How Do I Choose Who Gets The Charitable Donation?

December 18, 2007 4:46 PM

How do I choose between two equally worthy charities to receive my donation?

Today I was making out some year-end donations to a number of charities. Some of them are organizations I have supported for quite some time, and a couple are new ones that I have learned about due to life experience this year.

One of the areas that I decided to add to my giving this year is animal-related charities, specifically organizations that support animal shelters and animal adoption. But how do I decide which one? To choose from, I have both national and local versions of the Humane Society and the SPCA, as well as a number of other very similar and worthy organizations.

I've looked up a couple of these organizations on Guidestar, and quite frankly, I don't understand what I'm looking at. I don't know how to read an IRS Form 990 and I don't want to learn. I'd love to see a pie chart for each group that showed me a breakdown of where their money comes from and how they spend it, but I didn't see that online. [Maybe it's in the Guidestar "beta" version reports that didn't work in my browser...?] What am I missing? Or is there a better web site to look for comparison information, since Guidestar seems to be geared more to philanthropic professionals than to the general small-donation public.

And of course, it's not just this issue, but on a greater scale, how do I choose among competing worthy causes without having to spend an undue amount of time educating myself about each charity involved?

There are a couple of other issues (hospice, for example) that I wanted to donate toward where I ended up choosing a national seemingly-reputable education-oriented group in lieu of a local care provider.

Please note: This question is not seeking advocacy on behalf of any particular charity. Rather, it is seeking insight on how to choose among worthy charities. If your comment seeks donations to any particular charity, it is not answering the question. Ultimately, what I want is a method to help me identify a handful of organizations that I feel really good about, and to whom I can donate for years to come.

posted by Robert Angelo to grab bag (10 comments total)

Ask people who are passionate about the subject at hand. Do you know any animal lovers? Ask them where they think you should send your money and then do so. I also prefer charities that employ friends. This isn't any kind of nepotism; I figure if my trustworthy friend works for them then they themselves must be trustworthy. This seems to work well and it lets me do some good without becoming an expert in every cause du jour. Gaving a personal connection to the charity at hand can also have benefits if you do decide to get more involved.
posted by nixerman at 4:54 PM on December 18, 2007

Also, pick one where a gift could be matched and your money goes farther in support of the organization.
posted by Ironmouth at 4:55 PM on December 18, 2007

Have you tried Charity Navigator? Its reports are easier to read and seem to be more what you're looking for than Guidestar's are.
posted by phoenixy at 5:09 PM on December 18, 2007

For animal charities, I looked at the root cause of some of the problems that led to pet overpopulation. I had a problem with lots of ferals in the neighborhood I purchased a house in a few years ago. I found that no shelter would help me place the animals (some were tame, mostly abandoned animals that were socialized). Every shelter blew me off and said they were too full. I was finally referred to a small organization run by a couple of people doing TNR (trap/neuter/release). They helped me tremendously with the animals I had and helped me financially by paying the vet to get them all spayed and neutered, and now I have not had any new kittens in a long time. This saves me the heartache, but more importantly, it is saving animals being born only to die in shelters, and it saves my community money that would be spent on animal control, round-up and most likely euthanization. I eventually reimbursed them for all the money they spent on neutering and spaying the cats I caught, and continue to give to them when I can afford it. I looked at where would my dollar do the most good? I say it does the most good in spay/neuter programs. Look for smaller places that do a lot of good in your community that might not have fancy websites and name-brand recognition. Pretend you are a potential client of the charity and see how you are treated and that might give you a lot of insight in to whether or not you want to support them as a cause and send them your hard earned money.
posted by 45moore45 at 5:38 PM on December 18, 2007

This is a hard one--and I don't know of an easy solution. FWIW I work for a nonprofit foundation, animal related, and study other nonprofits in my spare time. I don't put a lot of stock in websites like Guidestar or Charity Navigator just because the way that they grade the efficiencies of a nonprofit are not always the best for all of the different organizations out there. I know this first hand because the foundation I work for lost its 4-star rating on charity navigator because we spend a lot on development. What Charity Navigator doesn't measure is that 100% of our annual donations go to program and the money we spend on development and administration comes form our endowment.

You said that you wish that you could see a pie chart that breaks down revenue and expenses for the organizations that you are considering. You can typically find this in an organization's annual report (which most sizable organizations have available for download on their website). If not, then the website or a quick phone call should inform you where an organization spends its money. And, if you call a charity and they hesitate to give you any information you ask for--I'd strongly consider giving elsewhere.

