It’s easy to be generous this time of year, especially since opportunities knock on your door—both literally and figuratively—daily. But picking a charity can be difficult if you want your hard earned money to go to a reputable, deserving organization.
With all of the choices out there it’s sometimes difficult to separate the phony from the legitimate and the wasteful unproductive charities from those worthy of receiving your donation. Charities are not in short supply so you don’t need to open your wallet to the first one that strikes your fancy. It’s important to do a little investigating.
When scrutinizing a business, profits are taken into consideration, but what about non-profits? You could ask about the number of people served by the charity or the size of the grants they award, but what I find helpful is simply understanding what percentage of donated money goes to the cause. I want to know exactly how much of my donated money will go to feeding those starving kids in Africa.
You might be surprised to find out that there are professional fundraisers out there who call on behalf of charities, but keep 25-95 percent of money collected. I remember a time when I was called and asked for a small donation of five dollars for what seemed like a very worthwhile charity. I asked my standard question about the percentage of my donation going to help the charity and the fundraiser replied, “$25,000.” I laughed and said, “Well, that’s not a percentage. Are you saying you could collect $5 million dollars, but only $25,000 would go to the charity?” He replied, “Yes, that’s correct!”
The charity watchdog, American Institute of Philanthropy (AIP), also known as CharityWatch, suggests you support charities that have at least 60% of donations going to the cause. With that being said, it’s important to note that sometimes newer startup charities need more administrative money when getting established, that doesn’t mean they aren’t worthy of a contribution. And just because a charity’s percentages look good, doesn’t mean they aren’t being creative by, let’s say, labeling fundraising efforts as “educational.”
So what’s a person with a fistful of money to give to do? If you would like some assistance, there are charity watchdogs out there like Charity Navigator and CharityWatch that donors can use to help them evaluate charities.
Once you’ve picked your charity, please remember to never provide a credit card or bank account numbers over the phone—unless you initiated the call yourself. Same goes for responding to an email solicitation. Sometimes bogus charities pose as legitimate ones with similar names and artwork. If you want to give online, be sure to go to the charitable site yourself and look for their secure payment page before providing your payment information.
If you receive any suspicious looking solicitations, please report them to your state’s attorney general or secretary of state so they are stopped and not able to continue to dupe unsuspecting humanitarians.
A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners. Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 14 years.