Big Heart, Smart Wallet

Big Heart, Smart Wallet

‘Tis the season when your mailbox is stuffed with envelopes asking for donations towards the given postage labels, catalogs proclaiming that purchasing a goat for a needy village is what your mother really desires and an infinite number of letters with pictures of sad, abandoned kittens, polar bears looking for the disappearing ice, or trees vanishing from rainforests.

Every organization, every bell ringer, and every charity is looking for—well, begging for— your generous donation. It happens almost enough for you to pull an Ebenezer Scrooge pre-visit from ghosts and ignore all of them. You want to help. You are a generous person, but sometimes it feels like you are not seeing any positive results from your generous donations. And there is an absolutely real chance you won’t.

The horrifying truth is there are a whole lot of charities that work within the limits of the law, that complete all the necessary paperwork, file all the correct tax forms, raise millions of dollars every year from unsuspecting generous donators, and do not spend any money on the actual charity. The charities can rent offices, hire employees, pay CEOs a whopping big salary, but never actually accomplish what they say they will. As long as the paperwork is filed, the receipts are kept, and the inner workings are within the letter of the law, these operations can exist.

Many years ago when my husband and I were young—struggling with a capital “S”—and raising two kids, a solicitor called my generous husband and asked for a donation so some children could attend an entertainment event. The pitch had it all—orphaned kids in need, a fun activity, and a respectable sounding name. Apparently for a few years, every time this organization called, my big-hearted husband found a way to give and give generously. Then, one year they called and I had just discovered a new online tool—charitynavigator.org. We plugged in the name of the organization; there in front of us was the heart-wrenching proof that this organization did not spend donations on those orphaned kids in need. Most of the three million raised the year before was used for fundraising and CEO compensation.

Now, whenever I give any money to charity—other than to those in which I see immediate local impact, such as schools, places of worship, and local community centers—I check out Charity Navigator and decide if the group is doing an effective job with our money. My other personal caveat when it comes to charities is that I do not want the CEO to earn more than the President of the U.S. ($400,000). This is just personal opinion and there are some I’m sure could explain why earning more than the leader of the free world is acceptable, but I’m pretty firm that I do not want my contribution lining the pocket of some CEO’s Italian silk suit.

The charities are rated on a star system; the best rating is four stars. These are the only charities I donate to. There are too many organizations doing a really good job at spending money where they said they would, displaying transparency, and carefully spending the raised monies on expenses. There are also hundreds of zero star charities.

One of their representatives knocked on my front door one hot summer day. Dressed in a spiffy outfit, he earnestly described his transformation from troubled youth to saved adult and was now trying to save the many others calling out for help. I was moved, but I was also smart. I went to my laptop and typed in the name of the organization. When the zero star rating came on the screen, he seemed visibly shocked and as we explored why, he was terribly disheartened. He thought he was saving kids and instead he was paying a six-figure salary to the CEO. (That particular CEO is certainly not the worst. There are some who are earning millions of dollars.)

The reality is people have begun using this site and others (such as Charity Watch) to check up on their charities, and many are refusing to participate. Thus, another rule of this woman’s purse strings is: if they aren’t willing to be listed and are not completely transparent, no donation.

So, before you send that check to save the world, check charitynavigator.org or charitywatch.org and make sure you are investing wisely. We want to see a change in the world, but that does not mean we have to be swindled out of our currency.