Tuesday, December 10, 2013

What Percentage of Donations Go to Charity?

While we were solving the problems of the world, one of my friends wondered how much money was actually going to the disaster relief going on around the world. This is a time of giving and I thought about this as well. People will not open their hearts and wallets if they cannot be assured that the money they are sending is being used to reach the people in need. I know that I wouldn't and neither should you. I recommend giving to your local Food bank, I know the one I help spends less than 10% on admin costs and receives no government funds.  If you want to donate to other causes I recommend you read this article. The following was taken from an article written by Valorie Delp whp  is a editor, contributing writer and topic expert for LoveToKnow.com 

There are sites such as Charity Navigator that are very helpful in showing you what percentage of your giving goes to support the mission of the nonprofit, as opposed to administrative expenses. Some nonprofits may have quite a bit of overhead, but according to the charity ratings site, if they are spending more than 33.3% of their total budget on overhead, the organization is simply not meeting its mission.

According to Charity Navigator, the following charities are hugely popular with donors.

American Red Cross

The do-gooders at the American Red Cross do a good job of spending your money when you donate. They manage to keep administrative expenses at less than 5% of their total overhead, and they spend 92.1% of their income on actual programs that benefit the community. Whether it's teacher CPR, or managing crisis during the aftermath of a disaster, the Red Cross puts your money to good use.

World Vision

Approximately 85 cents for every dollar you donate to World Vision goes to help stamp out poverty around the world. While they are still well below the 33% benchmark, they tend to spend more on fundraising than other charities. Nonetheless, if stamping out poverty is your passion, World Vision does a good job with your dollars.

Doctors Without Borders

These brave folks at Doctors Without Borders go into the most deplorable conditions to bring healing to others. Your money here is well spent: approximately 86 to 89 cents of every dollar you give goes to supporting the overall mission.

Invisible Children

You may have heard of Invisible Children quite a bit recently. This is the group which produced the filmKony 2012, and started a highly successful social media campaign to spread awareness. The group's goal is to use media and social action to end the use of child soldiers in South Africa, mostly through promoting awareness of Joseph Kony, leader of the LRA. The group spends about 80% of its donations to fund this goal.
American Cancer Society
Probably one of the most well-known charities, the American Cancer Society seeks to educate and support research efforts to help support and improve the lives of those who are fighting cancer. The charity spends about 70 cents per dollar on programs that directly support its mission. This is lower than typically well-rated charities; however, it is also a charity that requires more overhead than most in terms of research facilities and equipment. It should also be noted that the ACS doesn't have a substantial budget for administrative expenses, but does spend about 22% on fundraising annually.

Great Charities That Spend Their Money Well

While these might not be the most popular nonprofits, the following list of charities knows how to get the most bang for their bucks. With less than 10% overhead, these charities will spend 90% or more of the money that you donate on actual goods and services that support their missions.
Whether your passion is art or tapirs in the rainforest, there is a charity that would like to put to use your hard-earned dollars. Choosing a charity can be a hit or miss, though, if you don't do your research. Fortunately, not only are there charity watchdog groups, but charities are also required to file certain documents for public viewing.

Questions You Can Ask

If you find that the charity you want to give to has not yet been rated on any watchdog sites, you can do the legwork yourself. Ask the following questions when you're researching to help guide you on your giving:
  1. Is the nonprofit actually a charity? You can find this out by searching for its 990. This information is typically found on a charity watchdog site; however, you can also visit the Wise Giving Alliance at the Better Business Bureau to see if anything has been filed for your charity. Note that religious institutions such as churches and synagogues typically do not have to file a 990.
  2. Are there complaints against the charity's practices? Again, this information is found easily on the Wise Giving Alliance website.
  3. Do the charity's marketing materials clearly state the problem and explain what they are doing to help? Be wary of charities who drone on about the problem but fail to state what they are doing to help it.
  4. Ask the organization what percentage of donations go to actually support the programs in lieu of overhead and administrative costs. Be wary of a charity that says 100% of donations go to support the cause. After all, there has to be at least some overhead.

Informed Philanthropy

Making informed choices is the best way to make sure that your dollar goes to support causes that you deeply care about. To further ensure that your money is well-spent on a cause that you are passionate about, consider volunteering your time and talents so you can see first hand what happens from donation dollar to the delivery of programs and services.

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