(Memphis) There's even more reason to investigate before you donate. A list of America's 50 Worst Charities is out, and five are based in Tennessee.
Some of the charities are names you might know and causes close to everyone's heart. However, these are charities researchers say are doing more receiving than giving.
"Only about 4 percent is making it to the people in need," says Kendall Taggart, a reporter with the Center for Investigative Reporting.
Taggart explained, "We started out looking at about 6,000 organizations that use outside fundraising companies, so telemarketers, direct mail firms, and then we wanted to zero in on the worst of the worst."
Those organizations, according to Taggart, spend more money on hiring companies to call you and ask for money.
Let's say you donate $5 -- by their math, the bad guys spend $4 on professional solicitors, which means only $1 goes to people in need.
According to the report, a good rule of thumb is well-run charities put no more than 35 cents of every dollar toward fundraising. The "worst" spend more than 80 cents of every dollar on fundraising.
The Cancer Fund of America, based in Knoxville, sits at #2 on the list. According to the research, the organization has raised more than $98 million over the past 10 years, but given less than a million in cash aid.
We showed the list to some ladies in downtown Memphis.
"I'm glad to see none of my organizations are on this list," said Kirsten Mauthe.
Mauthe says she only donates to charities for which she volunteers.
How can consumers find charities that spend wisely?
Watchdogs say reputable charities typically raise funds in house. Taggart says if someone calls, "Ask what their name is, ask if the person calling you is a volunteer or employee of the charity."
Also, ask about the percentages that go toward the cause and if money is used locally. Then hHang up, do additional research and give directly.
It's also important for consumers to find out if states have taken any disciplinary action against a charity.
Here are some additional resources: