Have you ever given in to an emotional charity appeal, only to wonder where your donation was really headed? Earnest groups of all kinds are helping people this holiday season, with just a few disreputable ones willing to also help you part with your hard-earned money. Did you know that third-party solicitors, in some states, can keep 80 to 90 percent of charitable donations for themselves? A spokesperson for a leading charity watchdog group says you should be prepared to ask a few awkward questions:
1. Where can I see the charity's financial reports?
2. Do you work or volunteer directly for the charity or for a third party?
3. Do you, as the solicitor, keep a portion of my donation? If so, how much?
Meghan Davison is Program Assistant for Charity Watch, formerly known as The American Institute of Philanthropy. She cautions, "Never give to a charity you know nothing about." When she suggested asking for things like IRS reports or other financial data, she explained, "How a group responds can be very telling." Whether or not you end up crunching all the numbers yourself, knowing a group is willing to be transparent adds some level of assurance. Davison suggests avoiding the awkward exchange with a solicitor altogether by giving directly to a charity through its website or mailing a check. She shared the shocking statistic that third-party solicitors can sometimes keep as much as 90 cents out of every dollar. In contrast, when you give directly, you can often count on two-thirds of the money going to the cause. "Generally," explains Davison, "we say that a highly efficient charity is going to be able to spend 75% or more on their charitable programs." Exceptions might include a smaller charity that is less popular, such as a group trying to help with a rare disease, when overhead might show up as a higher percentage of the budget. Larger charities and those led by medical professionals will likely have CEOs with the highest salaries, which should still reflect a proportionate amount of the overall budget. Davison says it's appropriate for donors to hold charities accountable by giving direct feedback about your expectations.
is funded by member contributions in order to remain an independent watchdog group. It summarizes handy information about most charities year-around. You can request one free sample copy of the Charity Rating Guide & Watchdog Report
via email at email@example.com
or by phone at 773-529-2300.
Here are more links to resources from Charity Watch
Writer's note: All of this week's tips on savvy charitable giving got me thinking of the red kettles and ringing bells and smiling children at churches collecting donations for mission this time of year. I hope being informed won't make any of us more Scrooge-like, but rather more informed in order to help with these good causes. For instance, before we round up volunteers to help collect for a cause, we have a responsibility to check into the integrity of that particular organization. Some churches and other volunteer groups have some kind of vetting process already in place. In case they don't, it's okay to ask.
Vetting Charities by The Numbers