimensions of nonprofit performance

1. Financial Health (35% of score) 

2. Accountability & Transparency (35% of score)

3. Impact & Results (30% of score)

How it Works:

When you visit charitynavigator.org, simply type an organization name, type of cause, or location into the search bar to start searching for your ideal nonprofit. When you click on an organization, you will see a rating of one to four stars.

What the Stars Mean:

Here is a breakdown of the stars rating system:

Rating	Meaning
⭐⭐⭐⭐	Exceptional performance across all areas
⭐⭐⭐	Good overall performance
⭐⭐	Needs improvement in some areas
⭐	Significant concerns requiring caution

Review the Details:

The organization’s page will also include detailed information to help you check expense ratios, verify governance and transparency practices, and look for program effectiveness. Using this data, you can confidently compare nonprofits and make giving decisions backed by third-party validation.

Understanding Key Financial Metrics and Warning Signs

When reviewing nonprofit financials, focus on two critical ratios: the program expense ratio and the administrative costs.

Financial Performance Metrics

Metric	Excellent	Good	Requires Examination
Program Expenses	85% or higher	75-84%	Below 75%
Administrative Costs	Below 15%	15-25%	Above 25%

Red Flags to Watch For

Warning Sign	Description
No Rating Available	Often indicates the organization is too new or missing required documents
Declining Star Ratings	Ratings dropping over multiple years
High CEO Compensation	Compensation that’s excessive relative to organization size
Missing Form 990	Tax filings are not available or not filed
Fund Misuse Reports	Any documented reports of improper fund usage

Important: There is considerable dialogue surrounding these numbers. Not everyone agrees that organizations with higher overhead are automatically less effective. Organizations that invest in technology, staff training, and evaluation systems may achieve greater long-term impact, even with higher administrative costs. Context matters—newer organizations or those tackling complex problems may legitimately require higher overhead during growth phases. Take the time to review the financial performance of each organization, but focus on overall effectiveness rather than just expense ratios.

Making Your Decision

Using Charity Navigator is a great starting point to help you make informed giving decisions. You can also contact the organization directly with any questions, look for client testimonials, explore other independent evaluation tools, and reflect on your personal values and priorities. Also, remember that star ratings reflect past performance and focus heavily on financial metrics. While invaluable for initial screening, they should be part of a broader evaluation that includes the organization’s current programs, leadership, and alignment with your giving goals.

Charity Navigator vs. Charity Watch: Where Should You Look?

Charity Watch is another useful tool to help you evaluate giving options. While Charity Navigator is broader, covering over 225,000 nonprofits, Charity Watch offers in-depth analyses into a smaller pool of well-known organizations. Here’s how the two platforms compare:

Feature	Charity Navigator	Charity Watch
Number of Charities	225,000+ rated organizations	~600 organizations
Rating System	4-star system	Letter grades (A+ to F)
Methodology	Transparency, accountability, results	Financial efficiency and fundraising costs
Key Metrics	Financial health, governance, impact	Program % and Cost to Raise $100
Nonprofit Input	Allows organizations to update information	No input from rated nonprofits
Analysis Depth	Broad coverage, accessible comparisons	Deep investigative analysis
Best For	Initial research, wide exploration	Final due diligence, major donations
User Experience	User-friendly, visual interface	Detailed reports, expert commentary
Independence Level	Collaborative approach	Complete independence

Many donors use both tools to balance breadth and depth in their research. Start with Charity Navigator to identify potential organizations, then use Charity Watch for a more detailed analysis, ensuring your donations go to organizations that are both aligned with your values and operationally excellent.

What’s the Safest Way to Donate to Charity?

Protecting yourself from fraud while ensuring your donation reaches its intended destination requires vigilance, as charity scams are increasingly sophisticated. Here’s how to donate safely and confidently.

