Charities: Where Your Money is Going

Charities: Where Your Money is Going


‘Tis the season of Salvation Army bell-ringers and donation boxes. Typically, registered charities receive most of their yearly donations in the last couple of month of the fiscal year. (Also, because philanthropic gifts need to be clocked in by the 31st to receive a tax deduction.) Though it may seem like a cynical approach, it sometimes feels like we’re all just doing our duty when it comes to charitable giving, or maybe doing it for that feel-good element. Not everyone will do the research. Sometimes it’s just a matter of convenience: donating to whatever charity their company is affiliated with. Still others give with good intentions but are under the impression that 100% of their donation will go to the actual cause, which is not the case, especially in larger organizations

There have been several charity blunders that received media attention, and others that have slipped under the radar. The Susan G. Komen foundation, the largest breast cancer organization in the US, is no stranger to being the focus of controversy. The organization is notorious for “pinkwashing,” a term used to describe what happens when “cause marketing” loses sight of “the cause” and is more about profits. In this case, Susan G. Komen has promoted its pink ribbon products while endorsing products such as Kentucky Fried Chicken, a perfume containing unsafe chemicals, and a partnership with Coca-Cola Company, all of which have negative links to cancer. It’s also spent a lot of the money suing smaller charity organizations that used the phrase “for the cure” and the familiar pink ribbon symbol.

Its 2011 financial statement reports that “43% of donations were spent on education, 18% on fund-raising and administration, 15% on research awards and grants, 12% on screening and 5% on treatment. (Various other items accounted for the rest.)”

In early 2012, Komen announced it was pulling its grants for breast cancer screenings from Planned Parenthood, then quickly reversed the decision. However, that was enough time for a hoard of backlash from Komen supporters. Then in August, the group’s founder and CEO, Nancy Brinker, announced that she would be stepping down from her position. It was revealed 10 months later that Brinker still holds her position and received a 64% raise, making a total of $684,000 a year, according to the charity’s available tax filing at the time. Ken Berger, president and CEO of Charity Navigator said, “This is more than the head of the Red Cross is making for an organization that is one-tenth the size of the Red Cross.”

However, the American Red Cross isn’t free of scandal. With advocates like actress Sandra Bullock and former US President Barack Obama, the Red Cross is one of the first organizations people think to give donations. While it does help the cause (after Hurricane Harvey, Red Cross opened at least 34 shelters across Texas and sent enough shelter supplies for 50,000 people among other things), it has also been heavily criticized for failing relief efforts in times of crisis. During its Superstorm Sandy Relief efforts, 15 Red Cross emergency vehicles were taken away from aid work and used as props for PR purposes at press events. About 35,000 danishes were thrown out because the Red Cross didn’t know where to deliver the pastries. They didn’t have enough batteries to give out with the flashlights, and they supplied meals that included pork to a Jewish retirement home. After Hurricane Isaac, the Red Cross dispatched 80 emergency response vehicles that were nearly empty. Red Cross emergency vehicle driver Jim Dunham said, “We were sent away down on the Gulf with nothing to give… told ‘just to be seen.’”

After the 2010 earthquake in Haiti, the Red Cross raised almost half a billion dollars. However, it’s hard to tell where all the money went when years later, Haiti is left with “a string of poorly managed projects, questionable spending and dubious claims of success.” The charity claimed to have provided homes to more than 130,000 people, when in reality, the number of permanent homes they built was a grand total of six. In 2015, the Red Cross hired a group of consultants to review the project in a northern region of Haiti. They found the math didn’t add up when it came to calculating how many people they helped. In one instance, the Red Cross claimed to have helped more people than actually lived there.

All of this is not to say you shouldn’t donate to charity, or that any of the aforementioned charities don’t do good work. The intention is to encourage informed philanthropy; do the research and don’t blindly give. Besides Charity Navigator, there are several other charity watchdog resources that collect data to inform donors that are deciding where they want to give. Charity Watch by The American Institute of Philanthropy rates hundreds of charities based on financial dealings. Guidestar focuses on a community interface that lets people leave comments so you can read reviews from other donors. Charity Intelligence Canada offers ratings and reviews on Canadian charities.

It is completely appropriate to ask charities and non-profit organizations how the funds will be used, what percentage of donations go to support the programs, and how much goes to overhead and administrative costs. There has to be at least some overhead, so be wary of organizations that claim 100% of donations go to support the cause. Also consider volunteering your time for a cause you’re passionate about. This way you can see firsthand what’s being done with your donation dollar. If you’re going to give, be an informed donor.


Helen Jacob | The Edge Blog


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