There should be a rubber seal in the cap, over the threads of the mouth (white plastic part) where the black top screws on. This is what causes the seal. Make sure the cap is very tight on. The rubber seal should be on the bottom thread, near the bottom of the neck (at least that's where mine is). I have one of these and it's one of my favorite waterers, but at first I didn't realize this needed to be like that and it was at the top and I have the same problem as you're having. I do use mine sitting though - not hanging. I have one that leaked whenever I'd try to hang it - it never worked.
Hope this helps you.