June 24, 2012

6 Steps to Evaluating Charity Finances

By Suzanne Perry

Daniel Borochoff, president of CharityWatch, which grades charities on their financial performance, offers the following tips for spotting red flags when assessing a charity’s finances:

Audit notes

The notes that are attached to audited financial statements sometimes reveal things not found in the Form 990 tax document that charities are required to file, Mr. Borochoff says. They might mention that a charity has made a risky investment or relies on only