Nick Kristof’s Sunday column, When Donations Go Astray, is entirely on the topic I started with my previous post. He warns about inefficient charities, for some only 21% of your donation actually reaches the needy. (For convenience, click through to it via a Google search. Go read the column.)
In particular Nick warns religious givers, who tend to donate more than the non-religious, that merely sharing your religious label does not mean the charity makes good use of the money you give them. He gives examples of an inefficient Christian charity and Jewish and Islamic charities that contribute to extremism and violence.
The column also gives advice: he suggests some charities, religious and secular, and he mentions organisations like GiveWell that help guide the small-time donors, same site that Peter Singer mentioned. And currently serving blank pages for me. I hope this is because their servers are overloaded by demand? 😉
In particular, advice on what to avoid:
Today, however, much giving remains impulsive and inefficient. When people get a call out of the blue asking them to donate to firefighters, they may imagine the caller is a volunteer; instead, he’s probably a paid fund-raiser, who will take much of what you give.
“Chuggers” — short for charity muggers — who stop people on the street likewise often work for fund-raising companies that swallow much of any donation. When people receive address labels or a key chain from a charity, they’re more likely to write a check — but that’s a terribly inefficient way to raise money.
A column is limited in length — that one is 785 words — so he shares a couple more thoughts on his blog in Religious Donations Going Awry (just under 500 words, you could read just that, if you like). His blog is also where readers respond with comments, some of which are very insightful.
But one of the basic problems is this: people give to organizations that ask, and those that ask are often the least efficient. An aid group may find that if it spends $200,000 on a fund-raising firm making cold calls, it’ll gross $250,000 for a $50,000 profit. That’s worth it to the aid group — but for you as a donor, it’s not very appealing to know that 80 percent of your donation is going to a fund-raiser.
But don’t let this discourage you from contributing: inefficient contributions are good, efficient and impactful ones are simply better!