We hear the phrase non-profit all the time. Radio and TV advertising coercing you to donate to a good cause for one thing or another. Maybe you let that Sarah McLaughlin song wear you down, and you finally donate to the ASPCA. But where is your money going? Who gets it? Who benefits the most? That is not something that can easily be answered. Unfortunately, the statistics on these organizations are not so consistent, and the answer varies from charity to charity .In some cases, less then $0.10 on the dollar will reach its intended target. In ASPCA’s case, they claim 80 percent of their donations go to programs, while Charity Navigator claims that they only spend 61 percent of donations on programs, 32 percent on fundraising, and 5.8 percent on administration costs. Either way, they are not exactly on the “do not donate “ list. In fact, those numbers are pretty median. If you take a look at Petsmart Charities data, however, Charity Navigator claims they spend 92.6 percent of donations on projects. That means more of your donation is going to the cause that you support instead of fundraising and admin costs.

It is estimated that only 3 percent of donors donate based on an organizations performance and only 6 percent of donors research before choosing an organization. Those statistics are extremely low. Some organizations at the bottom of the performance list count on these uninformed donors to bring in revenue. In some cases, board members can receive a small portion of total proceeds as “compensation” for serving on the board of directors of an organization. Essentially, if the amount dedicated to projects is extremely low and the proceeds are high, you could in fact be donating to these individuals' salaries.

So, how can you donate smart? Research. Most charities that are reputable should be “transparent.” This means that you can call or write them and ask them questions about their operations, cash flows and fundraising initiatives as well as access certain financial records and data, such as tax documents. There isn't necessarily anything negative about a charity or organization that pays its board members; sometimes these individuals donate a majority of their time and skills to their causes and would have no other way to earn a living. However, there are many organizations in which the board of directors does not receive or accept contributions from the organization. It can be helpful to compare organizations' revenue, fundraising performance, administration costs and the amount they dedicate directly to their cause or projects. When evaluating this data, there are no set statistics to go by to make your decision easier. Smaller charities may have a higher percent go to administrative costs but still may be lower than average in actual costs due to lower donation rates, whereas larger organizations can spend much more without causing suspicion, keeping their percentages lower because they receive more donations. These numbers can differ based on the cause they support and the amount of man power and resources it takes to support, raise awareness and fundraise for that cause. I recommend comparing many organizations that support the same or similar causes to determine the successfulness of their projects. This will give you the best idea of what is “productive” for the type of charity you choose to donate to. If you do happen to run into a charity that refuses or is extremely private with their information, please use caution. It can be a red flag for non-profits to refuse dis-closure.

If you are considering donating through a crowd-funding website, please use caution. Unfortunately, there are many individuals who set up phony fund accounts to take advantage of the giving nature of people. While many of these accounts are for a good cause, it is wise to do as much research on the situation or cause as you can. Also keep in mind that when donating through crowd funding or third party sites like Pay-Pal, the third-party websites do keep a small percentage of the donation to cover the costs of processing the donations. I do not want to steer you away from this type of donation because there are so many good things that have been accomplished at the community level, from schools, homes, to even churches being saved from being condemned or closed families who go through unimaginable tragedies are saved from even more heart ache. The immediate relief you donations can give individuals is extremely valuable.

Regardless of your reason for donating or your choice of cause, your donation can make a huge impact on the lives of others. It is so important to be an informed donor and choose your charity wisely. Below I have provided some resources to help you in choosing. I also recommend going directly to the organization in addition to any third party websites that you use to research. I also encourage you to reach out to me if you have any questions concerning non-profit organizations. I would be happy to assist you in any way that I can.

www.charitynavigator.org Www.charitywatch.org www.givewell.org www.give.org