This past week I got a call from a charitable organization. Officially it’s a “non-profit” organization, or one that can phone you up despite your being on various do-not-call lists. The organization was legit and had a well-meant purpose. But I did not donate.
The reason why I declined them was that I visited the Charity Navigator. It’s a web site that profiles various charitable organizations. While the guy was giving me the pitch, I looked up his organization. I was quickly able to determine that his outfit spends 2/3rd of its income on fund raising. That’s outrageous.
Yes, it’s legal for a “charity” to spend money on fund raising. What the Charity Navigator does is to help folks like you and me determine whether we’re giving money to a charity or just giving money to the guy making the cold call.
The way I use the Charity navigator is to determine how much money the organization uses for fundraising. In my opinion, a good charitable organization spends less than 15 percent of its money getting money. For example, the American Red cross spends only 2.5 percent of its income on fund raising. That’s one of the best charities, a “four star” ranking by Charity Navigator. The March of Dimes ranks only two stars; they spend 15 percent on fund raising. (I’ve given to both charities.) By putting things into perspective, you can easily see why I declined to donate to the Charity-Without-A-Name that phoned me last week.
There are other tools you can use in the Charity Navigator to determine whether or not to give to a certain outfit. Another one is executive compensation. The issue isn’t now much the CEO is being paid, but rather how the agency discloses that information. Good executives do cost money, but when the organization tries to cloak that value from you, it’s a red flag.
Relevant Link: Charity Navigator.
Microsoft Dept. Last week Microsoft made a $44 billion offer to consume Yahoo. New York Times columnist Steve Lohr has an excellent take on this hostile take-over. Google has a rather different take.
Obligatory Super Bowl link. You’ll find those commercials here.
