Last year, I decided to do a little checking up on the charities to which I give. Just to be sure they aren't taking my money on a vacation to Aruba, or something. Invariably the CEO salaries are sky-high. I guess I have to put up with CEOs taking my money to Aruba, even at non-profits. Actually there's one exception: the CEO of Doctors Without Borders only rakes in $100,479. Now that, I can live with.
But it's not so easy to tell what's up. I found two charity ratings organizations and compared. One is Charity Navigator which has a number and star rating (4 stars is tops) and the other is American Institute of Philanthropy, which gives A thru F. AIP gives you a list of top-rated charities, but if you want to get the poop on anything other than these, you have to cough up some cash for their ratings book, which I'm just not going to do.
Here's my list of charities, followed by their ratings:
Charity : AIP rating : CharityNavigator rating
- Oxfam : B+ : 52 (3 stars)
- Doctors without Borders : A : 61 (4 stars)
- Amnesty International : "not top rated" : 35 (1 star)
- Disabled American Veterans : not rated (info not provided to AIP) : 69 (4 stars)
- World Wildlife Fund : not top rated : 48 (2 stars)
- NARAL : not rated (info not provided to AIP) : 40 (2 stars)
- Planned Parenthood : A : 68 (4 stars)
- UNCF : A : 55 (3 stars)
- NPR/CPTV (public radio/tv) : not listed : 60 (3 stars)
- Tibet House : not listed : not listed
- NY Times Neediest Cases Fund : not listed : not listed
- Kids with Cameras : not listed : not listed
- CFPA (Connecticut Forest and Park Association ) : not listed : not listed
So one of my problems in all this is - who is watching the watchers? How do I know that AIP and CharityNavigator are doing a good job? Can I really rely on their ratings? Sure I can read all the info about what they say they do... just like I can read all the info about what these charities say they do. Hmm.
8 comments:
For myself, there are two kinds of due diligence I want to do on a charity. The first is the kind you're talking about, which is seeing whether they are liars and cheaters and taking way too much money for themselves
The second is tougher, and more subtle --- are the ends the charity shooting for being achieved? How are they being achieved? Are there measurable goals being worked on, and what sort of deadlines are there for those goals? How are people being held accountable for those? When the Peninsula Open Space Trust visited Google, I asked them a lot of tough questions about those things and they answered them to my satisfaction. I wouldn't feel so sure if I was say, contributing to the Asian Tsunami --- it seemed like there were way too many charities on the ground there getting in each other's way.
"are the ends the charity shooting for being achieved?"
Many charities produce annual reports and other documentation in which they review ongoing projects and discuss results. Here's one such report from Doctors Without Borders: One Year After The Indian Ocean Tsunami Disaster. Having read this, and more of their materials, I feel very confident that they are doing a world of good, affecting many people in a positive way.
Of course, you would have to consider their goals worthwhile for it to make sense to give to them. I can't really tell what you're looking for a charity to do - what might some major worthwhile goals be - from what you've said.
Did you take everything the POST representatives said on faith, or did you look for independent verification? They are in Charity Navigator as well. I looked up a few of their higher rated peers, Natural Lands Trust and Sherrif's Meadow Foundation. Sherrif's Meadow was pretty astounding; executive compensation is at only about $50K with 97% of its budget going towards program expenses (as opposed to administrative and fund-raising). I'm definitely giving them a closer look, although I tend to like contributing to international organizations.
Well, I ride through the POST lands on my bicycle on a monthly if not weekly basis, so I do know of enroaching developments. That's how I do my own monitoring.
I am sad at how much they're paying their CEO, though.
I generally give to environmental organizations. (Though cycling gets a lot of my money too for purely selfish reasons) It seems to me that while a lot of money goes to humanitarian aid, not enough goes into protecting the environment. When mandatory carbon trading goes into play I have a good mind to just buy a few carbon credits just to hold and drive up the cost of emissions.
I totally hear you on the environmental issue. I do get the impression that more money goes towards helping humans than helping the planet and the other critters on it. I wonder if that's true; I'm definitely going to look around for some info on this. Neither area is funded well enough, IMHO.
It's certainly true that my own giving is weighted heavily around humanitarian aid. It's accidental. I've been having a little difficulty finding an environmental group that I trust, of late. For example, I used to give to The Nature Conservancy, but I came across a series in the Washington Post that gave me some doubts. I didn't have time to research the whole thing, I just ended up dropping them.
Charity Navigator has some stats on giving in the US, and makes the claim "Without charities and non-profits, America would simply not be able to operate. Their operations are that big." Hm.... "Total giving to charitable organizations increased to $248.5 billion in 2004."
Religious organizations received the most support - 36% of giving goes to them. "Much of these contributions can be attributed to people giving to their local place of worship."
"The next largest sector was education" - 13%. I guess this means endowments and the like.
I haven't found anything specific to the other categories yet, still looking.
Aha, I finally found some recent stats on charitable giving (there's some rounding error):
36% Religion
14% Education
9% Health
8% Human Services
6% Art, Culture, Humanities
5% Public-society benefit
3% Environment/animals
2% International affairs
9% Unallocated giving
10% Foundations
Indeed, the environment gets short shrift. I'm kind of vague on what some of these categories include, and it seems you have to buy the AAFRC report to get more info.
FYI self-appointed charity watchdogs oftentimes manipulate the audited financial statements of charities when issuing their opinions.
What's more the AICPA's GAAP are not uniform and calculate benchmarks like "cost of fundraising" quite differently for different types of charities. For instance, the costs of fundraising borne by local affiliates are not factored into a national organization's financial statements; the costs of a fundraising event, like a race, are netted out of the amounts raised.
These are just a few considerations that need to be considered when comparing the financial statements of different charities.
Another question: just who are these so-called watchdogs? Where can we find their financials?
To anonymous:
"FYI self-appointed charity watchdogs oftentimes manipulate the audited financial statements of charities when issuing their opinions" - you might want to explain exactly what you mean by "manipulate" here. I would hope that they would make adjustments when comparing a large international charity with a small local one.
For the rest, well, yeah ok. Let's compare the situation with car repair. How do you find an honest mechanic? Ask people you trust (personally I put little faith in that method). Look them up at Car Talk. But in the end, how do you know the guy didn't just charge you $800 to replace a hose? You can ask to stand over the mechanic while s/he does the work, but I doubt they'll let you in there for insurance reasons. In the end, if you can't stand the idea that someone may cheat you, you're going to spend a lot of time on foot.
There's only so much you can do to audit anything or anyone. Charity watchdogs like Charity Navigator are a big step up from giving money to any old charity that calls you on the phone. You can put more effort into this process if you so desire, hiring investigators, calling directors, and so on.
As for "who are these so-called watchdogs?" Charity Navigator is a 501(c)(3) organization and you can scrutinize their form 990 if you like. Feel free to do more research of your own.
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