Every year, Americans donate almost $350 billion to charities. But it is difficult to know where that money goes. Some charities are notorious for spending large percentages on donations on operating expenses. Some charities, no matter how well-meaning, simply don’t do much good. And, in the worst cases, some charities actually undermine the causes many of their donors mean to champion.
If we value giving to charity, how can we be sure our money is being well-spent on causes we support?
1. What does the charity do?
Finding out what a charity does—or claims to do—is fairly simple. Any fundraiser should be able to tell you, or you can usually find the information on the charity’s website. Charity Navigator is another great resource with the mission statements for most charities clearly listed in one place.
2. How does the charity accomplish its goals?
Sometimes a donor and a charity don’t see eye-to-eye on how a charity should accomplish its goals. For example, I’m happy to give money toward the March of Dimes, whose goal is “to improve the health of babies by preventing birth defects and infant mortality.” I’m not sure I’m okay with their support of human embryonic stem cell research to meet their goals. On the other hand, some charitable organizations with religious roots spend money lobbying on social issues that don’t seem especially relevant to their stated goals.
It’s easy to see whether a charity’s vision matches your own, but it takes a little research to find out whether you want to financially support their means of achieving that vision.
3. Where does the money go?
Some charities spend more money on overhead than others. (I once worked at a non-profit that spent an unseemly amount of money on Puerto Rican rum for fundraising events.) When you choose a charity, make sure your money is going where you think it is. Forbes.com has a list of America’s top charities for 2012 ranked by “charitable commitments”—the percentage of donations spent directly on furthering their charitable mission.
4. How effective is the charity at achieving results?
Even for the people who work for them, it is almost impossible for most charities with broad goals to measure their success in objective terms. But that doesn’t mean you can’t look at what they hope to accomplish and whether or not they are doing it.
Any effective charitable organization should have concrete, measurable goals. Look on a charity’s website or talk to its fundraisers to learn how well the charity thinks it’s able to meets its own objectives. Use your own discretion about whether it is fairly assessing its own progress.
My Favorite Charities
Over the past decade or so of giving my own money to charity, I’ve found a few favorite causes I champion.
Catholic Relief Services
(92 cents of every dollar goes to serving those in need)
(88 cents of every dollar goes to serving those in need)
I prefer to donate to Goodwill in kind, by donating items I no longer use, and by shopping at their stores. Retail store profits account for almost 70% of Goodwill’s annual budget.
I really like making micro-loans because I can spend the same money over and over again helping to make people’s lives a little better. If you’re interested in giving Kiva a try, e-mail me at email@example.com for a free $25 trial coupon code.
There is no better way to insure accountability for your charities than to give nearby. When you invest in your own community, you are not only helping your neighbors, but also making your neighborhood a happier, healthier, and safer place to live. For example, I donate to our church’s food pantry, our local National Public Radio Station, and the Friends of our local library. I also make in-kind donations to the school where I work.
What are your favorite charities? Let us know in the comments.