How to make sure your charitable giving really gets to those who need it

I recently came across an article published by the Tampa Bay Times that listed America’s Worst Charities. They did an extensive study of charitable organizations. Many are great and do good works, but there are also many that raise lots of money but do little to help the causes that they promote. In their study, the 50 worst charities they identified had raised over a billion dollars in the last 10 years and of that money less than 4% went to help those for whom the money was donated.

charitable givingWhere charities go wrong

There are several ways that charities can go astray.

Disorganization

In many cases, while the folks running the charity may have good intentions, they are not so good at accounting. Money is wasted because of poor management.

Fundraising costs out of control

Some charities pay telemarketing companies large amounts of money to perform fund raising for them. While these telemarketers may actually be able to raise more money for their clients the end result is that a large percentage of the donations coming in are consumed by the telemarketing fees. In one of the cases highlighted by the Tampa Times, the charity went from $15,000 in annual donations to almost 7 million dollars. The problem is the charity only netted about $500,000 out of that 7 million. In their eyes they defend the choice to use the telemarketing firm by virtue that they went from $15,000 to $500,000 in benefits to their cause. But if you were one of those donating would you be happy that less than 10 cents of every dollar you gave actually went to the cause?

Money raising organizations

Along similar lines, sometimes charities are devised as simply fronts for massive telemarketing, fund-raising machines. Large amounts of money are raised to the profit of the telemarketing organization, while a token amount of money is passed to the bogus charity.

Sound alike charities

Some less than reputable charities fool people into giving to their cause by choosing a name that sounds similar to a more reputable charity. For eexample, one of the charities in the Tampa Times list of 50 worst charities is called Kids Wish Network. The charity is supposed to be granting wishes to dying children. In reality only 2.5% of money donated actually makes it to the fufillment of wishes. But, probably all of us have heard of the Make-A-Wish Foundation and the wonderful work they do. By choosing a name and a cause that is similar to a reputable charity the Kid’s Wish Network can use that perceived credibility to raise additional money.

Fraud

And sadly sometimes charities misuse dollars simply because of out-right fraud. There have always been con men with little scruples who take advantage of the well-meaning but naive. Through the years many of these con men have found fertile fields in the area of charitable giving. This is as much true today as it has ever been.

So should I give up on giving?

If there are issue with fraud, how can I determine if my giving really is making a difference? Should I just give up?

As a Christian, obviously I think giving should be a key part of your financial plan. I believe the scriptures teach that the first 10 percent of your giving should be given to your local church. In addition to that 10 percent I think it is very healthy and proper to find causes that God has laid on your heart that you want to give to. Even if you are not coming from a faith background, giving back to those less fortunate should be a part of your financial game plan.

But we also want to make sure that our giving dollars really get to those who are needy. As a Christian I also believe that all we have really belongs to God anyway. He allows us to manage those resources for him. Some of those resources can be used for our comfort and pleasure. But some of them should be used to benefit those around us. If we give to an unscrupulous charity however we are not really being very good managers of the money that God has entrusted us with.

So how do I find a good target for my charitable giving?

So how can we be good stewards of those resources and make sure that our giving matters?

Reputation matters

Give to organizations that have good reputations. Organizations like the Red Cross or The Salvation Army have long well established track records. Just make sure you are giving to the real thing and not a knock-off fraud like the “Kids Wish Network” I mentioned earlier.

Do your homework

There are a number of online organizations that you can use to check out various charities. While not all of these will give you a black and white simple answer, they generally provide financial records you can view to get an idea of how much overhead the charity actually has. In some cases you can review complaints that have been lodged against the charity. Some of the more popular sites are:

You can use sites like these to check out the charity before you give to it.

Give where you serve

Another great way to make sure your charitable giving counts is to give to an organization where you are already serving. Not only are you donating your money but you are donating your time as well. By being actively involved you’ll have much better insight into how those funds are used.

Don’t let a few bad apples spoil the bunch

Yes, there are unscrupulous charities out there. But don’t allow a few con artists overshadow the good that most charitable organizations perform.

The important thing is to be wise in your giving. I truly believe God blesses those who are generous. Not that we give out of some sense that it will cause God to give us more, but I do believe that when we demonstrate a generous heart God will honor that. At the same time though we also need to be wise stewards of those resources and make sure that we are giving to organizations that really are making our world a better place.

 What ways do you use to make sure you are giving to reputable organizations?

Photo credit: HowardLake (creative commons)

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