Giving to charity: how do you know where your money is going?
I like to donate to charities. I am helping others. I feel good about myself. I get a tax receipt. Up until now I’ve chosen the charities I do donate to haphazardly: someone I know asks me to sponsor them in a bike ride; or I come across a good cause on the internet or in an article in the newspaper; or a friend or family member is affected by a specific cause. Sometimes I just pick it because it’s in my community and I hope I’m helping those around me.
During Good Deed Month in December, I wrote about The Science of Good Deeds and that doing something nice for someone else decreases your stress levels and helps in your physical and mental health. I also found the more you do good deeds, the more those around you will want to help others out, and vice versa. This refers more to actual volunteering and physical interactions, but can also refer to helping from afar (such as donating money or objects) if you feel a direct connection with the cause.
If I have the money to spare, I can only see the good in giving it to others in need. I never really thought about how much of what I donate goes to the actual cause, though. I knew administration took some of it, but I never really thought of that being my money. I donated to Habitat For Humanity last year and they recently sent me an e-mail saying they were ranked an A+ in overall charity efficiency in MoneySense Magazine’s review of Canada’s largest 100 charities. That took me to the MoneySense website and I started looking at all of the charities and their ranking. I am a bit in shock. Why are people being paid over $350,000 to work for a charity? How is it possible that in some cases less than 50% of the money raised goes towards the program or that it costs over $50 (in fundraising costs, etc.) to raise $100? There has to be something wrong with this model.
This list refers only to Canadian charities, but whichever country you live in, I’m now realizing how important it is to research what your money is used for before you give to anyone. Some of the organizations I have donated to in the past are on this list and haven’t received very good grades in efficiency and transparency. I work hard for my money and I don’t have a ton of it. When I choose to give some of those dollars away, I fully expect some of it will go to the people who are working hard to make that charity run. They of course have to make a living as well, and are doing it in a very honourable manner. But I don’t think anyone should be earning hundreds of thousands of dollars. And there’s got to be a way to cut the costs of fundraising. Isn’t there? Am I just being naive?
I am still going to donate money, because I believe in helping other people, but I’m going to do a bit more research of who I sign that cheque to from now on.