Holding Back from Donating to Charity

LMacaron Mama on 10/02/2016 - 21:44
Last edited 11/02/2016 - 11:17 by 1 other user

Any one else refrain from donating to charities knowing that the full amount donated doesn't reach the intended recipient(s)?. This is what actually holds me back. I keep reading stories that say less than half of every dollar gets passed on; rest goes to admin fees and salaries. Shane Warne recently shut down his charity after a "funds mismanagement". I know all charities have costs like any other business but still..

Also do you give to people on the street or random strangers who approach you asking for money?. Again, makes me uneasy if I donate only for it to go to drugs or alcohol. Stereotype maybe but you never know.

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  watwatwat on 10/02/2016 - 22:32

  +4

  I never give 1 cent to charities because as you say, less than half goes somewhere and usually that somewhere is a waste.

  Secondly, I never give 1 cent to homeless people because they spend it on drugs/cigarettes/whatever other garbage.

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    Macaron Mama on 10/02/2016 - 23:22

    +1

    Good to know some one feels the same. I so feel bad but at the same time it's money I worked hard to earn and it's terrible if it gets wasted.

  • 

    Donaldhump on 11/02/2016 - 12:19

    +2

    maybe a homeless person generally just needs some food. so buy them a sandwhich next time they ask you for money

    • 

      Jugg.Judy on 24/02/2016 - 20:15

      I was going to say that.

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    Sarge2401 on 12/02/2016 - 17:43

    plus one the buy them a sandwich and a coffee or tea. And I usually try and give to older rather than younger. I have a soft spot for family and would hope that no matter how it happened someone would look after my grandparents/parents.

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  Ithinkimtheking on 11/02/2016 - 04:36

  Yes

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  the-mal on 11/02/2016 - 07:27

  +6

  Good charities give >80c in the dollar directly to their cause (eg not into wages, operational and admin costs).

  Investigate your charity before donating, all decent ones will list their financials prominently on their website. For instance here's the financial breakdown from The Smith Family that clearly shows 82c in every dollar goes directly to supporting disadvantaged children and their families (with full financial reports).

  Also check their info on the ACNC website if you can't find their financials on their own sites.

  There are a lot of flashy charities that spend a heap on marketing and admin but there are a lot more who are run incredibly lean and maximise the distribution of your donation so it helps their social cause.

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  mskeggs on 11/02/2016 - 07:57

  +6

  Charity costs do vary, and there are some charities which make poor use of funds. I won't call them crooked, but they tend to have priorities other helping the needy. In my experience, those charities that promote the name of the founder are sometimes in this camp.
  The Charities and Non-profits commission has a relevant fact sheet about charity expenses:
  https://www.acnc.gov.au/ACNC/FTS/Fact_administration.aspx

  In short, there are a number of factors that determine whether charities are effective. Consider a charity that offered medical help to needy people. They could rely on volunteers to apply minor first aid and use 100% of funds for band aids and panadol, or they could use some of their funds to employ doctors who could address many more serious issues, but would necessitate 'overheads' with their employment.
  Or to use a real example a charity worker gave me; following a disaster, they can arrive with suitcases full of cash, spend it all locally on food and medicine to help, and have extremely low overheads. Unfortunately, they help few people because local prices are high after a disaster because supply chains are interrupted and local victims are bidding up prices too, in competition for scarce resources. Or the charity can rent a fleet of trucks from the capital city in the more developed country next door, fill them with material sourced from the unaffected markets at normal prices, then hire drivers to transport this much larger set of supplies to the disaster area. So many more people can be helped, and there is no impact on the scarce resources in the affected area, but the charity just incurred substantial expenses for trucking and drivers, making their overheads look worse.
  So expenses aren't a very clear way to measure effectiveness.
  However, some methods of fundraising are clearly more costly than others. For example, I understand that the company who employs touts in the street to sign you up for monthly donations effectively take the first year's donations as payment, which I suspect they would rather keep quiet.

  The ACNC provides a database of financial reports from charities in Australia which is useful for examining the performance of, especially smaller, local operations.
  There is an American site: http://www.givewell.org/ that rates charities for effectiveness that may be of interest, but you should understand their rating priorities, it isn't just who spends the least on overheads.

  My recommendation is to research the charities who provide the help that you most wish to give, and identify the one that is most effective. Then arrange a regular donation, allowing them to have a steady stream of funds that they can include in their budget, so they can better plan how they give support.
  I still give when there are major appeals, but I feel my donation can be most effective if it is targeted and regular, so this giving makes up 90% of my charity.

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    brazen00 on 11/02/2016 - 13:05

    +1

    Good post mskeggs.

    I second checking out http://www.givewell.org and understanding how they rate charities. Personally I'm using their recommendation and making a donation to AMF this year.

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  eatwell365 on 11/02/2016 - 07:57

  +2

  "Right is right even if no one is doing it;
  Wrong is wrong even if everyone is doing it."

  I praise OP to raise the awareness of the differences but also mindful not to give myself an excuse not to donate or give for good cause.

