Charitable giving-pick one or try to spread it around?

I don’t have much to give each month, but I try to send a small amount to 1 or 2 charities, mixing them up, every month. But I think maybe it would be better to give a larger fixed amount to 1 each month. All are involved in the same work I support, but jeez Louise, there’re so many. Do you think just sending one larger amount every month would actually be better?

Some charities are better at managing their funds and efficiency than others, so spreading it around means you’re more likely to hit one of those and some of your donation may go to waste.

If you have access to the audit data for them, picking the one that is most effective and efficient in delivering the service is probably better ‘value for money’, but that’s probably not the only consideration, as charities are all a bit different from one another in what they do.

I respect your commitment to giving.

My opinion is that it’s better to give more to the best single charity committed to your objective. There are transaction costs for each donation a charity receives, whether it’s credit card fees, check cashing fees, or the labor to process either. You can minimize the transaction costs by minimizing the number of donations.

Charities also tend to lease and publicize their donor records, and other charities begin to solicit donors who give to similar causes. Giving to twice as many charities gets you on roughly twice as many target lists. I don’t need the junk mail.

I agree with Mangetout - it’s better to give one bigger gift than several small ones. Especially as you’re giving to charities that do the same sort of work. Because…

  1. One big gift is better spent. Every charity will have unavoidable processing costs for handling your donation. Split that donation across multiple charities and the same processing costs apply to each fraction, eating away at the total amount left. E.g. if it costs a charity 50 cents in banking fees to process a donation, then giving $10 to one charity leaves $9.50 to go on the work you want done. Giving that same $10 to 5 charities leaves $5 for actual good works.
  2. Efficiency matters. The easier it is for a charity to get the money it needs, the less time and money it has to spend on fundraising. The more you can give them at a time, the more efficient you make them.
  3. Scale matters. The more money a charity has at a given point, the more options they have on what to do with it. It might be better for a community charity to, for example, buy a more fuel-efficient heating system for their draughty hall than to keep paying high fuel bills. But they need the cash to make that upfront payment, and the more you give them at a time, they better placed they are to do that.
  4. Back your judgement. If you’re giving one big gift, you only have to find one charity you believe in and trust to do good works, not two or three.

Alternatively, one can send money to Kiva (a crowd source lender), which distributes interest-free microloans to whomever you choose in any country you choose. I’ve never had anyone default on my loans, and when the money comes back, you can just choose another person/group to lend to. It’s truly a gift that keeps giving. Since it’s a loan, it’s not a charitable deduction on your taxes, but that’s not the purpose of charity anyway.

To me it would depend on the size of the charity. If we’re talking say the WWF vs ASPCA I don’t think it matters. If we’re talking two different local/regional shelters one bigger gift to just one would probably be my choice.

Second. Our county hospice group was a blessing to my wife (and to me) in the months before she passed. I donate once or twice a year to them. Every other attempt at solicitation (cancer, breast cancer, police, veterans, youth basketball, etc.) is greeted with, “Sorry. I support my local hospice group and all my charitable giving is to them. I can’t help you.”

This is my approach too, though I donate to two charities rather than one. I grew up pretty poor, and though I’m not anymore, I’m still concerned about people having enough to eat because not knowing that there will be something for dinner is scary. So I about equal amounts to the local food bank and Heifer International - that way I know that people here get enough to eat, and people far away are given the means to make a living and get enough to eat there too.

I’d do it according the time-honored class-action settlement model. I’d give one-cent-off coupons to all the poor people and pay ten million dollars to lawyers and accountants to distribute it.

The most tax efficient giving is a large block of appreciated stock/mutual funds. You don’t have to pay tax on the gains, but can deduct the entire value of the donation. With the larger standard deduction starting this year, there’s a lot of people who won’t be itemizing every year (like, almost all married couples who don’t regularly give away tons of money), and will do better to give all in one year and itemize deductions and then give none the next.

I also have sympathy with those that mention transaction costs, as I do some data entry for a charity that we do the accounting for. While it’s mostly automated, there are a few things, especially paper checks, that can sometimes take more time processing than they seem to be worth. Even with online donations, with the way we get them into QuickBooks, the cost per transaction starts going up significantly once there are over around 100 a day because of a specific issue with QB that causes the time to process things to increase quadratically with the number of items in a deposit. Larger organizations that get way more transactions per day presumably have better automation processes, but it’s still something I would be conscious of. There’s also the thirty cents per transaction that the credit card processor takes along with a percentage of the transaction, which really makes giving anything less than $10 rather wasteful (since I never see anything lower, that might be the minimum transaction amount).