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View Full Version : Which charities give all proceeds to their causes-and which do not?


Guinastasia
11-26-2008, 04:10 PM
In some charities, there seems to be a problem that PART of donations will go to administrative costs and what not-wasn't that the problem with United Way? Which ones are the best to donate to? (My mother usually goes with Salvation Army, but because of their political and ethical views, I'm iffy there)

EmAnJ
11-26-2008, 04:18 PM
Hmmm, not very many, but with almost all charities, you should be able to pull up their annual report online and see what the funds allocation is. I'd say most smaller charities will be more likely to use all funds for the cause, for example, a local animal rescue group (I volunteer for one and it's the only org. that comes to mind for using ALL funds for the cause).

Captain Amazing
11-26-2008, 04:21 PM
Every charity has administrative costs, so part of the donations will always go to adminitrative costs, but you want to make sure the percentage is as small as possible. You might want to look at Charity Navigator, which looks at the efficency and organizational capacity of various charities.

http://www.charitynavigator.org/

Unfortunately for your mom, the Salvation Army, being a church, isn't listed.

Cunctator
11-26-2008, 04:22 PM
I'd be surprised if any charity were able to use 100% of its donations for the cause. They all have admin costs.

Whack-a-Mole
11-26-2008, 04:23 PM
My family has been heavily into charities (as in they work for them) since I was very little.

ALL charities have administrative costs. Someone has to pay the electric bill and office space and janitors and administrative staff and so on.

Any decent charity will be able to provide you with information on what percentage goes to overhead and what goes to their programs.

That said you can restrict your donation by explicitly stating it is to all go to "X" program. The charity has to apply all that money then to that program. Of course that just means they take more of unrestricted donations to pay the overhead so generally balances out. Of course most charities prefer unrestricted donations so they can manage the money as they deem appropriate.

Polycarp
11-26-2008, 04:25 PM
Very, very few give 100% of donations+grants+income from endowments to their stated cause. (A very few get targeted grants or donations to cover overhead expenses on condition that all other contributions go to the cause.)

Your question might be better phrased as, "Which charities expend the overwhelming majority of their proceeds in pursuit of their cause, as opposed to administrative and overhead expenses?" One that Barb actively worked with in the past, Episcopal Relief and Development, had at the time a 97% funding of causes, only 3% going for salaries and publicity (that they were free tenants of the national Episcopal Church's headquarters aided in that). IMO, anything over 87% to causes is doing an outstanding job, and some may be in situations where keeping the charity functional and int the public eye may require a larger percent of contributions than that, while still fulfilling their main purpose as well as possible. Some, of course, pad their own nests at the expense of the charitable goal they ostensibly support.

Notice that the United Way is not a charity per se, but a combined funding agency for multiple charities, which allocates funds from its campaigns to its member agencies, keeping a small percentage as operating costs. To avoid having the Food Bank and Battered Women's Center and Youth Intervention Center and Girl Scouts and Living With Lupus Group and AIDS Intervention Task Force and 17 other groups all begging money and eventually running the well dry, they become members of the United Way and jointly solicit in one large campaign actively supported by most of the community.

Guinastasia
11-26-2008, 04:41 PM
Thanks for the link. I guess I'm thinking of those who use their donations for, oh, I don't know, merchandising, advertising, etc? Rather than actually funding their causes? Does that make sense?

Bayard
11-26-2008, 04:46 PM
If you want to get very detailed information, you can look up a non-profit's Form 990, which is a tax form they are required to file, and which I think might be required to be public. There is a website called Guidestar.com which appears to provide 990's for lots of organizations, but you have to sign up for a free account. Other organizations might make them available on their websites, or you might just be able to google them if you get lucky. I found the 2006 Form 990 for Shriner's Hospitals (here - PDF (http://www.guidestar.org/FinDocuments/2006/362/193/2006-362193608-03ac3929-9.pdf)) by googling. It might be overkill, and finding the 990's for every organization you are interested in would be a big task, but you should be able to find as much detail as you want.

