Beyond Words

Words, Wit and Wisdom for Today's Style and Decision Makers

Tuesday Tip: Donate Wisely December 10, 2014

Filed under: Uncategorized — carlawordsmithblog @ 1:04 am

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“Are you interested in donating to….” is what I heard over and over again while doing some Christmas shopping and taking care of general household errands yesterday.  It seemed like ever register I went to to pay for my items I was asked to donate to that store’s Christmas charity of choice.  Don’t get me wrong, I really like to donate to worthy causes, but this year’s constant questioning left me a little, well, uncharitable.

 

I may have been more sensitive than normal because right before leaving to do my shopping I had donated what I think was fairly substantial amounts to my two charities of choice this year.  Each year my husband and I choose two (or in his case this year, one) charities to donate to.  In the past our favorite non-profits have ranged from our church and its programs to Scottish Rite Hospital in Dallas to the Boys and Girls Club in my husband’s hometown.  We focus on our interests and how our lives have been impacted by certain organizations and go from there.

 

As many of you know, I love dogs and I’m passionate about our nation’s military.  For that reason The Austin Dog Alliance’s “Hounds for Heroes” was one of my 2014 choices.  The new program supplies therapy dogs for wounded servicemen and women.  I am thrilled to help!  Secondly, and don’t scoff here, but I chose to donate to my daughter’s sorority at OU.  Before you him and haw, listen to my reasoning.   This is Kristen’s senior year at OU and Alpha Chi Omega has played a big role in making her four years in school memorable.  It has provided her housing, food, but most of all a group of life-long and trusted friends.  When my very own sorority at OU cut Kristen during recruitment, AXO was there to pledge her and pledge their love.  I will never, ever forget this and even though I’m an alum of my house, they will never see another penny of mine.  Alpha Chi Omega will.  Nanny, nanny, boo, boo?  Maybe just a little.

 

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Choose Wisely

So, how should one choose what charities or philanthropies to donate to?  Most experts say the most important criteria is that you have a personal connection to that charity.  You want to be able to not only donate resources to it, but your heart as well.  Enter “Hounds for Heroes” for me, as not only did I donate to the cause, but I also volunteer at the Dog Alliance.

 

Donating time is just as important as donating money and it’s nothing to be ashamed of if you simply can’t afford to give money.  The first thing you should think about prior to making any charitable donations is your financial stability.  Things like paying off debt, contributing to a savings plan, having adequate insurance, and building an emergency cash reserve should all be taken care of prior to even considering giving large amounts of money to any charity.  Until then, that charity is sure to welcome your time and talents.  As Dallas financial planner J. Tyler Russell told The Wall Street Journal, “The best analogy I can give when it comes to gifting is the standard airline-safety protocol.  If there is a sudden loss of air pressure in the cabin, secure your own mask before helping those around you.”  Genius!

 

If you are blessed with the resources to give this holiday season, know that it’s not only the season of giving but the season of scams.  To avoid getting duped, follow your philanthropic passions but be sure to take the time to find the right charity to give to.  Do your research to ensure that the charity you’re considering is efficient, ethical, and effective.  Once you find the perfect one for you, know that 100 percent of your gift will never go completely to their programs.  All charities must pay for costs like postage, utilities, salaries, and insurance.  A good rule of thumb according to charitynavigator.org is to focus your donations on those charities that give no less than 75 percent of donations to programs and leave a scant 25 percent for overhead costs.

 

 

The Good, The Bad, and the Ugly?

Potential donors in recent months and years have voiced concerns over multi-million dollar salaries of the CEOs of many charities.   For the past nine years, Charity Navigator has examined compensation packages of nearly 4,000 mid-to-large sized U.S. charities.  Their research found that some CEOs are indeed making the big bucks but they are also running multi-million dollar operations.  Leading one of these charities requires someone who understands not only the charity and its mission, but also someone with a high level of fundraising and management expertise.  These leaders are paid according to the marketplace so six-figure salaries are not uncommon.

 

That said, CEOs in the northeast were found to be the most highly paid as were those leading charities in the Public Benefit category.  Not surprisingly, the larger the charity, the higher its head’s salary is.

 

Forbes magazine also conducts an annual survey of charities that receive the most private donations each year.  For 2013, the largest U.S. charities, based on donations were:

  1. United Way – $3.9 billion
  2. Salvation Army – $1.9 billion
  3. Task Force for Global Health – $1.7 billion
  4. Feeding America – $1.5 billion
  5. Catholic Charities – $1.4 billion

 

In its rankings, Forbes also includes what it calls “All-Star Charities,” which in 2013 included Brother’s Brother Foundation, Juvenile Diabetes Research Foundation, and Boys & Girls Club of America.

 

Barring any natural disaster, I like my money to stay local.  But there are some national charities that you might consider, based on how much of donated funds actually go to those in need.  They are:

 

  1. Salvation Army. Even though its commissioner manages a $2 billion organization, recent records show he receives a small salary of $13,000 per year plus housing. In addition, 96 percent of donated dollars go to the cause.
  2. Veterans of Foreign Wars. The National Commander of the VFW receives no salary, allowing your donations to go directly to veterans and their families.
  3. Make a Wish Foundation. 100 percent of earnings go to funding the wishes of critically ill children.
  4. St. Jude Research Hospital. Created by actor Danny Thomas and now run by daughter Marlo, St. Jude’s uses 100 percent of its funding to help children with cancer who have no insurance and can’t afford to pay for treatment.
  5. Ronald McDonald Houses. 100 percent of this charity’s donations go to running houses for parents who have critical children in the hospital.

 

On the flip-side, you might want to do some serious research into just how much of each dollar from the following charities goes to those in need:  The American Red Cross, March of Dimes, The United Way, UNICEF, and even Goodwill.  It’s estimated that some of them give only one dime of every dollar or even less than five cents of every donated to dollar to the cause.  Again, do your research!

 

The best advice I can give is to open your heart and give with only the best intentions.  Even the smallest donation is always appreciated and don’t forget your time and talents.  It’s the season to give but don’t feel pressured.  “Would you like to donate?”  Yes, but please don’t pressure me.

 

 

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