The military community was stunned by a Military Times story last week that said Operation Homefront had fired its co-founder over $36,000 in missing donations. It’s still not clear what happened, but hearing that something shady had gone down at one of our most active and respected non-profits had many would-be donors shoving wallets back into their pockets – and it couldn’t have happened at a worse time.
The turmoil in Washington has meant more in the military and veteran communities may be forced to look for charitable help to make ends meet. But with so many charities to choose from, and a still-bad economy leaving donors with less money to give, how can you be certain that the money you donate will actually do some good for a cause you care about?
Fortunately, it’s a pretty easy process.
Step one: Identify what makes you mad.
When you think about all the wrongs in the world, probably some get you more fired up than others. Are you passionate about the environment? Animal rights? Feeding the hungry? Religious persecution? Supporting the military? And, do you get more fired up about issues here in the United States, perhaps even in your local community, or do you dream of helping global efforts? There are no right or wrong answers, but it does help to narrow your passions down to about three issues.
Step two: Find out who is doing something to solve these problems.
Start with a simple internet search, and then get more specific as you read more about the issues. You’ll likely learn the names of the best known organizations right away, but dig a little longer and you’ll find some of the smaller groups, too. Try to come up with at least six organizations you want to know more about.
Step three: Decide how you plan to spend.
If you’re reading an article like this, it’s probably because you can’t afford to waste money. That’s good. Look at your budget and figure out about how much money you’d like to donate and whether you’d prefer to make a big splash with one organization or to share the wealth among several groups. Again, there’s no wrong answer.
Step four: Do some more research.
This is where the proverbial rubber meets the road. You know which causes you care about and you know several groups that are working in those areas, now take that list of names over to watch dog web sites like Charity Navigator, Charting Impact, Guidestar , Philanthropedia, or the Better Business Bureau’s Wise Giving Alliance and see what those sites have to say about those groups. But, the watch dog sites aren’t the final word on whether or not an organization is worth giving your hard earned cash to. Even charitable giving experts are torn on what makes a charity a good bet. And, it’s important that you compare organizations fairly. Museums, for example, will have higher operating costs than food banks – and that’s okay.
People often talk about the amount of money spent on overhead versus operations as a sign of whether or not a charity is worthy of your gift. However, the chief executives of all the major watch dog groups agree that this is a metric that needs to go away. This summer those executives co-wrote a letter debunking the “overhead myth” and posted it here.
“We ask you to pay attention to other factors of nonprofit performance: transparency, governance, leadership, and results,” they wrote. “… That is not to say that overhead has no role in ensuring charity accountability… it can be a valid data point for rooting out fraud and poor financial management. In most cases, however, focusing on overhead without considering other critical dimensions of a charity’s financial and organizational performance does more damage than good … Overhead costs include important investments charities make to improve their work … These expenses allow a charity to sustain itself (the way a family has to pay the electric bill) or to improve itself (the way a family might invest in college tuition).”
One charity expert, Dan Pallotta, gave a TED Talk earlier this year arguing that charities are suffering because we expect them to play by stingier rules than we apply to corporations.
“I want people to consider themselves a philanthropist no matter how much or how little they are giving,” Pallotta said. “Even if you are giving $25, you are still a philanthropist. I advise people to figure out what cause they want to have an impact on, and take time doing research to find out the organization they feel is doing the best work on that problem. Then, make them your charitable partner for life. Continue to follow their progress, continue to learn about them, and continue to invest in them. You make a lot of inquiries before you buy a car or before you cast your vote for president – do the same thing before you cast your vote for a charity with your contribution.”
Step five: Give.
Once you feel good about a particular group, stop researching and make the gift. Don’t let information overload paralyze you. If you’ve gone through the above steps, you should be able to make a knowledgeable donation and feel great about the good you’ve done.