Verify the Organization’s Legitimacy

Before making any donation, confirm the nonprofit’s authenticity:

• Check Official Registration: Use the IRS Tax Exempt Organization Search tool to verify the organization’s 501(c)(3) status. You can also search your state’s attorney general website, as nonprofits are required to register in states where they fundraise.
• Research the Organization: Look up the charity on Charity Navigator, Charity Watch, or Candid. Be cautious of organizations with no rating or those that refuse to disclose their financial information.
• Verify Contact Information: Legitimate nonprofits typically have a permanent address, a phone number, and a professional website. Be suspicious of organizations that only provide P.O. boxes or use generic email addresses.

Secure Online Donation Practices

When donating online, follow these essential security protocols:

• Use Official Websites Only: Always navigate directly to the nonprofit’s official website rather than clicking links in emails or social media posts.
• Look for Security Indicators: Ensure the donation page shows “https://” and displays a lock icon in your browser’s address bar. These indicate encrypted, secure connections.
• Trusted Payment Platforms: Use established payment processors like PayPal Giving Fund, Network for Good, or the nonprofit’s secure credit card processing system. Avoid wire transfers, gift cards, or cash payments, which offer no fraud protection.

What to Watch Out for Before Donating

Even intelligent, experienced donors can fall for emotionally persuasive but ineffective organizations. Here are the key warning signs to watch for:

Red Flags

• Lack of Financial Clarity: If audited statements or Form 990 filings aren’t accessible, that’s a red flag. Transparent organizations make this information easy to find.
• Overemphasis on Emotion: Moving stories are powerful, but they should be backed up with concrete data about program effectiveness.
• Overhead Myths: Don’t assume low overhead equals good nonprofit. Look for effectiveness and impact, not just frugality.
• Absence of Impact Measurement: Organizations that can’t show specific, measurable outcomes may be well-intentioned but ineffective.

Remember that taking the time to research and verify an organization’s legitimacy will protect your money and ensure that your generosity has the maximum positive impact.

Are Nonprofit Donations Tax-Deductible?

Yes—donations to qualified 501(c)(3) nonprofits like TechnoServe are generally tax-deductible if you itemize deductions on your tax return. Not all nonprofits qualify, so it’s worth checking the organization’s status before donating if tax benefits matter to you.

Keep records of your donations and be aware that there are annual limits on how much you can deduct. Political contributions and gifts to individuals don’t qualify for tax deductions.

Important: Tax laws are complex and subject to frequent changes. Always consult with a qualified tax professional for advice specific to your situation.

General Support vs. Restricted Giving: What’s the Difference and Why It Matters

Every donation has power, but how that power is used depends, in part, on whether it comes with strings attached. Understanding the difference between general support and unrestricted giving can help you make more strategic decisions about your charitable impact.

General Support

General support allows nonprofits to allocate funds where they’re needed most. This might mean strengthening core operations, responding to unexpected challenges, investing in capacity building, or seizing time-sensitive opportunities for growth and innovation. These unrestricted donations demonstrate trust in the organization’s leadership and strategic judgment. They provide the operational flexibility that enables nonprofits to adapt quickly, scale successful programs, and maintain the behind-the-scenes infrastructure that makes visible impact possible. Think of general support as investing in the organization’s overall capacity, not just its programs, like funding the engine that powers all the good work.

Restricted Giving

A restricted gift is earmarked for a specific purpose. Your money goes directly to that designated program and nowhere else. This approach provides donors with a clear sense of control and a direct connection to the outcomes they care about. However, restricted giving has limitations. When funds are locked into specific programs, organizations may struggle to address other critical needs. A nonprofit might have abundant funding for programs but lack resources for essential infrastructure, such as staff training, technology upgrades, or administrative systems that make those programs possible. This can create operational imbalances that ultimately limit long-term effectiveness.

Why it matters

Both general support and restricted giving have their place in a healthy philanthropic ecosystem. Restricted donations can drive specific initiatives and provide donors with tangible connections to outcomes they’re passionate about. However, unrestricted giving often creates the conditions for greater long-term impact. In light of recent foreign aid suspensions, an unrestricted gift may be crucial in helping an organization pivot into a new direction in order to maintain operations.  If you’re looking to maximize your impact, consider giving organizations the gift of flexibility. Having done your research to find a reputable organization, your trust in their expertise and strategic vision may be the most powerful donation you can make.