I think that nixerman is on the right track, though. I would probably go with the organization that has the best street cred in that industry. How do you find out? Ask around, keep asking around. Do some research. I'm sorry that there isn't a simpler way. Kudos to you for becoming an educated donor.
posted by fieldtrip at 6:37 PM on December 18, 2007

I am a fundraising professional. I tend to run on a bit. Following is a course in responsible giving.

In general, if you are giving to local charities, or to local branches of national charities but which manage their own local campaigns, probably 80 to 90% of your gift is going to direct services, with only that small percentage to non-program overhead and fundraising costs (which also need to be funded, so don't turn your nose up at it. Your hundred bucks might be paying for lunch where they schmooze a $100,000 gift). The media are hugely overfocussed on "how much of your money goes to services." These stories do enormous damage to legit nfps, because it makes people think we're all crooks. This kind of abuse really only happens (yes there are probably exceptions) in national campaigns that are run by for-profit events managers, doing things like national AIDS, Breast cancer, etc campaigns. Even there, most reputable, well known charities like ASPCA, Susan Komen, even Red Cross (which made some really bad choices a few years ago) can be trusted to use your gift in the way you intend. Stay away from cause-related mega events run by places like department stores; these are marketing campaigns, not charity.

The 990 pages you want to look at are:
* the page noting "board compensation" If this looks like more than expenses to get to meetings, be suspicious
* the first or second page showing the charity's actual bottom line. In a major metro area, up to $500K is tiny (might not even make it onto Guidestar)-- they really really need your help and will treat you like a king for a hundred bucks; up to $2.5M is mid sized-- you'll still get pretty personalized attention; over that and they won't give you the time of day for under a grand, or more. The bigger the budget, the less of your money is going to services, because they'll have a bigger infrastructure to support (not that there's anything wrong with that).
* if the organization includes it, look for functional breakdown of expenses. You want to see no more than 20% to fundraising (this would be high, but not unreasonable depending on what they include). Overhead might be as high as 50% because not all agencies will break out program overhead. So other than the fundraising number, functional expenses can be misleading. However, it's another place to look.
* See if they include sources of revenue or revenue breakdown. Arts organizations tend to get about 50% of revenue from gifts and 50% from earned sources like ticket sales; social service can be as high as 90% from gifts and grants; I don't know about diseases and animal agencies, but I would imagine it would be similar to social service.

But if you're really concerned about it, stick to local small and midsized organizations that do all of their fundraising in house. This is the safest way to know your money is going to programs and not into some consultant's pocket.

Make sure the organization is a 501-c-3 and that it is registered with the state as a public charity (usually through the Secretary of State office).

The law also protects you. If you specify, in writing, how you want your gift to be used, the charity must use it in that way. In practice, if you're making smallish gifts ($500 or less) they are probably not tracking it penny by penny, but if you're talking bigger bucks, speak to the development director and ask how they can help you understand how your money is being spent. I send specific annual reports with full financial disclosure to every donor who gives us $1,000 or more. Yes, I include pie charts.

At any rate, how much of a gift are we talking about? If you're giving someone $10,000, okay do your homework, meet the people and make an informed choice. If you're talking about $250 bucks, just relax. This seems like an awful lot of work and just more distrustful than your level of giving warrants. You're going to make some poor development officer absolutely batty. I'd like to stress that donors should try not to be overfocused on "where the money is going." Your money will be used in the best way that agency can use it to further their mission. Whether that's splinting up a kitty's broken leg or schmoozing up a major donor, the vast vast vast majority of nonprofits are managed by "true believers" who want your dollars to reach the mission.

Whew! Congratulations to everyone who made it to the end of that!
posted by nax at 9:01 PM on December 18, 2007 [4 favorites has favorites]

Also, on preview, what fieldtrip said.
posted by nax at 9:02 PM on December 18, 2007

I second fieldtrip's caution on the Guidestar / Charity Navigator thing and recommend just asking around. Local nonprofits get reputations, particularly among people working in the field. So, ask a couple vets or animal lovers.
posted by salvia at 9:23 PM on December 18, 2007

Thanks to everyone who answered; all of you are "best answers" as far as I'm concerned. Based on your feedback, I'm deciding to look at local charities where I can get a better sense of what is being done and follow along (in person, in "street cred," in reading local media, etc) to see what's up.
posted by Robert Angelo at 8:22 AM on December 19, 2007

Also, although the cautions from fieldtrip and others about Charity Navigator reports are well taken, the information provided there is certainly easier to read than on Guidestar. I think I'll look at that for the lay of the land, so to speak, but not necessarily rely on their ratings system.
posted by Robert Angelo at 8:25 AM on December 19, 2007