Review: The American Institute of Philanthropy (A Charity Watchdog Organization)

Corey —  September 24, 2009 — Leave a comment

       I’m a big proponent of careful and wise giving to make sure resources are used most effectively. There are many charity watchdogs, but after careful analysis I prefer The American Institute of Philanthropy (AIP) over the rest. Here’s why:

AIP Strives for Independence

       AIP does not charge the charities it reviews and accepts absolutely no advertising in its publications or on its website. Heads of nonprofit organizations are excluded from their board of directors to prevent conflicts of interest. Over 95% of their support comes from individual donations (which provide membership and a subscription to AIP’s Charity Rating Guide). This allows AIP the freedom to speak openly and to be critical of unethical practices in the charities they review without fear of losing funding.

AIP Uses Stringent Review Criteria

       AIP’s standards for evaluating charities are considered the most stringent among charity watchdog organizations. They carefully review the financial information of each charity using audited financial statements. This information has been verified and reported by a third-party outside of the charity. This helps AIP see how charitable gifts are really spent. When rating a charity, AIP considers how much actually goes to charitable programs, effectiveness of fundraising efforts, and years of available assets.

AIP Reviews a Wider Range of Charities

       Other charity watchdog organizations will only review charities that are required to file Form 990 as required by the IRS. They will request audited information from religious charities and social welfare groups (like the ACLU, Human Rights Campaign, National Right to Life Committee, and the Sierra Club). These charities and groups are not reviewed by other popular charity watchdogs like Charity Navigator. For example, AIP is the only place I can find a review of one of my favorite charities, Mennonite Central Committee.

AIP Provides Valuable Tips and Reports

       You can find a list AIP’s top-rated charities and their grades for free online. You can see a list of all the charities they review here. A donation of at least $40 is required to become a member, which will provide you with their triannual Charity Rating Guide where you can read reviews of all the charities. Additionally, they provide several free articles about charities and their practices as well as valuable tips. Check out their article on tips for giving wisely to charities or seven tips for reducing unwanted solicitations.

Do Your Homework

       AIP does not screen charities for certain values (religious or otherwise) – they only look at how effective the charities are at using the money they receive. I think their top charities list is a good place to start. But if you want a charity that also follows your values, you’ll need to do further research on your own. I’ll be looking at some of the top-rated Christian charities in future posts. Sign up for free updates to Provident Planning if you want to get future articles in your email or feed reader!

Corey

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Corey is currently pursuing a Master of Arts degree in religion. While he enjoys learning and writing about Christianity, another one of his new passions is writing about personal finances in order to help others make wise decisions with their money.

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