Choosing a Charity Worthy of your Donation

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.

 

Coal in our Christmas Stockings? Consumer Debt Hits Another Record

I suppose one could argue that having coal in our Christmas stockings is not necessarily a bad thing.  In the 19th century, a lump of coal just may put off freezing to death for another day.  A good thing.

But we are in the 21st.  I wonder how many of us have even seen a lump of coal, let alone used one for something useful.  Heck, even our barbecue grills rarely use charcoal anymore.  Most use propane.  Even our powerplants are converting to natural gas.  The piles of coal that once filled the power plant yards are disappearing as I write.  A good thing if you live near one as I do.

So, if you get a lump of coal, what to do?  Good question. May I suggest you regift it to the politician of your choice?  Please don’t send it to your faithful blogger; I have enough to empty out from last Christmas.

But I digress (again).

I beg to report that once again we have to reckon with a lump of coal in the form of the rising level of consumer debt, which once again reached historic levels in the third quarter.

To be clear: not just historic, but unprecedented.  Highest of all time.  We have never seen anything like this amount of consumer debt.  Ever.

Good or bad?  You can be the judge.  On the one hand, as we continue to experience low levels of unemployment, we should be able to afford to pay our debts.  Certainly, the argument is that consumer spending, with the resultant high levels of debt, is powering the economy.  On the other hand, it won’t take much to wiggle us into a difficult spot.  And we have plenty of things, nationally and globally, that can start the wiggle. More on this last later in the blog.

Here is the latest for the third quarter (from The New York Federal Reserve “Quarterly Report on Household Debt and Credit” read it here):

  • Total household debt increased by another $92 billion to $13.95 trillion
  • This is the 21st consecutive quarter with an increase in household debt
  • We have exceeded, by 3 trillion, the last peak reached in 2008 ($12.68 trillion).
  • Mortgage related debt increased by $31 billion, the largest component of household debt
  • Other types of debt all increased by an aggregate $64 billion including:
    • $18 billion in auto loans
    • $13 billion in credit card balances
    • $20 billion in student loans.
  • Not good news: “Aggregate delinquency rates worsened in the third quarter of 2019”.
    • As of September 30, 4.8% of outstanding debt was in some stage of delinquency
      • This is a 0.4 percentage point increase from the second quarter due primarily to increases in early delinquency buckets.
      • Of the $667 billion of debt that is delinquent, $424 billion is seriously delinquent (at least 90 days late or “severely derogatory”, which includes some debts that have previously been charged off that the lenders continue to attempt collection).

So, what happens from here?  I suppose it is anyone’s guess but given what appears to be the start of a very robust holiday spending season, we will reach another new record in the fourth quarter.  A lump of coal to me if I am right?  Bring it on I guess but this trend clearly is not sustainable.

What can go wrong?  Well, for one thing, our personal financial health can begin to deteriorate.

A measure of the financial health of the consumer has recently been published by the Consumer Financial Protection Bureau (CFRB).  While opinions on the effectiveness of the CFRB vary, their recent report “Financial Well-Being by State” (read the full report here) attempts to analyze how consumers view their financial well-being by age and then by state.  The intention is to spotlight differences in age and financial well-being and highlight areas of the country that need to pay particular attention to financial education efforts.

The ACA International (a business association for collections professionals) published a summary of the CFRB report (read it here). They write:

“According to the CFPB, financial well-being is defined as the state wherein an individual has a sense of:

  • Control over day-to-day and month-to-month finances;
  • Capacity to absorb a financial shock
  • Being on track to meet financial goals;
  • And the ability to make financial choices to enjoy life.”

The ACA notes “Financial well-being varies by age and where consumers live…on average adults ages 18 to 61 have a score [of 49] reflecting minimal savings and some difficulty making ends meet…”.

“A score of 49 is at the top of the medium-low financial well-being score range…”:

  • Most (60%) of adults in this range have minimal savings of $250 or more, but only 30% have $2,000 or more in savings.
  • Almost all of adults in this range (80%) find it somewhat or very difficult to make ends meet.
  • Some (32%) have had a credit card application rejected or are concerned about credit rejection.”.

That is pretty alarming when we add on our unprecedented the state of indebtedness.

Digging deeper, even lower scores have arguably unrecoverable financial problems.  Again, this varies quite a bit by state. From the ACA:

  • “In the very low category, (a score of 0-29) just 5% of adults in that group are certain they could come up with $2,000 for an emergency; while most (82%) sometimes or often experience “food insecurity” or “food hardship,” according to the CFPB.
  • In the low category (a score of 30-37); few (23%) save money on a regular basis and only some (38%) have more than $250 in liquid savings. Nearly half (45%) of adults in this group said they have experience with debt collectors.”

The ACA concludes: “The CFPB’s findings can be a benchmark for the accounts receivable management industry to consider when communicating with consumers and developing manageable payment plans.”

