Where is Your Money Really Going When You Donate to Charities?
We see commercials and ads for charities every day.
Starving children, abused animals…you’ve seen them.
Have you ever questioned how much of your money was actually spent on helping?
And how much was spent on the charity’s employees? Or on that commercial?
You may have thought something along the lines of…
“Why didn’t they spend this money on feeding those children instead of paying for this expensive commercial?”
Let’s see what’s going on here…
Where Else Does Your Money Go?
If it doesn’t go to the cause, where does it go?
There is no simple answer to that question. It goes to many things.
Here are some of the expenses charities can have:
- Admin costs
- Advertising/marketing costs
- Rent/lease payments
- Maintenance costs
- Additional fees and costs (really specific, I know)
Some charities have the funds for their administration donated, which would cover practically everything mentioned above.
This means there are people who donate money specifically to cover the cost of the administration; therefore, 100% of the money you donate is going directly to the cause.
I think that’s pretty cool.
But, that doesn’t mean there aren’t good charities that don’t do this.
Let’s look at some of the more popular ones…
How much do some of the more widely known charities use for administration costs?
These charities allocate a certain percentage of every dollar to direct aid. Some maintain the same amount at all times and others allocate 100% to direct aid during disasters.
This is the breakdown of how much goes to direct aid:
- Feeding America (98%, 100% during disasters)
- Feed the Children (92%)
- The Red Cross (91%)
- World Vision (85%)
- The Salvation Army (82%, 100% during disasters)
Those are pretty good numbers. Though, all charities are not created equal.
How to Figure it Out
There are some great resources out there to figure out how different charities spend their money.
Use these websites to research and compare:
There are other sites around the web that offer similar information, but these two cover basically everything.
Something else you probably hear about is the “outrageous” salaries that some charity executives earn.
The Red Cross comes to mind, since their CEO earns several hundred thousand dollars.
I’m not here to argue about how much is too much, I am here to suggest that you do your research.
If you think the employees deserve to earn high salaries, by all means, donate away. If you think they are overpaid, you should probably find another charity.
The point is that you may have some research to do.
If you haven’t started giving yet, do the research to find your best option. If you are already giving, figure out where your money is going.
There are too many charities and organizations out there to give to an inefficient one.
It all depends on your views.
I know you want to make the most responsible donation possible, so you simply need to do some research on the charities you plan to work with.
You have thousands of options when giving, make it count.
Quick side note: This is the best series I have ever heard in my entire life on giving: Compassion by Command by Greg Boyd (Woodland Hills Church). You can download the entire thing for free if you follow that link. It’s heavy directed towards Christians, but everyone would benefit from hearing it.
Do you give regularly?
What is your favorite charity?
Share in the comments!
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