What to Look for in a High-Impact Nonprofit: The TechnoServe Example

When deciding where to give, donors should seek evidence that the organization delivers meaningful results. TechnoServe offers a clear example of what to look for in a high-impact nonprofit.

Consistent Third-Party Recognition

External validators consistently recognize TechnoServe’s excellence. The organization has earned a 4-star rating from Charity Navigator with a score of 91%. TechnoServe also holds an “A” rating from CharityWatch, and has been recognized by Candid’s highest level: the Platinum Seal of Transparency. For over a decade, TechnoServe has consistently ranked in the top 1% of evaluated charities.

Strong Return on Investment

The most compelling evidence of TechnoServe’s effectiveness lies in its rigorous measurement of financial impact. For every $1 donated, TechnoServe delivers an average of $7.60 in income gains for its clients. This is extraordinary in the development sector, where many programs struggle to demonstrate clear financial returns.

Long-Term Impact and Systemic Change

Most importantly, TechnoServe’s approach creates lasting change at scale. The organization’s track record demonstrates consistent year-over-year growth in both reach and financial impact: $485 million in financial benefits in 2023, compared to $491 million in 2024. This trajectory shows an organization that isn’t just maintaining programs but actively scaling solutions that work.

Rigorous Validation of Long-Term Results

What makes these numbers particularly meaningful is their foundation in rigorous impact measurement. Independent studies consistently validate TechnoServe’s long-term effectiveness. A randomized controlled trial of the Women Mean Business program found that training and mentorship programs resulted in an average increase in monthly revenues by 22% and take-home income by 17% for women-led businesses three years after the intervention, demonstrating that TechnoServe’s programs create sustained economic benefits that continue long after the program ends.

Building Economic Systems, Not Dependency

This sustainability extends beyond individual clients to entire systems. Rather than creating dependency, TechnoServe builds capacity within local markets, suppliers, and institutions. Their work in 2024 created or strengthened 73,000 jobs while simultaneously mitigating over 126,000 tons of CO₂ emissions through regenerative practices. 42% of the people and enterprises supported were women or women-owned businesses, addressing gender equity alongside economic development. This demonstrates how effective poverty alleviation can simultaneously address multiple systemic issues.

The Model of Effective Giving

These are the kinds of metrics that matter. They show that the organization isn’t just working hard—they’re working effectively. When donors support nonprofits like TechnoServe, they’re backing scalable solutions, not temporary relief. It’s a model of impact-driven philanthropy, where every dollar multiplies into lasting economic transformation for those who need it most.

How to Inspire Others to Donate to Nonprofits

When you give strategically and share your journey, you inspire others to join you in creating meaningful change. Here are a few ideas for inspiring others to give:

Tactics That Work:

• Share Your Research Process: Walk others through how you discovered the organization and what research tools convinced you to donate.
• Lead by Example: Host matching campaigns, organize workplace giving, or start a recurring giving circle in your community. 
• Tell Your Story: Focus on the “why” behind your giving rather than just the “what.” Share personal connections to the cause and specific outcomes you’ve witnessed. 

Social Influence Matters

When people see friends or trusted colleagues giving with intention, they’re more likely to follow suit. This emotional-social appeal strengthens community bonds and multiplies the impact.

The Best Wording to Ask for Donations

How you frame your request can make the difference between inspiring genuine enthusiasm and creating uncomfortable pressure. The most effective approaches focus on shared values and demonstrable impact.

Lead with Values, Not Urgency: Instead of “They really need your money now,” try “I support this nonprofit because their approach aligns with my values.” 

Share Impact, Not Instructions: Replace “You should give to this charity” with “Here’s what they’ve accomplished with my help” and share specific outcomes. 

Invite, Don’t Demand: Use phrases like “Join me in supporting an organization I trust” rather than “This is the only charity worth giving to.” 

The goal is to create informed, enthusiastic supporters who continue giving over time, not to pressure people into one-time donations they might later regret.

Common Questions About Donating to Nonprofits