Holiday Giving for the Thinking Donor

As the holiday season approaches, we think more about ways we can make a difference for others. Many seek opportunities to make donations – but are those donations really making the difference we intend?

It is the responsibility of the donor to research the agency in which they are investing.  Some donors give just to feel they have done “something,” but many really want to know their contributions will have an impact that aligns with their values, kindness goals, and personal mission.  Charitable agencies, like businesses, market themselves for maximum profit.  And like businesses, their marketing face does not necessarily represent their true services or impact. How do you find the right one?

Getting to know an organization’s daily practices, its mission, who is served by them, how their programs truly connect with the need they are designed to address, and faith or political agendas funded by donor dollars are all important aspects of evaluating a charity’s’ integrity and character.

Indicators that donors often use to evaluate agencies include executive salaries and administrative cost. But think about these qualitatively, not quantitatively.

A high salary for agency leaders is not by itself an indicator of a bad organization.  For example, consider a powerhouse fundraising organization that nationally collects and invests billions of dollars a year to support extant programming and create new resources addressing critical needs in local communities. This organization requires top-performing executives for responsible management, and therefore must offer salaries commensurate with the business world to attract those leaders.  One executive’s salary, for example, is $268,426; this is 1.16% of that agency’s expenses, as they manage a revenue of $24,179,099 (FYE 6/2013, Charity Navigator).  How much would the CEO of a private investment firm with $24+ million in annual revenue generally earn?

An agency may save cost by hiring executives willing to work for less. Such a leader may be wonderful – that individual may indeed be a great leader who is also a kind, giving soul dedicated to serve without or with limited means of supporting themselves; or, they may be an underpaid, unexperienced, or ineffective leader, impacting the agency’s effectiveness and how your donations are truly used within the organization.

Rather than making assumptions based on a salary, consider what is required of the executives at a particular agency, the services of the agency they represent, and the track record of the agency.

Administrative cost is also not what it appears at face value.  These costs are necessary – facilities, personnel, and outreach are important aspects of most agencies and create the infrastructure to sustain services over time. Amount of administrative cost can vary greatly depending on the services offered. For example, an organization dedicated to providing medical service for terminally ill children, or one whose primary mission is outreach and advocacy through marketing, would have a different administrative cost appearance than others who may be serving animals through a foster homing program or hosting volunteer-run collections of food to distribute to pantries without maintaining their own storage facility.

Additionally, what is categorized as “programming” can be subjective. For example, let’s think about a university college dean’s office and documents printed there. Imagine we ask them: What percentage of the printing cost in your college is spent on programming for students, and what percent is administrative?  It is easy to blur those lines and not all colleges at that university would categorize items the same way; similarly, we can compare agencies’ admin cost percentages, but should be aware that it may not be an apples-to-apples comparison.

Investigate further when you see organizations that make claims about extremely low admin costs or CEOs that operate for free or minimal salaries.  There are costs associated with living and operating a business which are being paid somehow.  Seek genuine transparency over creative reporting.

Money, like time, is a limited resource for everyone – we only have so much to give, and ensuring the most impactful investment of that resource is up to us.  We can use Charity Navigator, Give.org, GuideStar, MelissaData, Charity Watch, Smartgivers.org, Givewell.org, IRS charity verification, and other research tools, but the best way to know how your investment will be used is to actively engage through service and discourse with clients and staff to get to know what the agencies really do with their programs and funding.  What are their daily practices, how do their programs impact others, and how do they manage donations?

Another indicator often used in evaluating charities is faith alignment. Individuals of all faith and non-faith perspectives may have reasons to seek secular charities when investing donations.

Many religious charities do offer great service to our community, but some of the money may be taken away from the actual charitable mission and directed to the additional mission of proselytization or even political activism to promote religious agendas. In addition, some require clients and volunteers to be (or pretend to be) affiliated with the agency’s faith perspective in order to receive services or participate in programs. Though they take donations from the diverse public, they may re-invest them in a limited demographic. Secular charities focus on their mission of service. The Nature Conservancy, for example, does not use donor contributions to promote a faith perspective – they work to conserve nature.

There are also humanist-focused agencies that include the humanist agenda in their programming. These are important to many individuals seeking to promote inclusiveness for all humanity because of the perceived imbalance in representation and visibility of humanist giving. Humanist agencies and those that openly declare secularism represent and encourage a giving spirit in all of humanity regardless of faith perspective.

Faith perspective decisions are very personal; consider the mission of the agency you are evaluating to determine if they will use your donation in a way that represents your world view.

It is, again, ultimately the responsibility of the thinking donor to consider the impact of their investment. One way to find out how your dollars will be used is simply to ask. Consider interviewing a staff member or administrator at the charity and ask them – what do they need donor dollars for? You may find they have a specific program or initiative currently lacking in funding that you would love to see succeed, and your contribution can make it happen; or you may find that their plans for your investment don’t align with your values and impact goals.

Volunteering with an agency and even sponsoring specific events that benefit that agency allow you to be involved in how your dollars are used. Seeing your investments in action is the most rewarding way to give. For example, sponsor a dinner at a shelter where you are also able to participate in the food preparation and serving.

If you are considering making a charitable contribution this holiday season, give responsibly for maximum positive impact. Your investment in our community makes a difference – ensure it is the difference you want to make. List your values and kindness goals and think about your personal mission statement, then decide what social impact area you would like to support and search for and review agencies that align with your personal integrity and life path.

Those who give money to make themselves feel fulfilled or to simply feel like they have done “something” do make some positive contributions to charities that need their help. But the world needs more people who want to make a real and meaningful impact and who take the time to think about donations as investments. We need thinking donors who are not reactionary givers based on ad misericordiam and other appeals to emotion or fall victim to creative misdirection & manipulation in advertising, but rather who consider the needs in our community and donate in ways that represent themselves and their community well.

Thank you for your interest in making a difference in our world!

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