Recently the Tampa Bay Tribune published an amazing investigation
uncovering America's 50 worst charities. Together, these orgs raised $1.3 billion ...spending $1 billion of it on fundraising overhead expenses. Places like Kids Wish Network distributes just three cents of every dollar it raises on sick kids. Instead, 97% of its funds are spent on staff, fundraising tactics, other overhead expenses, and what looks like a very sweet payday for the founder.
Many have written about the worst charity list and the breakdown of egregious expenses.
People behaving badly in the name of needy children, cancer, and other worthy causes is digusting. (Look closely at the list, most of these orgs fall into those two cause categories.) Some legislators and regulators have taken action to halt these efforts. But lets assume that the IRS and government are not perfect entities. (Dramatic pause.) What can average citizens do to protect ourselves and others from being duped by these entities?
Before you make a contribution anywhere....
1.
Check CharityNavigator.org. This independent entity reviews the IRS filings of orgs, their policies on transparency, etc. Charities are given rating up to 4 stars. The page layout is clean and simple. And, if you want more detailed information, all the supporting documents are posted there too.
2.
Pull their form 990. Every charity registered in the USA has to file this with the IRS by
May 15th (unless they ask for an extension and then the deadline is
August 15th). If you ask for this form, a charity has to share it with you. (You can also pull form 990s yourself by searching
www.GuideStar.org but because GuideStar pulls directly from the IRS, the information there can be a year behind.) Pay special attention to (a) where funds come from (b) the salary section — anything fishy here? (c) distribution of expenses — is everything going to lawyers and fundraising agencies? Reading a form 990 isn't easy. So, not-for-profit legal legend Peter Swords wrote a brilliant piece dissecting the Form 990.
https://www.npccny.org/Form_990/990.htm (It isn't beach reading.)
3.
Call them...but don't ask for the top dog. Instead, speak to someone else on the team. Ask a few questions about the latest challenges the org is facing, how that person spends his/her time, etc. This isn't a fool proof method of examination...but if the financials are making you suspicious, it might be worth having some human contact.
4.
Call a rival. If you are interested in supporting a cancer or children's org, you have more options than a Vegas buffet. And, if you'd take five minutes to peruse the seafood section before diving into the pasta bar, then maybe its worth spending at least 5 minutes comparison shopping before contributing to a charitable org.
5.
Think beyond $. Sometimes massive overhead can be justified. I wrote
a piece for Fast Company a few years ago explaining why overhead isn't always the best marker of impact. It's worth asking an org is you can visit or help in a non-monetary way.
6. Other suggestions? Please leave them in the comments below...
Conscious Capitalistic ENVIRONMENTAL ENGINEER - Purveyor of Life and Planet Saving Technologies
8 年thanks for your insights!
consultant at Techno Tutor
10 年It is cool to see someone pointing out how our wealth flows because as soon as we look at all consequences, the closer we get to realizing our starting point needs to be addressed.
Regional Safety Manager
10 年Great article and very likely this list can be expanded to well over 100+. I would agree CharityNavigator.org is a great resource prior to making your donation and should coincide with the 990. At the same time, I would like to see the flip side of this with the top 100, % to dollar contribution. Maybe cynical here, but I suspect some of the better known, high dollar charities don't make that list either.
Now at Palm Desert Recovery
11 年Good job , the Tribune has done it again ! Act locally !
President at California Business Advisors
11 年Assuming most people here watch/listen to the Ted talks, here is an interesting one on charities, giving, and overhead. https://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html