Where Should You Donate?
When It Comes to Choosing Charities, Those Who Want to Give Wisely Get Careful
Sunday, November 18, 2007; Page F01
At a bar in Adams Morgan on a recent Saturday night, Miss D.C. USA was cracking jokes onstage when she was joined by Mahmoud Ahmadinejad, Mike Ditka, Ron Burgundy from "Anchorman" and Milton from "Office Space" -- or, at least, their mustachioed look-alikes.
Young revelers had paid a $10 cover to get into the bar for a charity event called the Glorious ManPageant. The evening was organized by the Society of Mature Adults Seeking to Help, Entertain and Donate, known as SMASHED. It raised $3,500 that went to Capital Queen for a Day, a local organization that sends beauty pageant contestants out to hospitals to host special events for pediatric cancer patients.
While many of the patrons showed up mostly for the mustaches and beers, SMASHED was quite serious about where their contributions would go. It takes a careful look at the groups it singles out for donations. Kate Larned, 29, a charity coordinator for SMASHED, said the organization compiles as much information as possible on each charity it chooses.
With about 1 million charities worldwide, it's important to carefully vet the organizations you select for your donations. Matching your heart to the right group can be complicated and time-consuming. And giving to a charity that turns out not to satisfy your goals or, worse, makes off with your money can sour the experience.
When examining a charity, you want to know how it uses its money, how much of the contribution goes to helping and what portion to overhead, whether salaries are in line with those at similar charities, and how healthy the organization is. Many resources exist to aid you in your research, and a lot of them are just a mouse click away.
The first step in choosing a charity is to clarify your goals, said Melissa Berman, chief executive of Rockefeller Philanthropy Advisors, which helps foundations and other large donors decide where to put their money.
If you care about education for poor children, for example, how would want your charity to go about tackling it? Through charter schools? Pre-kindergarten education? "Think about finding the solution," Berman said.
An organization that closely mirrors your ideal approach will probably bring you the most satisfaction. Carefully weigh the charity's strategy. Compare it with that of other groups. Once you've given your money, it's too late to think about what you want your money to do.
Donors should look at an organization's leadership, its board governance and its impact on the community, said Audrey Alvarado, executive director of the National Council of Nonprofit Associations, which represents state and regional nonprofit organizations. Talk to people who have been served by the charity, she suggests.
It is worthwhile to take a close look at a charity's financial picture. If you find high solicitation costs or a lack of willingness to share financial information, for example, those should be warning flags.
Donors usually compare how much money flows into administrative costs -- salaries, overhead and solicitation -- and how much is devoted to programs. But sorting out what funds go where is not always easy. "I don't think we have a clear definition about what's really administrative and what's really program costs," Berman said.
Both Berman and Alvarado advise donors to consider an array of issues related to a chosen charity in addition to the financials. Alvarado suggests taking a look at whether the charity is sustainable and whether compensation is in line with norms. Keep in mind, she says, administrative costs tend to take up less of a larger organization's budget than a smaller one's. Organizations that are just starting or have taken a hit recently -- such as those helping people hurt by Hurricane Katrina -- may also have higher administrative costs.