Friday, January 22, 2010

Investigating Charities

When I began donating to charities, one of the first problems I ran into was trying to figure out which charities I wanted to give to. Some charities are so massive and bloated, or tied up with corporate interest, that the donations just don't get where they need to go. Sometimes you'd be better off giving to a smaller charity than a larger one, because those charities actually help people.

One tool which I find very helpful in sorting all of this out is Charity Navigator, a website that evaluates most major charities on their efficiency and capacity. It's a good site to check before you give to a new charity. Charity Navigator also has some great tips for giving for Haitian disaster relief ... especially, you should consider that direct donations of supplies just isn't an efficient way to help out. I've seen a lot on the news about people donating supplies, but getting these supplies from all over America to Haiti just isn't practical.

Though Charity Navigator is useful, it still takes some care. For example, one of my favorite charities is Heifer International, which only has a rating of 3 out of 4. Heifer provides livestock to people in developing countries, so they can be self-sustaining. However, donations to Heifer has a "pay it forward" element (each recipient donates the first offspring of the animal they received) which isn't taken into account in the rating, and it provides training to the recipients along with the animals, so it's understandable that there's more overhead with this charity than some others.

I can't stress enough the importance of these elements of Heifer. It's very easy to give money, but much harder to give it wisely. Resources are limited, so they should be leveraged in ways that provide "residual philanthropy" (a phrase I heard from real estate mogul and financial expert Robert G. Allen) ... a benefit that begets further benefits down the road, helping to solve the problem instead of just ameliorate it. This is summed up by the saying:

Give a man a fish, and he'll eat for a day. Teach a man to fish, and he'll eat for a lifetime.