Before deciding on a specific charity, figure out which causes are most important to you — pick something you’re passionate about. Be proactive and do the necessary research so that your dollars are spent exactly as you want them.

There are several ways you can focus your interests. You can start by asking around. Local organizations and experts can often be a great source of information. For example, talk to doctors if you’ve chosen health care or the leader of your religious institution to find out what organizations they recommend.

You should also check out the numerous websites that allow you to browse charities by mission statement, cause, location, or keyword and read over the helpful tips on giving for those just starting out.

Once you have decided on a course, you can look into charities in that field and see how they compare. The factors you should consider are: how much the charity spends on raising money, administrative costs, salaries and what it ultimately gives away. Also, does the IRS deem it “qualified,” so that you can deduct donations?

All of this information lives in the organization’s financial documents, specifically in the organization’s tax return (Form 990). These are often available on the charity’s website or at one of the services that evaluate charities like GuideStar and Charity Navigator (more on that below).  If you are unable to locate financial documents for charities and non-profits, you can always call and ask for them directly. These are public documents and they must provide them to anyone who asks.

Online services that can help you shop around:

American Institute of Philanthropy: (donation of $40 or more necessary to view information)
Assigns charities grades A+ through F based on financial criteria—a charity’s IRS filings, audited financial statements and annual reports.

Better Business Bureau Wise Giving Alliance: (free)
Has reports on charities according to 20 financial and administrative standards (how much goes to programs, administration, etc.) and issues a seal of approval to charities that meet its criteria.

Charity Navigator: (free)
Rates charities using a range of zero to four stars based on the charities’ fund-raising, administrative expenses, financial health, and efficiency.

GuideStar: (free)
Lists charities recognized by the IRS with tax returns (including CEO’s pay), mission statements, and featured programs.