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What to consider as you donate to a social justice fund

It's easy to donate to a social cause or crowdfunding campaign, but it's not always clear where those funds end up.

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Related video above: How to avoid coronavirus scams

It's easy to donate to a social cause or crowdfunding campaign, but it's not always clear where those funds end up. Or maybe you're stuck after sifting through all these worthy causes, deciding which one deserves your help first.

To help you navigate the world of giving, the following experts weighed in:

  • Amanda Stewart, an assistant professor and non-profit researcher in the Department of Public Administration in the School of Public and International Affairs at North Carolina State University
  • CNN's Impact Your World team, which rigorously vets non-profits and GoFundMe campaigns.

"I personally think of donations as lining up the right things," Stewart told CNN.

Here's how to vet and verify your cause and get started giving.

Select a cause

So, you've decided to open your wallet. Hopefully, you've selected a cause you care about — two relevant ones right now are coronavirus relief and racial justice.

Established organizations can be found on Guidestar or Charity Navigator, sites that collect financial reports to help you make a more informed decision about non-profits themselves.

Many smaller and newer non-profits don't have profiles set up yet. Don't count them out just yet, though.

Look into its mission

Once you've chosen a cause to give to, dig a bit deeper into its reputation.

Read the charity's mission and see if it aligns with your own. Who does the charity serve, and what service does it provide? If it's not clear, look into some alternatives.

It's also helpful that the non-profit you've chosen is registered as a 501(c)3, which means the organization is tax-exempt and charitable — and your donation is tax deductible. This makes your taxable income lower, so you'll pay less in taxes, too.

And before you commit, look up what other people are saying about the non-profit — does it have a good reputation among donors? Can you find anything about misused funds? If not, carry on.

GoFundMe campaigns are a bit trickier to verify. Anyone can start one, but the money goes to the person or cause it names. If the person who started it isn't associated with the cause, that money should still go where it's meant to because GoFundMe handles the money from start to finish.

Fraudulent campaigns are fairly rare, the company says, but your donation will be refunded in the case your campaign isn't legit.

Dig into the finances

This part can involve reading a tax form and doing some math.

If your chosen organization is on a charity watchdog site or has a Form 990, an IRS form that discloses tax-exempt organizations' financial information, you can look at the financial health of the organization. Did they spend more than they brought in? You can also compare the charity's total expenses to the programs and services it delivers.

To calculate the percentage of your donation that goes back to the cause, follow the equation Charity Navigator uses. It's meant to give you an idea of the charity's financial efficiency.

The Better Business Bureau recommends this percentage should be at least 65%, so if you give $100, $65 of that would go to programming and the remaining $35 would go toward overhead and administrative costs needed to keep the non-profit running. Any percentage lower means the cause isn't getting the full benefit of your donation.

And if a charity doesn't disclose their financial information, reach out and ask for it. Tax-exempt non-profits are required to provide their three most recent Form 990s if you ask, per the National Council of Nonprofits.

"With your donation, you are now the organization's stakeholder, so they have a vested interest in you, as you have in them," Stewart said.

There's mutual benefit in keeping that relationship a healthy and trustworthy one.

Some organizations are so new that they don't have that financial information readily available. Reach out to organizers and ask for some more details about where your money will go and how much of it will go back to the cause, if you're concerned. If they're not as transparent as you would hope, you may need to pick a new non-profit.

Be wary of fees

Writing a check or sending funds directly to a non-profit is best to avoid fees, but some charities only accept payment through a third-party platform.

If you're donating through a platform like ActBlue or GoFundMe, they should disclose whether they keep some of the donation. This is often treated as a credit card processing fee, and it should be easy to find (ActBlue, for example, passes the 3.95% processing fee to organizations on the platform, and makes money when donors tip).

GoFundMe gives you the option to cover the fee so your full donation will go to the cause.

And with that, you're ready to get giving.