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I remember hearing a rumor a long time ago about those who raise funds at stop lights by collecting change and dollars that they only have to give a certain percentage. I've done some googling trying to hunt down this amount... but I imagine there might be some legal terminology that would be helpful in this search.

How can I find out how much these folks have to give to the actual cause they're claiming to raise funds for?

Specifically I'd like to know about Kentucky.

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State and federal laws, including the IRS, differ on what percentages charities can legally spend on administrative costs. The best place to look for what exactly a non-profit spends its money on is to look at the publicly available IRS Form 990 for that charity, which is a required filing for each non-profit. A good site for that kind of research is GuideStar. You can search for Kentucky based non-profits there.

A good article about reading 990's is Reporting Nonprofit Operating Expenses | Nolo.com.

For general ratings of established state and nationally recognized charities, you can check any number of sites, such as CharityWatch, Charity Navigator, and an article at Consumer Reports.

Of course, much street corner fundraising is entirely private and unregulated, such as car washes for schools, medical needs and other personal expenses, and not affiliated with any national organization. I'd assume that anyone fundraising for a national or state organization will be required to have ID and paperwork that shows their affiliation; but again, those laws will differ from state to state.

And of course, GoFundMe type fundraising has some safeguards against fraud, but again, they are very new due to the nature of the Internet, and can be very unregulated.

For Kentucky laws and non-profits, see Charitable giving - Kentucky Attorney General for state laws, and the Kentucky Nonprofit Network.

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