Many people wonder just where their money is really going when you make a donation to charity. Now, a new rating system has been developed by MoneySense Magazine that offers some good advice for donors.

MoneySense created the Charity 100 rating system for anyone who wants to know how their donation dollars are being spent. The rating grades charities in four categories:

  • Program spending efficiency
  • Fundraising costs
  • Governance
  • Reserve fund size

"People's fear is that the money is not being used properly, that it's just going to pay for administrative costs, salaries, admin. It's just getting chewed up and being used by the charities to support themselves, rather than to actually do the good that it's supposed to do," said Sarah Efron of MoneySense Magazine.

The United Way of the Lower Mainland got an A+ rating because over 82 per cent of its spending goes to programs.

"I think it's healthy for charities to be put under a little bit of scrutiny, you know, it takes some time to respond to the questions, but it's healthy discipline. It makes organizations look at themselves and make sure that they're doing the right things," said Yuri Fulmer of the United Way of the Lower Mainland.

By comparison, the BC Cancer Foundation, which raised nearly $40 million last year, got a D rating.

"Only 59 per cent of their expenditures are going to the charities that do the work on the ground to support patients and to do research, and that's very low," said Efron.

But BC Cancer Foundation officials say that's not the whole story. More than 20 per cent of their donation money is being held in trust for endowments and future research projects.

"Our administrative, our overhead costs are eight per cent and we know that that's not only above average -- that's near the head of the class in our category," said Douglas Nelson of the BC Cancer Foundation.

MoneySense editors say if your charity of choice gets a low grade, ask why.

"If your charity is not getting a good score, look on their website, read the material, and if you have questions, phone them and ask what's going on," said Efron.

MoneySense reserves its highest grades for charities that spend less than $10 to raise $100. It argues that galas and lotteries are not efficient ways to raise charity money because they cost too much to organize and hold.

When it comes to other B.C.-based charities, the BC SPCA got an A rating for overall charity efficiency. The Terry Fox Foundation gets a B rating. On the flip side, BC's Children's Hospital Foundation gets a D rating and so did the VGH and UBC Hospital Foundation.

To see where your favourite charity ranks visit the Money Sense Charity 100 ratings.

With a report from CTV British Columbia's Lynda Steele