It’s easy for a charity to claim it’s using your money on programs and raising money efficiently. Charity Navigator is even stricter, reserving its top scores for organizations that spend no more than $20 for every $100 raised. Using these methods, a well-run charity can bring in $2, $3, $4, or more for every $1 it spends on fundraising.Ĭharity Watch, another charity watchdog group, rates an organization as “highly efficient” if it spends no more than $25 for each $100 it raises. They minimize the amount they spend on each call or letter, and they direct those calls and letters to the people who are most likely to give. The best charities use their fundraising dollars much more efficiently. In that case, the entire fundraiser would be a pure waste of time and effort. For example, if an organization spent $10,000 on a fundraiser that brought in only $10,000 in donations, it would end up with no more money than it had before. Efficient FundraisingĮven if a charity spends only 5% of its income on fundraising, that money isn’t well spent if it doesn’t do a good job raising funds. Food banks and food pantries typically fall into this category. Some organizations rated by Charity Navigator spend less than 3% of their funds on administration and less than 5% on fundraising. However, these costs don’t have to be high. Likewise, without administration, it would have no way to process those donations and direct them toward its programs. Without fundraisers, it would have no way to bring in additional donations. Of course, a charity has to spend some money on administration and fundraising. If you want your dollars to have as much impact as possible, donate to charities that do the same. And 7 out of 10 use at least 75% of their funds for that purpose. The charity watchdog group Charity Navigator says 9 in 10 charities it rates put at least 65% of their funds toward program expenses. If you donated $100 to one of these charities, only $4 would go toward the cause you want to help.įortunately, most charities are more efficient with their funds. The rest goes toward their own costs, such as paying staff, renting offices, and sending mailings. It also has to be able to show that it’s using your money for that purpose.Īccording to Consumer Reports, some so-called charities devote as little as 4% of the money they raise to their actual programs. It’s not enough for a charity to say what it wants to do with your money. Checking out a charity’s programs lets you see what it does with donations and decide if it’s worthwhile. Or it could create friendlier hospital environments for children with cancer. It could provide monetary relief for cancer patients who can’t work. But a good one can tell you which specific weapons it’s using in the fight.įor instance, the charity might fund research into new treatments. Any charity can say its goal is to fight cancer. Its only programs were “get to know each other gatherings” between citizens and the police, and it hadn’t even spent any money on those.Įffective charities can draw a clear line between their stated mission and their daily work. But that foundation had no connection with the movement. Some charities have lofty-sounding goals, but they have no actual programs in place to achieve them.įor instance, BuzzFeed News reported in 2020 that people and companies had donated millions to the Black Lives Matter Foundation to support the Black Lives Matter movement. When you give money to a charity, you should have a clear idea what it’s going to do with it. Your money will do the most good in the hands of a charity that has a clear purpose, uses every dollar as effectively as possible to support that purpose, and has effective oversight to prove it. However, within any given category, some charities do a better job than others. No matter how wisely a charity uses its money, there’s no point in giving to it if its goal is to support cancer research and yours is to fight climate change. The most crucial thing about any charity you give to is that it supports a cause you believe in. It only takes a few minutes to check, and it can mean the difference between doing real good with your charitable donation and having most or all of it go to waste. So if you’re donating your hard-earned money to a charity, it’s worth taking an extra step to ensure the one you’ve chosen is going to put it to good use. For example, the FBI warned in 2020 that many supposed charities for COVID-19 relief were really coronavirus charity scams. However, if you simply donate to the first charitable organization you find, your money may not achieve this goal.Īt best, the organization might waste a good portion of your donation on costs unrelated to its cause. When terrible things happen, it’s natural to want to help as quickly as possible.
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