Whack-a-Mole
11-26-2008, 04:49 PM
The downside (if you want to call it that) with the likes of the United Way is administrative costs are taken twice. Once for the United Way and again for whatever charity gets money from them. As Polycarp noted for this some other benefits are obtained (e.g. pooling money together for advertising and so on).

IIRC my mother said 25% or so for administrative costs is about normal and pretty good. While I may be misremembering the exact number on this she is an authority in the area having spent the better part of a lifetime as a fundraising executive and serving on the Board of Directors for the National Society of Fundraising Executives. I'll ask her for more detail next time I get the chance.

Guinastasia
11-26-2008, 04:51 PM
Captain Amazing, the link you gave was VERY helpful-in that it showed the percentage of expenses for the program, and how much was part of salary, and funding, etc. (I'm assuming the blue was how much goes to actual cause?)

Peter Morris
11-26-2008, 04:59 PM
You might want to look at Charity Navigator, which looks at the efficency and organizational capacity of various charities.

That has a fairly small database of charities. You may not find the one you want there.

You can find detailed information about any US charity (except church based ones) at www.guidestar.org
Regtistration is required, (free) but it will give you access to detailed financial information for each charity. However, unlike the charity navigator site it doesn't attempt to evaluate the worth of the charity.

Captain Amazing
11-26-2008, 05:00 PM
Yes, the blue is "program expenses", or, in other words, the percentage of funds that go toward actually supporting the programs the charity runs.

Ferret Herder
11-26-2008, 05:03 PM
Captain Amazing, the link you gave was VERY helpful-in that it showed the percentage of expenses for the program, and how much was part of salary, and funding, etc. (I'm assuming the blue was how much goes to actual cause?)
Yup, that's the case. If you want to see clear differences, check out the graphs for charities like the top one from their Slam Dunk Charities list (http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=3626) (great in terms of expenses and in donor privacy) and one from their 10 Inefficient Fundraisers list (http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=6314). Both of these lists are on their front page, along with others. In the first charity, 98.8% of funds go to program expenses, but only 4.7% for the other charity.

I wouldn't be scared off by a 3-star rating, but 2-star and below definitely merits scrutiny for where they are going wrong.

friedo
11-26-2008, 05:05 PM
The really nice thing about Charity Navigator is that they breakdown both administrative and fundraising expenses. And they show you the "fundraising efficiency." So if a charity spent $100,000 throwing an opulent ball for beautiful people, and they have an efficiency of $0.10, then that means that $100,000 ball got them $1,000,000 in donations.

gigi
11-26-2008, 05:35 PM
Wow, the American Red Cross is at $.04, and 94% of expenses are for programs. Must be because they are so well-known?

even sven
11-26-2008, 06:18 PM
If you are really concerned that 100% of your donation goes towards the cause, you may try the Peace Corps Partnership (https://www.peacecorps.gov/index.cfm?shell=resources.donors.contribute.donatenow). Peace Corps volunteers around the world go through a very involved process surveying their communities needs and drawing up detailed plans for small sustainable projects- things like building classrooms, wells, summer programs for students, agricultural projects, etc. You can look up projects by type and by country.

What you donate will be put directly into the stated project, under the supervision of the volunteer and Peace Corps office. The community involved is also expected to make a contribution- I think it's like 10%, which can be labor, money or materials. This makes sure the community is really involved in making the project succeed.

It's a really good program- no other charitable cause puts so much effort towards making sure their projects are sustainable, appropriate and wanted by their community. And every dollar you donate will go directly to the project. I worked on several projects that were funded this way and it worked out wonderfully for everyone.

Snnipe 70E
11-26-2008, 09:04 PM
The downside (if you want to call it that) with the likes of the United Way is administrative costs are taken twice. Once for the United Way and again for whatever charity gets money from them. As Polycarp noted for this some other benefits are obtained (e.g. pooling money together for advertising and so on).

.


I am no fan of the United Way, do not like the imtimidation that they use in fund raising. They use to claim that only 10% of the funds were used for administration. What that means if I want to give $100 to go to charity XYZ they will recieve $90. If I cut the check directly to the charity they get $100.

madrabbitwoman
11-26-2008, 09:42 PM
As far as I know (and why i joined) 100% of money raised or donated to Lions International goes towards charitable works. All admin costs are covered by the fees paid by members.
I pay for the privilege of volunteering and raising money to help my community.

