Your money's worth: Before you open your wallet, look into the charity's finances and operations.

• Author: Kinder, Peri
• Position: Giving to Charities

It seems that during the holidays, dozens of charities ask for cash and donations. And who doesn't want to help the homeless, feed the hungry or give coats to children? But how do you know the charity you donate to is using your money wisely?

A good place to start is Charity Navigator.The country's largest nonprofit evaluation site assesses thousands of groups nationwide to determine if they do what they say they do. Using a four-star rating system, Charity Navigator utilizes two key points to determine the performance of nonprofits, helping donors maneuver through the 1.6 million charitable programs available.

Americans donate $300 billion each year to charities, and 75 percent of that total comes from individuals. That number has stayed constant over many years, but new nonprofits are always entering the arena, vying for their share.

"The level of giving doesn't change much in America. The pie isn't getting bigger, but charities are competing for their slice of the pie: says Charity Navigator Vice President Sandra Miniutti. "With Lall that money flowing, there will always be thieves trying to get their share."

Fiscal Responsibility

A nonprofit's financial health is the first level of scrutiny at Charity Navigator. Using seven metrics including the analysis of program expenses, fundraising efficiency and revenue growth, evaluators figure how much of a charity's budget is spent on pertinent programs and services. Data show nine out of 10 charities spend at least 65 percent on program expenses, and seven out of 10 spend at least 75 percent. Any organization spending less than one-third of its funds on programs is given a zero-star rating.

Matt Minkevitch is the executive director of The Road Rome, which operates the largest homeless and emergency shelter in the state. The nonprofit has received a four-star rating from Charity Navigator for eight consecutive years. Working with a $9 million budget, Minkevitch employs a transparent approach to donations, reviewing financials each month and creating internal procedures to keep an eye on the operation.

"We get incredibly generous contributions, and it's always a humbling experience: Minkevitch says. "I have never gotten over a little kid bringing in his or her piggy bank as a donation."

Overseeing funds from government programs, foundations, corporations and individuals can be daunting, but he understands his position as keeping the public trust by transforming those donations into measurable...