What a Charity’s Registration Does and Doesn’t Prove
Registered, tax-exempt, top-rated: each charity label answers a different question. What the checks prove, what New York’s fundraising data shows, what to ask.
A letter arrives in late November from an organization with a warm name and a familiar cause. You look it up, and the name appears on a government list. It feels like a check has been passed. You write the check. Whether you have just learned anything useful depends on what that list actually certifies, and most donors have never had a reason to find out.
Being a registered charity, being tax-exempt and being well run are separate claims. New York’s latest fundraising report shows that even a real, registered charity may see very little of what a campaign raises. The verification habits that work on a scam can miss the case of a legal but lopsided appeal, and it helps to know which is which.
The labels and what each one answers
| Label | The question it answers | What it does not tell you |
|---|---|---|
| IRS tax-exempt status | According to the FTC, the IRS’s search “tells you if your donation would be tax deductible” | Whether the organization spends money well; whether this letter or caller really comes from it |
| State registration | Whether the group or its fundraiser has filed with the state | Approval. New York’s report says registration “should not be construed as approval and/or endorsement” |
| Independent rating | How an evaluator scores its finances and governance by its own method | Whether this particular appeal is genuine; methods vary among evaluators |
| A familiar name | Nothing on its own | Names can be chosen to resemble well-known groups |
That second row deserves emphasis. The disclaimer comes from the New York Attorney General’s report on professional fundraisers, in a 2010 edition, and the wording speaks about registered fundraisers. It captures a general truth about filing regimes: being on a list means someone filed a form. A person checking a registry and treating it as a character reference is doing something understandable, and it is a mistake that the registry’s own language warns against.
The FTC’s guide to donating safely suggests several separate checks: search the charity’s name plus “complaint,” “review,” “rating” or “scam,” use evaluators such as BBB Wise Giving Alliance and CharityWatch, and use the IRS search for deductibility. Reading those as separate steps is the important part, because each covers a gap the others leave. We could not open the IRS tool’s own page during research, so its function is described here in the FTC’s words.
A real charity can still get very little
Here is where the donor’s problem departs from the fraud problem. The New York Attorney General’s latest Pennies for Charity report, released December 1, 2025, covers 588 campaigns run by professional fundraisers in 2024.
Nearly $1.6 billion, up more than $82 million from 2023.
25% overall, more than $395 million in fees and expenses, up from 17% in 2023.
293 of 588 gave the charity less than half of what was raised.
104 campaigns had expenses exceed revenue, costing the charities more than $20 million.
The aggregate and the campaign-level figures tell different stories. A 25% average looks tolerable. Half the campaigns, though, returned less than half of the money to the charity. A small number of very large, efficient campaigns can pull an average up while many others do poorly, the same pattern that makes averages unreliable elsewhere in fraud data.
A legitimate charity can use a paid telemarketer, and the call can be lawful and honest in every respect. A donor who verifies the charity’s registration has confirmed the charity exists. That donor has learned nothing about what share of this particular gift gets there. Data from one state’s filings is only a partial view, and New York’s numbers cover campaigns registered there with professional fundraisers, not all charitable giving.
Why year-end appeals are built the way they are
Giving peaks at a time of year when several forces line up, and it helps to see them as design features.
- A deadline that is real. Tax-year end gives a legitimate reason to act by December 31. Real deadlines are the best cover for invented ones, a point we make in our piece on retail timers.
- Emotion by design. An appeal is meant to move people. That is not suspicious in itself, which makes it hard to tell legitimate emotion from exploitation.
- Prior generosity as a signal. People who have given before may be contacted again. We described how that signal can be used in you gave before, so the prize call feels real.
- Names that lean on trust. New York’s donor advice warns that names can mimic well-known charities.
Verification that matches the channel
Where you are approached changes what can be checked, and New York’s guidance for donors is more specific than most. It sets out questions to ask by channel.
| Channel | What to check | Why this channel is different |
|---|---|---|
| Phone | Ask the caller’s name, which fundraiser employs them, whether they are paid, and what share of your gift goes to fees | A paid caller’s answer is the only disclosure you are likely to get in the moment |
| Verify the organization; be wary of follow-ups about pledges you don’t remember and vague descriptions of programs | A claimed prior pledge is a pretext that makes the request seem like a follow-up | |
| Online fundraiser | Give to efforts run by people you know, check the fees, and confirm the charity approved the use of its name or logo | Anyone can set up a page using a real charity’s name |
| Website | Check that the address matches the organization, unless a separate payment site is clearly being used | A secure connection only protects the transmission, not the destination |
| Be wary of links and attachments | The message could be phishing in charity clothing |
The strongest move available for most channels is the one we would recommend for almost any unsolicited request: leave the channel you were approached on. Don’t use the phone number on the letter; find the charity’s own website yourself and give there. That takes the verification decision away from whoever made the approach, a principle that applies well beyond charity, and that we discussed in the contact record behind a callback. It also tends to cut out the fundraiser’s fee, since a donation made directly usually does not pass through a telemarketing contract.
Payment method is a clear signal, and the FTC is direct about it: “If someone wants donations in cash, by gift card, or by wiring money, don’t do it. That’s how scammers ask you to pay.” It recommends a credit card or check, and keeping a record of donations.
What not to conclude
A piece like this can tip into telling people not to give, and that would be a bad result. Most charitable organizations do what they say. Fundraising costs money, and a high percentage in one campaign can be defensible, for instance when a charity is building a new donor base. A small group that has never run a campaign will look worse on any single ratio than a large one. Be careful about using one figure as a verdict.
It is also fair to note what the data doesn’t cover. Fees are only one measure of whether a charity is worth supporting, and they say nothing about whether its programs work. We have not attempted to evaluate rating agencies against each other, and their methods differ.
A three-question routine before year-end gifts
- Is it really them? Go to the organization yourself, and don’t use anything the request supplied.
- What do the labels cover? Use the IRS search for deductibility, and use a state registry and an evaluator for what each one can tell you. Don’t let one stand in for the others.
- How much gets there? If a paid fundraiser is involved, ask. In New York, check the state’s data on that fundraiser’s track record.
Most of the time, the routine will confirm what you hoped. The occasions when it doesn’t are why it’s worth the few minutes. For anyone helping an older relative sort through a stack of year-end letters, those three questions also turn out to be easier to ask together than the more loaded one, “is this a scam?” The first three questions have answers. The fourth tends to start an argument.
Sources
- Donating safely and avoiding scams (FTC): checks, IRS search description, payment advice.
- Attorney General James Releases Annual Pennies for Charity Report (New York Attorney General, December 1, 2025): 2024 campaign totals, donor advice.
- Pennies for Charity, 2010 edition (New York Attorney General): registration disclaimer.
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