Stories of nonprofits that spend the bulk of their budgets on expenses and a relatively small percentage for their cause have created a high level of distrust. Bob Ottenhoff of GuideStar, which compiles data on nonprofits, says, "The era of assumed virtue is over." Many people who donate want to ensure their money is going for its intended purpose.
Figuring that out is not always so easy. As I explain in my report for the upcoming special NBR series "A Guide to Giving," the IRS 990 disclosures don't always tell the whole story and ratings from groups like Charity Navigator or Give.org may not measure what you care about most.
Many people will give when solicited. It pays to do some basic checking before you open your wallet, so you don't get caught at a weak moment. Senator Charles Grassley, who has been investigating charities for several years, told me he donated to some of the veterans charities that have been under fire recently for spending more on salaries and expenses than help for soldiers.
But we shouldn't fear giving. Doug White, author of Charity on Trial, advises doing your homework before you give and asking a charity what would happen if they no longer existed. The group should have a compelling story to tell you. How much do you check out a charity before you give?
Comments
I believe charities are essential, but not where mailing lists are sold. My wife has three (3) charities (Christian Children's Fund, St Jude, and Heifer Int'l) which regularly benefit from her limited disposable retirement income. She has been deluged in the past three or four months with "gimmee" letters from a host of what seem unrelated parties. The practice of selling lists for leads may seem practical at first, but is in itself UNcharitable and such unsolicited mail is a turn-off.
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Someone needs to look at the Boy Scouts of America. Alot of the local councils spend over 70% of their budget on salary, employee benefits and expenses for their paid executives. Councils are selling their scout camps which was land donated years ago for scouting in order to ensure they have money set aside for future payroll. The reason given is cost consolidation yet most of the camps actually make money or break even. All labor projects are volunteer labor and supplies are usually donated. I know of at least 3 camps sold in the last year. The councils preach poverty to sell the camps and then build million dollar council buildings where the paid execs sit and plot their next moneymaking scheme. The scouts hit the streets in the fall selling popcorn of which the council gets a pretty good percentage. The United Way has been generous in the past to our local council but have become wary as to how the money is spent. None of the money donated ever gets down to the troop/boy level where support is needed the most.