Since most of my readers fit this bill I thought I’d offer a little assistance in helping learn how to ensure that your charitable donation has maximum impact, especially since the holiday season is right around the corner.
First of all, not all charities are managed well.
For every dollar donated, good charities will use 80 cents or more towards their charitable purpose, while the rest of your donation pays for fundraising costs, administrative expenses, and management salaries.
On the other hand, for every dollar donated to a bad charity, as little as 40 cents (or worse) will go towards the charitable purpose. The rest of your donation will pay for a poorly managed or inefficient bureaucracy, perhaps with the involvement of too many for-profit middlemen in the fundraising efforts.
To get the biggest bang for your charitable buck, be careful to donate to a good charity, not just to a good cause.
Sites which rank the efficiency of charities with regards to how much of a donation actually goes towards the cause:
- Charity Navigator
- Charity Watch
- BBB Wise Giving Alliance National Charity Reports Index (Only nationally prominent charities)
Second, think with your head, not your heart.
There is an infinite supply of people who will say almost anything to get you to hand over money to them. And, as PT Barnum rightly said, since there is a sucker born every minute – there is no shortage of reward for conning people into supporting less-than-deserving “charities”.
Since helping others is a socially responsible thing to do, let’s not forget that the duty of those being responsible is to ensure the legitimacy and worthiness of the recipient. Therefore, a few rules which should be enforced with vigilance:
- Never, never, ever donate to a charity soliciting funds via the phone or e-mail. Ever.
- Organizations engaging in this method of fundraising very often use professional telemarketing organizations to solicit funds.
- The telemarketing firms (for-profit companies) usually take upwards of 70% of each donation as a bounty.
- Even if someone calls or e-mails representing a well known charity, you have absolutely no way to be certain that they aren’t just scammers.
- If they get a hold of your credit card number you could be ruined. Most legitimate organizations are aware of this risk and therefor do not solicit funds in this manner.
- It should be obvious that this does not apply to your neighbor’s kids selling Girl Scout’s cookies, etc. But be wary of young adults claiming they work for some organization selling magazines to “help others”. They have polished and tested stories that are complete fabrications, so don’t fall for them. Those people are for-profit groups.
- This rule would also not apply to local charities that you support that let you know in advance that they will be in the neighborhood picking up used articles of clothing, etc. But make sure that you recognize them before leaving goods for them to pick up.
- People approaching you on the street have probably deserve a PhD in psychology from their experience alone. It’s a numbers game and they’ve adapted their story and learned the best “look” and lines that will be most profitable.
- It is a natural instinct for many to hand over a little cash to help someone else, especially if they haven’t done anything charitable in a while. It feels kind of good, and it’s easy to tell yourself that you are doing the right thing and helping others. But you know that money isn’t going to be used wisely, so resist the urge and make a mental note to give to a deserving charity if you haven’t in a while.
- Look at it this way. If your child or brother approached you on the street begging for cash would you just hand them a dollar and walk away? Probably not. You’d probably be quite upset with them and force them to get some help, get a job, or whatever was situationally appropriate. Don’t treat strangers any differently.
Finally… a few good ideas.
Before you can help others, you first need to think very hard about two important questions:
- Where do I want to focus my resources?
- How much am I willing to commit to this endeavor?
Personally, I tend to want to focus my charitable giving to achieve one of two results; support a life-changing need, or bring people joy. I also tend to support local community needs before national needs because it enables me to see more of the direct impact and have greater visibility of the results.
For those that are serious about charitable giving, I recommend seeking out opportunity directly in the following ways:
- Attend a local city council meeting and approach the Mayor and city council members with your desire to help. These people are always plugged into the local community charities and can make great recommendations as to how you can help. You can also make some useful contacts for the future.
- If you are a member of a church, talk directly to your minister, cleric, Sherpa, or whatever you call your pastor, to determine if there is a family or project you can help support. Don’t settle for just talking to someone else, the minister will know where the greatest need is.
- Find the local battered women’s/children’s center and find out how you can help. Victims of domestic violence are among the most needy and worthy of assistance anywhere. These are people who can only be helped by others and for whom receiving assistance can be a life and death matter.
- NOTE: If you decide to do this please keep in mind that these organizations are very protective and secretive out of necessity. You can make a tremendous difference, but be prepared to prove your intentions before being welcomed to the party.
After deciding where to focus your attention, you are also going to need to set the limits at which you can afford to provide support. For example, if you decide to support battered women that doesn’t mean you can afford to become a stop on the underground railroad.
Set a budgetary limit and stick to it. Depending on how generous you intend to be, I would recommend initially giving in small increments and evaluating whether you agree with how the donation is spent.
Donors have the right to understand, and even direct, how funds are to be used so don’t be shy about taking an active role. If you are unhappy about the results talk it over with the leadership of the charity, or find another that more closely mirrors your values.
To sum it all up…
Don’t expect to feel like a hero or be worshiped as a benefactor just because you donate your time or money to any organization. It’s not going to happen. Charities generally get by on an endless series of donations, and yours will be only a link in that chain (unless your a Gates).
Instead be diligent in your choice of where to spend your charitible dollars, ensure that the funds are being used in a manner consistent with your wishes, and then sleep well knowing that you made a real difference in someone’s life.