Best Charities for 2021

For the 39th time in the past 41 years, charitable giving increased year over year in 2019, according to Giving USA. Americans donated a total of $450 billion – $310 billion of which came from individual donors. Despite the COVID-19 pandemic, forecasts call for a further increase in charitable giving in 2021, when the final figures are tallied, but much depends on how generous we feel this holiday season. ’Tis indeed the season for generosity, as a significant portion of all charitable donations are usually made in the month of December.

There is no shortage of noble causes in need of support this year, especially considering the devastating impact of COVID-19 on many people’s health and finances. No one wants their money to go to waste, though, so it’s fair to wonder which charity will make the best use of your donation.

To help you maximize your impact without jeopardizing your financial health, WalletHub compared more than 200 of the most prominent U.S. charities based on their financial performance, transparency and popularity. We also identified the best organization to donate to for each of the most popular causes.

Here are the best charities to donate to:

 

Below, you can learn more about how to choose the best charity for your holiday donation as well as how to do the most good on a limited budget. You can also take a closer look at criteria we used to select 2021 top charities in the Methodology section that follows.

How To Choose A Charity

• Find A Cause First: It’s not about the charity but rather the work that it does. So make a list of the causes you care about most before researching specific organizations involved in that area. This will help you avoid losing the forest for the trees, emphasizing the beneficiary over the conduit.

• Ask For Recommendations: People trust reviews from friends and family above all else, so ask your social network for some charitable suggestions. You may even want to ask subject-matter experts for their thoughts. For example, your veterinarian could suggest a good animal-related charity, and an environmental scientist at your local university could suggest a climate-oriented organization. All of their experiences and viewpoints will undoubtedly help you make a better choice.

• Do Your Research: It’s always important to do your due diligence before spending money with a company, professional or nonprofit for the first time. So check your chosen charity’s website, see how it’s being covered in the press and look into its financials. In particular, check how much of the organization’s funds are being used for its stated cause compared to marketing and administrator salaries.

• Spread The Love: You don’t have to pick just one charity. Donations are kind of like crowdfunding in the sense that a lot of people giving small amounts leads to relatively large sums at the end of the day. Don’t try to solve one problem all by yourself – consider giving small amounts to numerous charities in order to help address the various issues that you care about.

5 Tips For A Successful Donation

You don’t need to do much to make an impact on a worthy cause. But keeping the following pointers in mind will help you and your charity of choice make the most out of your good deed.

1. Have A Budget: It is indeed possible to be too generous. Donating more than you can afford will only hurt your finances, making it more difficult to give back in the future. That means overdoing it now could reduce your overall giving.Consider your holiday gift-giving budget and your other financial obligations to determine how much you can comfortably afford to do without. It’s fine if you can’t give much. Every little bit helps, and something is always better than nothing when it comes to charity.

2. Decide On Itemized Deductions: Rationalizing a donation with the potential tax benefits doesn’t make much sense if you aren’t going to itemize your deductions. So make a decision about that now, and remove taxes from your thought process if you’ll be taking the standard deduction. You can check out our Tax Tips for more insight into making these sorts of choices.

3. Consider Processing Fees: Making a donation by credit card is a great way to earn rewards while giving back. For example, you could earn $20 by making a $1,000 donation with a card offering 2% back, whether in the form of cash, points or miles.Many organizations charge a processing fee for credit card donations, though. That can erode, or perhaps even eliminate, your earnings if it isn’t tax-deductible, so make sure to check.

See 2021's Best Rewards Credit Cards

4. Earmark Funds For Something Specific: The more you donate, the more control you’ll be able to exert over how the funds are used. So if you want your donation to be used to improve the conditions of the cages in an animal shelter rather than administrators’ salaries or marketing, for example, inquire with your organization of choice about the possibility of designating a donation for something specific. If they say it’s not possible, take your donation elsewhere (or at least make clear that you’re willing to).

5. Don’t Forget About Goods & Services: You don’t have to give money to make a difference. You can also donate clothing, food and even your time. A lot of people actually wonder whether it’s better to donate time or money, and we have a handy calculator that can help you make that decision based on your personal situation.

Scores For All Charities, By Category

 

Ask the Experts

In search of additional information to inform your charitable giving, WalletHub posed the following questions to a panel of experts. You can check out their bios and responses below.

1. What is the biggest mistake that people make when donating to charity?
2. What red flags should people look for before donating money to a charitable organization?
3. What is your favorite charity and why? // Why should someone donate to your charity?
4. What are the biggest challenges facing US-based charities in the current economic environment?

Methodology

To identify the year’s best charities for holiday giving, WalletHub evaluated more than 200 of the highest-ranked U.S.-based charities, according to CharityWatch and Charity Navigator. In the interest of promoting goodwill and spreading holiday cheer during what should be a merry time of year, we did not consider nonprofit organizations with an obvious political affiliation or those focused primarily on a politically divisive issue.

Using the grading rubric listed below, we scored each organization for which ratings were available from both sources from 0 to 100, with 100 being the most trustworthy with your money. Based on the resulting final scores, we selected winners for some of the biggest categories of charitable giving.

CharityWatch Grade (40 points max)

• A+ = 40 points
• A = 35 points
• A- = 30 points
• B+ = 25 points
• B = 20 points
• B- = 15 points
• C+ = 10 points
• C = 5 points
• Below C- = 0 points

Charity Navigator Score (40 points max)

• 97% - 100% = 40 points
• 93% - 96.99% = 35 points
• 90% - 92.99% = 30 points
• 87% - 89.99% = 25 points
• 83% - 86.99% = 20 points
• 80% - 82.99% = 15 points
• 75% - 79.99% = 10 points
• 70% - 74.99% = 5 points
• Below 70% = 0 points

Program Expenses Score* (15 points)

• 85%+ = 15 points
• 75% - 84.99% = 10 points
• 65% - 74.99% = 5 points
• Below 65% = 0 points

*Reflects the percentage of an organization’s total expenses that are used for its stated cause.

Organization Popularity Score (5 points max)

• 500K+ Facebook Likes: 5 points
• 300K – 499K Facebook Likes: 4 points
• 100K – 299K Facebook Likes: 3 points
• 50K – 99K Facebook Likes: 2 points
• 25K – 49K Facebook Likes: 1 point
• Fewer Than 25K Facebook Likes: 0 points