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Charitable Giving: Beware; be wise
By Bill Johnson / December 1, 2014

The phone rings and you hear a plea for money to help sick children or disabled veterans, injured policemen - or any number of causes. Is the call legitimate? How do you know if the organization is worthy of receiving your money? You don't.

Fortunately, there is helpful information on the Internet. One of the most helpful web sites is Charity Navigator (charitynavigator.org), which tells how much of your dollar goes to administration, overhead and salaries, and how much goes directly to the services the organization provides. It also reports such information as whether there are independent audits, whether board members are paid and board meetings documented.

For example, after receiving solicitations from the National Wildlife Federation, Planned Parenthood of America, and the Wounded Warriors Project, here's what I learned from Charity Navigator:

According to the organizations' legal filings, Planned Parenthood of America spent 72 percent of money raised on services, 8 percent on administration and 19 percent on fundraising. The National Wildlife Federation spent 79 percent of money raised on services, 9 percent on administration and
Charity
12 percent on fundraising. The Wounded Warriors Project spent 60 percent of money raised on programs, 7 percent on administration and 36 percent on fundraising. (Note: numbers are rounded to the nearest percentage point.)

An investigation of nonprofits by the Tampa Bay Times and the Center for Investigative Reporting concluded with a list of the "worst charities in America." Some with great sounding names simply pay most of the money raised to professional fundraisers. Shockingly, some give less than one cent of each dollar given to actual services. Among the "worst" listed in the 2013 Tampa Bay Times report are Cancer Fund of America, Children's Cancer Recovery Fund, Committee for Missing Children, United States Deputy Sheriffs Association, Defeat Diabetes Foundation, and the International Union of Police Associations. Many others spend less than 10 percent on services, including the Kids Wish Foundation and National Veterans Service Fund. One organization - Survivors and Victims Empowerment Fund - spent nothing on services.

The newspaper also reported public complaints about the Wounded Warriors' CEO's $330,000 annual salary and its salaries of more than $150,000 to 10 other employees.

To learn about other nonprofits, other web sites are helpful as well. Charity Watch is operated by the American Institute of Philanthropy (charitywatch.org), and The Better Business Bureau (bbb.org) also rates charities.

When evaluating these organizations, be careful not to confuse similar sounding names and mistakenly think badly of a good one. Some names are very close to responsible and respectable organizations. To be fair, we should recognize that it does take money to make money. In other words, if you don't spend money advertising, you won't raise as much, and won't help as many people. So charitable organizations that help the most people may also spend a greater percentage of your dollar on administration and advertising.

There are plenty of good organizations staffed with volunteers and professionals dedicated to helping others - organizations that are well managed, honest, transparent and ethical.

With a little effort you can identify them. Be generous, but be wise.




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