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TheStreet Open House

5 Charities You Want to Avoid

BOSTON ( TheStreet) -- The holidays are the season of giving -- but experts warn would-be donors to make sure they don't get taken by questionable charities this time of year.

"Sadly, it's the Wild West out there in the nonprofit sector," says Sandra Miniutti of CharityNavigator.org, a nonprofit site that rates charities. "With 1 million U.S. charities and not a lot of laws on the books, it's 'donor beware.'"

Each year, CharityNavigator analyzes some 6,000 nonprofits' Form 990 financial-disclosure statements to see how much each group uses for good works compared with how much they spend on fundraising expenses, CEO pay and other overhead. The website's conclusion: Some nonprofits spend virtually every dime they raise on telemarketing firms to hit consumers up for money by phone.

Telemarketers often get a huge cut of your donation -- with as little as 4.4 cents of every $1 given ultimately going to good works after the charity deducts for other expenses, Miniutti says. That's a far cry from the 75 cents or more that she says well-regarded nonprofits earmark for their stated missions.

"These are charities you want to avoid," Miniutti says. "I think any donor who knew how little of their donation actually went to the group's stated mission would never give in the first place."

Unfortunately, questionable charities often focus on issues "that tug at the heartstrings," Miniutti says. "'Help sick kids,' 'Help your national military heroes,' "Help your local police.' How can you say no?"

Here's a look at the five nonprofits CharityNavigator found spend the highest percentage of their donations on professional fundraising fees. All figures are based on CharityNavigator's analysis of the latest available Form 990s filed with the U.S. Internal Revenue Service.

Miniutti says there's no evidence any of these five groups are breaking the law.

Operation Lookout National Center for Missing Youth
Money going to professional fundraisers: 84.2%

This group gets a zero-star rating from CharityNavigator primarily because the nonprofit's latest Form 990 indicates that the nonprofit spends nearly 85% of its budget on professional fundraising.

Only 9.8% goes toward the charity's stated mission of publicizing photos of missing kids and otherwise helping lost children's families, according to CharityNavigator's analysis.

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