Charity Navigator is a highly-rated independent organization that evaluates the financial health of the largest charities in America.
Specifically, Charity Navigator's rating system examines two broad areas of a charity's financial health -- how responsibly it functions day to day as well as how well positioned it is to sustain its programs over time. Each charity is then awarded an overall rating, ranging from zero to four stars. To help donors avoid becoming victims of mailing-list appeals, each charity's commitment to keeping donors' personal information confidential is assessed. The site is easily navigable by charity name, location or type of activity and also features opinion pieces by Charity Navigator experts, donation tips, and top-10 and bottom-10 lists which rank efficient and inefficient organizations in a number of categories.
So, if you're thinking about donating to a charity, consider checking out their scorecard first.
Bear in mind, there are a million charities in the country and they haven't been able to rate them all. Just because a charity isn't listed doesn't mean it's not worth donating to. But how do you know a charity is taking good care of itself and its cause? Charity Navigator also has guidelines on how to evaluate a charity not listed on their site.