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    Peck on 11/02/2016 - 12:18

    EXACTLY. I do not expect charities to have zero overheads. I have selected a couple of charities where >80% filters through to their causes, and I support these as much as I can. That way my conscience is reasonably ok. Certainly you should do your research, but banging on all of the time about charities' overheads will only harden your heart.

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  Baysew on 11/02/2016 - 11:11

  +1

  See also discussion Which Charity? on OZB from this time last year.

  This also made me aware of point mskeggs makes. - The effectiveness of the donation is also important.

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  troy1976 on 11/02/2016 - 11:35

  +2

  I've slowly come to this view myself. Here's what I've learned:

  • Don't ever donate through door knocks or people on street. Most of these (if not all) do not even have a direct association with the charity but are contracted out. Most of them have agreements where a significant part of your donation for at least the first year or two goes to the collection agency and NOT your charity.

  • Don't sign up for ongoing donations. Most charities I have found make it exceptionally difficult to stop them. How? Making it impossible to do it online (you have to ring a number and you WILL be put through no doubt psychologically tested methods to try and persuade you not to cancel) and having forms that read as if you are committed to pay so you think it's a legal document of some sort. Not fair!

  • Definitely investigate the % going to 'admin'. The number of even quite small charities where the 'CEO' pays themself $200k to 500k a year is frightening.

  • Make sure your phone has a 'block' feature for calls. Even 'respectable' charities will pursue you relentlessly for future donations or hand your details on to other charities. I had a set of calls coming in for some time where the number was the same 4 digits followed by 9001, 9002, 9003… as I never answered. The interstate prefix was the 'giveaway' and a quick google has always listed these numbers in the 'charity/sales/insurance' type calls.

  • Accept you don't really know how your money is being spent. Glossy brochures don't really tell you how it plays out on the ground. I personally have erased several charities from my 'possible donation' list when they are discovered using the money to push political/social views instead of actually helping people. The only way to avoid this is to actually find people or causes you can donate your time or money to directly. It's actually more rewarding too.

  EDIT:

  • Also to add - I don't like the hard sell sales tactics used by a lot of charities these days. This ranges from the accosting on the street but even down to things like their forms having 'preset' amounts where, say, the minimum donation will be $50. Obviously if you resist they effortlessly say "oh, how about $30" but the intent is to make you feel like somehow $50 is the minimum and you are a 'bad person' for not having that to give.
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    [Deactivated] on 12/02/2016 - 17:38

    I don't even entertain people who stop me on the streets.

    If they are giving out money, too bad for me. I hate unsolicited requests.

    As an asian the whole world already thinks I'm cheap, and this post probably reinforces that.

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  [Deactivated] on 11/02/2016 - 11:38

  What's worse is the people on the city streets who try to engage you in conversation. I believe these guys generally work for marketing type (imo scam) companies who give a really small proportion of the donations to the actual charity and claim the rest as operating expenses. The charity isn't going to turn down any money regardless how much others are profiteering from collecting it.

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    eatwell365 on 11/02/2016 - 12:46

    backpackers' job

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  lupiter on 11/02/2016 - 11:45

  +2

  The other option is to go local. Donate to the local fund for kids disabilities support, or homeless shelter, or at-risk teen mentoring programme, or wildlife rescuers, or school library. These are often small enough that you really can know what is going on, and there's normally plenty to choose from.

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  scupper on 17/02/2016 - 13:41

  What about charities for scientific research? Or the fire brigade? Or your local library or school? Does your concern for efficiency or misuse of funds also dissuade you from donating to these type of charities? Especially for those organisations local to your community, it should be much easier to gauge the value and effectiveness of their efforts and vet their deservedness of your charity.

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  grasstown on 22/02/2016 - 22:08

  if you donate to cold callers or sign up to plans on the street, less goes to the charity, as they get a cut of the first years donations etc. charities use these private companies to pull in donations as otherwise they would get nothing, so yes a lot goes to the private companies doing to cold calls. I don't know why charities do not just employ their own cold callers or train volunteers to cold call.

  so if you seek out a charity and donate direct, more goes to them, as you aren't paying a private company fees.

  if you donate to a crisis appeal, red cross and Oxfam have them on the site, eg Syria, tsunami etc, 90% goes to the need.

  this year I have given half of my money that I previously allocated to charities to non tax deductable people in need. I have made direct bank transfers to accounts. I don't ask how it gets spent, I don't know if im being scammed. i don't believe i am. i see when people don't have enough. I have given to startups that I think are trying to solve a social issue. I buy the big issue magazine as it lets me interact with the sellers. choosing who to give to is no longer about tax deductibility for me and I think i am motivated too by the admin fees involved in charities.

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  Topdog on 23/02/2016 - 09:09

  Ill give to homeless, even if its for drugs or alcohol, Who am I to judge, I only spend my pay packet on drugs and alcohol, But will not give to the charity's on the street. I dont want to be a part of a ceo's fat salary, or there massive xmas parties.