How do you make your holiday charitable giving decisions?

Photo by Oblivion 9999

Last year, Nathaniel Whittemore facilitated an online discussion by asking bloggers to answer the question: "What is the one thing you need to know before you donate to charity?"   This year the answer to the question isn't overhead ratios and executive salaries.   

Nonprofit experts cite many reasons that focusing on an overhead ratio is not the best way to choose a charity:

• It tells you nothing about the impact the charity has on people it's trying to help
• It discourages charities from investing in tools and expertise that would make them more
• effective
• The rules for determining overhead costs are vague and every charity interprets them
• differently
• Accounting experts estimate that 75% of charities calculate their overhead ratio incorrectly

You can check charity rating and directory sites such as GiveWell, Great Nonprofits, Philanthropedia, Charity Navigator, and Guidestar,  and Philanthropy Action to get information about charities that are effective in delivering their programs.

My giving style is streamlined.   I have a particular interest area (Cambodia children) and I'm on the board of the Sharing Foundation.   So, most of my charitable giving goes there.  Next, in line are several organizations where I serve as a board member and a select few Cambodian charities.   I know the organizations very well and the people involved.   I know I'm making a good investment.  

When I give to nonprofits based on a solicitation, I only give if know the organization first hand or know the person who asked me personally.  I also do my due diligence by checking one of the above sites.  I also visit the organization's web site as well.     

During the holiday season, I get a lot of requests from friends, family, or colleagues to support their charity.  My giving is usually in very small gifts - $10 here and there, sometimes $20.   So, I make decisions based on the friend's credibility and judgment and if I'm not sure, I ask the friend or check out the charity myself.  I would never make a donation to an organization that I haven't researched or didn't know.

Of course, if a stranger or someone I don't know all that well asked to donate, I wouldn't.   There is some theory that backs this up from Robert Cialdini, Influence: The Psychology of Persuasion.

There is a definitely some value to putting together a personal giving plan so your holiday donations don't end up - as Britt Bravo has said - like gum in the grocery check out line.

How do you decide whether or not you'll make a donation to a nonprofit organization or not?  What criteria do you use?  Are overhead ratios important to you?   Finally, do you have a giving plan?

Comments

[Karen Maunu LWB]

We take charitable giving very seriously working in the nonprofit world. Amy Eldridge, our Executive Director, wrote an article entitled "Choosing a Charity to Support" which evaluates 10 different areas you can look at to decide which charity to give to.

http://www.lovewithoutboundaries.com/evaluate_charities.cfm

These 10 items she discusses includes - what is the charity's overhead, is the charity making a real impact, is the charity true to its mission, how much reporting do you want, how does the charity handle restricted donations, if the charity offers a "sponsor a child" are they upfront about whether the child profile is really the child you will be helping, is the charity the middle man, what about financial reserves, and what are other people saying about the charity you are supporting?

There is definitely more than overhead to be considered and we always telling our donors to research the charities they support.

Great blog!

[twitter.com/mindsondesign]

Last year my business partner and I gave to a teacher through Donorschoose.org. We found a teacher in a NYC public school whom was trying to facilitate a graphic design related curriculum and needed some materials to support the effort. With my education experience, our shared interest in education and social service work, and the design focus of our company it was something that we connected to on a number of levels. Like the description above, we did a little research checking into Donorchoose.org further than we had prior as well as the individual teacher to the extent we could. The driving factors for us deciding to donate was we shared a connection to the cause and the there was a clear impact and "deliverable" if you will that our contribution was going towards. Have not yet decided on what we would support this year.

[Katie]

I subscribe to the belief that if you have experienced an organization's work, or if an organization has been meaningful to your family and friends, that is a good reason to support it. We tend to favor local charities over national or international charities.

We try not to make gifts of less than $100, because it costs the charity as much to process a $10 gift as it does a $1000 gift, and we want to be respectful of how even the size of our gift can impact a charity's overhead costs. In addition, knowing that so many gifts come at the end of the year, which can be trying on a non-profit's resources, we try to spread our giving throughout the year. We make pledges, set up payroll deduction or automatic draft on our credit card for these so we are not waiting until the end of the year when we have so many other additional holiday-related expenses.

We budget most of our giving in 5 areas: the non-profit for which I work (a hospice, which does amazing work), our alma mater, and our church. The fourth area is for the local charities we support (PTA, library, children's home, museums), and the fifth is a reserve for memorial gifts throughout the year. For those, I always give to the charity suggested by the family (as long as it is a charity we recognize or can easily research). I also try to set aside some money for supporting friends who participate in charity events throughout the year.

[Wendy]

Great post Beth. We (American Red Cross) conducted a survey to anticipate holiday giving since we're launching our first Holiday Giving Campaign. Some of the results may be interesting to you in light of this post. You can find them here:

http://www.redcross.org/portal/site/en/menuitem.94aae335470e233f6cf911df43181aa0/?vgnextoid=e6efbeba64525210VgnVCM10000089f0870aRCRD

[Nancy]

Great article - with Adopt-A-Classroom, people have the opportunity to adopt a classroom and give to any teacher in the US. Most people give to teachers that they know. 100% of a donation goes directly to the teacher so that they can purchase classroom supplies (some need the most basic things!). You can make a tax deductible donation at www.adoptaclassroom.org