Coal for the holidays?  Let us hope not.  The bright side is that basically half of us do pay our bills, have the means to do so, and feel pretty confident about our financial well-being.  When circumstances warrant, however, we are here as your experts to help with your receivables management.  We are the experts in working with clients to optimize their recoveries.  Let us help!

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.

image provided by: creative commons

 

Joy to the World? How About Joy in the Workplace?

I know we all experience joy in our personal lives.  Weddings, the birth of children, graduations, new jobs and personal growth certainly create a sense of joy. I know things like this do so for me.

However, do you experience joy in your professional life?

That may take a minute to process, and with regret I would guess many of us would have a hard time answering a resounding “YES!” to that question.  Certainly, milestones like getting a long sought-after position, annual bonuses, meeting and exceeding tough goals, being recognized for achievement, all can create a sense of happiness and fulfillment, if not outright joy.

We are coming into the season where gratitude can play a key role in keeping up our spirits.  A sense of joy in what we do can offset many of the challenges we face in staying positive, especially in challenging times.

Last month I wrote a blog about the importance of trust in the workplace.  At least one study has shown that a sense of trust can increase the productivity and motivation of both ourselves and the teams we work with.

Recently I came upon another article from the Harvard Business Review titled “Making Joy a Priority at Work” by Alex Liu (Harvard Business Review, July 17, 2019, read it here).

Why joy as a priority? Liu says: “Amid the dazzle and hopes of the digital age, it is easy to forget that old-fashioned human desire is as essential to achieving business goals as ever.”  But, as he notes, “…many companies struggle because their cultures get in the way — too many layers and silos, too many colleagues who prefer to stay in their comfort zones, bask in their KPIs [Key Performance Indicators], and resist new ways of connecting and working.”

What to do?  “…joy can be a big part of the solution. Why? For two reasons. People intrinsically seek joy. And joy connects people more powerfully than almost any other human experience.”

He uses sports as an example. Who among us has not witnessed the raucous celebrations that erupt after our favorite team wins?  And winning seems to breed success, if for no other reason that feeling the joy of accomplishing something meaningful feels pretty dang good. Don’t we all want to keep feeling like this?

Liu suggests that business leaders can build joy into their organizations by focusing on three key behavioral elements:  Harmony, Impact and Acknowledgement.

  • “ On winning teams, each player has a distinct role in achieving the goal. One player might be a great passer. Another is a great scorer. Yet another may bring a certain intensity and competitive fire. When the diverse skills and strengths of teammates are really clicking together, it feels great.”

 

  • “Impact. Team harmony leads to impact, which further fuels joy. Even if the result is just a single sublime play or golden moment, the palpable joy of each teammate rises.”

 

  • “Acknowledgment. Great coaches instruct their players to, when they score, immediately point to the teammates who created the scoring opportunity. Acknowledging each player’s contributions and cheering for each other powers the entire joy-success-joy cycle.”

Is the impact of joy in the workplace quantifiable?  Yes, according to Liu.  A.T. Kearny did a survey in December 2018 that dealt with employee’s experiences of joy in the workplace.  The results?  There is a direct correlation between feeling more joy in work and being able to work in harmony, have impact and thus being acknowledged for accomplishments.

All roses?  Not quite.  “…[T]he survey also points to a pronounced “joy gap” at work. Nearly 90% of respondents said that they expect to experience a substantial degree of joy at work, yet only 37% report that such is their actual experience.”

The consequence: “Business leaders tend to think a great deal about success, but rarely about joy. Chances are, few are even aware of the joy gap in their organization and the resulting lack of interpersonal connection and team aspiration. That must change.”

How to do that?  Liu has three key steps to enhance workplace joy”

  • “Set the agenda. Make the experience of joy an explicit corporate purpose. Strengthen your inclusion agenda to incorporate meaningful efforts toward ensuring all employees feel heard, recognized, and acknowledged.”

 

  • “Set the stage. Staff your new digital/culture programs with true cross-unit, cross-silo teams, where joint teamwork delivers maximum impact, shared success, and fun.”

 

  • “Set the tone. Encourage and celebrate individual and corporate social impact efforts. Authentically express more of the joy you personally experience in your role. Joy begets joy.”

How does A. Alliance try to create that sense of joy in our workplace?  Especially in an industry as tough and challenging as debt collection?

Well, each year the management team designates the entire month of November as Team Appreciation Month.  You will hear more about that in the weeks ahead, but suffice to say the intent is to show intentional appreciation for the superlative efforts our team puts forth during the year.  Working as closely as we do, working as a team is imperative, and when we achieve our goals, we all feel pretty joyful.  That, of course, in turn, becomes high quality service and results for you our valued clients.

Thank you for being our valued clients and for bringing us a sense of joy when we are successful for you!

 

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.