Donating, With Care
Sunday, November 19, 2006
Americans give generously, but that charitable spirit recently has been under assault.
High-profile scandals at United Way and the Nature Conservancy, along with criticism of the Red Cross's response to Hurricane Katrina, have fed a growing unease about big-name nonprofit organizations. Today, 71 percent of the public thinks charities waste too much money, a recent New York University survey found, up from 60 percent three years ago.
Individuals gave $199 billion of the $260 billion that charities received last year, about 76 cents of every $1 collected, and the bulk of it came from households with incomes of less than $100,000. Excluding $5.83 billion in one-time donations for victims of hurricanes, earthquakes and other disasters, and adjusting for inflation, individual giving last year was stagnant, dropping 0.1 percent.
Worries about the economy and rising energy costs could explain that, according to researchers at Indiana University, but others point to mistrust as a factor.
Feeling singed by the recent troubles at charities, many people are thinking twice about where their money goes and aiming more of their dollars at grass-roots groups close to home.
"I stopped giving to the United Way awhile ago because of concerns about abuses and the amount of money that gets siphoned off for administrative costs," says Donna Lee Yesner, a single mom in Bethesda and a partner in a law firm who now focuses her giving locally. "I was discouraged, and I didn't know where else to give."
Yesner found an alternative two years ago, when a friend asked her to join Many Hands, a newly formed group of more than 100 women who each contribute $1,000 a year and then collectively award $100,000 annually to a local charity.
Susie Berenson, also of Bethesda, founded Many Hands out of frustration over her family's annual hodge-podge of donations. She got the idea in a doctor's office while reading what she calls a "fluffy magazine" focused mostly on Hollywood breakups but that also had an article about charity clubs, known as giving circles.
Berenson says she knows she tapped a pent-up need because it was so easy to find members. Those who have time serve on committees dedicated to finding and doing background checks on local charities in three categories: health care, education and the arts. A charity from each category is eventually selected to give a presentation to the entire group, which then votes on which organization will get the bulk of the money.
Many Hands' first gift of $100,000 went to Our Place, DC, which helps women who have been in jail or prison re-establish themselves by remaining drug- and alcohol-free and staying out of trouble. The donation amounted to 14 percent of the organization's revenue for the year. The second year's $100,000 gift went to the Young Women's Project, which supports underprivileged teenage girls, and was nearly 25 percent of that organization's revenue.
"We have almost zero overhead because we are all volunteers, and 99.9 percent of donations go directly to the organizations we pick," Berenson said. "That's very appealing to people."
A Local Education
Donors say finding these "micro" charities -- often operating on a budget of $2 million or less a year -- and making sure they're legitimate can be tough.