Charitable Giving

A discussion with a colleague recently, caused me to wonder about how much thought we really give to causes that on the surface appear to be so altruistic and their methods of fund-raising.  

I personally have my favourites as most people do and have gone to the CRA site on occasion to get more information on their fiscal responsibility.  To be more specific, what percentage is being spent on administration (overhead)?

While it's great to have not-for-profits, charities and service clubs available to assist during a natural disaster or fund medical research, finding homes for the homeless, or any other prevalent need; the organization should strive to maintain as low as possible administration costs to ensure maximum return on donor dollars.  

Charities that commonly run lotteries are a prime example of the amount of money that has to go into actually raising money.  If, before $1 goes into a research fund, health fund, homelessness fund, $100,000 must be spent, is the return on your donor dollar well spent? On the surface you would think not, however, the end game is what counts and if the lottery raises $1m, then the $100,000 has been well spent as that represents 10% of the total. On the other hand, if the overall amount raised was only $150,000, then the story changes as 67% of what was raised has gone into raising it.   

Another common problem that Charities and not-for-profits run into is the professional fundraisers.  These are organization that will raise money for your cause for a fee.  If an amount is established before they ever begin, say, 10% of gross, this is a method that is, although iffy, acceptable.  However, what happens when the amount they bill has not been agreed upon beforehand?  You could, as some have found, be paying more for their fund-raising efforts than the amount that would go to your organization.  

Now, another issue with professional fundraisers and to my own opinion, the main problem, is that they have no connection with the organization.  They are not attuned to the vision, mission and code of values, of the organization, nor do they really care about the end result for the organization.  This is a business to them, pure and simple.  And, before you think this may never have happened to you, what about the calls you have received in regards to an organization’s fund raising efforts, for a particular cause or event, benefit, circus?  These calls in all likelihood have originated from professional fundraisers.  Even some of the well established not-for-profits, charities and service clubs have resorted to hiring professional fundraisers. 

I hope I’m not discouraging you from giving if there are professional fundraisers involved, but, what I would hope is that you would at least from time to time request the financials from the organization’s (Not-for-profit, charity or service organization) Annual General Meeting, or, go the CRA website, or go to Charities Intelligence http://www.charityintelligence.ca/ yourself and search out your favourite not-for-profit, charity or service club and see for yourself what is going on.  And, finally, it is your money, be wise with it, and if you want to give some of it away, look around and see who is giving the most bang for the buck.  But, above all, don’t forget to give!