By Kim Gardey
Making a charitable contribution is a lot like making an investment. Just as you want to maximize the return on your investment, you want to get the most from your contribution. How can you choose the charity that will make the best use of your contribution?
What you want to know is how much of your contribution will actually be spent on providing charitable services. All charities incur expenses in soliciting contributions and in general administration. The crucial question is what portion remains after those costs have been paid.
Fortunately, there is a simple way to choose the most efficient charity, and this information is readily available.
The key number is the “percent spent on program services.” Ideally, you would like to have all of your contributions go toward the charity’s services. This is not a practical goal because every charity is going to have general administrative expenses such as salaries, rent, postage, printing, etc., that have to be met.
Let’s consider two charities that provide similar charitable services. Charity A spends 80% of the money it collects on charitable services while Charity B spends 50%. A $100 contribution to Charity A will provide charitable services of $80; the same contribution to Charity B will provide only $50—a difference of $30.
How do you determine which charity is most efficient in the handling of your contribution? This information is readily available by way of the Internet. One of the organizations providing this information, and the one our firm uses, is Charity Navigator (www.charitynavigator.org). To find the “percent spent on programs” for your charity, simply type your charity’s name in the “Charity Search” box, click on the charity’s name when it appears, then scroll down until you get to “Program Expenses.”
Using Charity Navigator, you can also find other charities that provide services similar to your charity and compare their levels of effectiveness.