R. P. McMurphy
11-26-2008, 09:53 PM
Wow, the American Red Cross is at $.04, and 94% of expenses are for programs. Must be because they are so well-known?

The funding for the ARC is so huge that 6% is a lot of money. The ARC has had several significant scandals in regard to their use of funds. Do a search and you will find some discussions about the ARC.

As for the claim that "100% of funds go directly to the aid projects", here is how that works. The Board of Directors underwrites all administrative costs. Therefore, if you donate, their charitable work is dependent on all common donors. Is it a bit disingenuous? A bit. You can say that the the Board of Directors' contribution should be considered in the whole and then a percentage should be derived. OK, maybe so but it shows that the BofD is committed and that money is not being siphoned off for salaries and expenses which is exactly the abuse that United Way was exploiting.

Again, remember, the smaller the organization, the more difficult it is to keep the administrative costs at a low percentage.

A good example is Robin Hood Foundation http://www.robinhood.org/home.aspx

Wealthy individuals serve on the BofD, underwrite the administrative costs and then allocate all donations to worthy charities. They apply principles of accountability in order for the charities to qualify for their support. It's a very good way of donating and minimizing rip-offs. There is someone watching and auditing.

My prejudiced advice, don't donate to United Way and the Red Cross. There are much more efficient and effective organization. A little research will find them.

If you want a couple of recommendations than send me a private message. I serve on a Board and have involvement with such agencies. I demand efficiency and effectiveness.

Guinastasia
11-26-2008, 10:04 PM
The math comparisons are confusing-the stars and charts make it easier. (I'm a complete dunderhead when it comes to math-I'd say border-line retarded almost)

What Exit?
11-26-2008, 10:34 PM
Some small groups have extremely low overhead. As an example Monmouth County Friends of Clearwater has no paid employees and minimal admin costs. Though it depends on what you consider admin cost to.

The groups needs to pay insurance, pay for a phone, until recently printing a newsletter and other small costs. Including tithing a small amount of money to the parent organization Hudson River Sloop Clearwater.

Sometimes finding a small local all volunteer organization is the most likely to spend most of their donations on program. This is not a hit on larger groups though as to run a larger group it is nearly impossible to be all volunteer.

Jim

t-bonham@scc.net
11-27-2008, 02:22 AM
I'd be surprised if any charity were able to use 100% of its donations for the cause. They all have admin costs.And any ones that don't are probably cooking the books to say that.

For example, some say the Board covers all of the admin costs. But then they don't count those Board donations with the other donations. Or they say all the admin work is done by unpaid volunteers, but don't count that volunteer time as a donation.

Others just plain miscategorize expenses so they are not 'admin'. Like sending out lots of solicitation letters, but including a paragraph or so reporting on their work this year. Then listing that mailing cost as 'reporting activities to donors' rather than as a fundraising expense. There are lots of accounting tricks to hide your admin expenses and make them look like program service expenses.

IMO, a functional charity should have admin expenses of 25-35% maximum. And minimum should be 7-10%; anything less than that and they are playing games with their accounting.

Canadjun
11-27-2008, 08:44 AM
For example, some say the Board covers all of the admin costs. But then they don't count those Board donations with the other donations. Or they say all the admin work is done by unpaid volunteers, but don't count that volunteer time as a donation.

Both of those exceptions would not concern me as a prospective donor. It seems to me that if a prospective donor is deciding whether to donate to a charity they are likely concerned about how much of their contribution is going to administrative costs, i.e. if I give the charity $100 will the beneficiaries of that charity (not sure beneficiary is the right word; can't think of how to phrase it at the moment) get a full $100 more than if I had not?

What Exit?
11-27-2008, 08:46 AM
For example, some say the Board covers all of the admin costs. But then they don't count those Board donations with the other donations. Or they say all the admin work is done by unpaid volunteers, but don't count that volunteer time as a donation.
...
I don't understand this part. If the group handles admin work without using any donated/grant money, how is that anything but a positive in terms of the question that Guinastasia asked?