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Charity takes lots of clarity

YOUR MONEY

Give some thought to these tips on how to find the right cause and the most effective way to help.

December 02, 2007|Kathy M. Kristof | Times Staff Writer

You know the holiday season has begun when the Salvation Army kettles start appearing at malls and grocery stores. This is the busy time of the year for charities in general, when about half of all donations made by Americans are given out.

"The October-through-December corridor is the big giving time," said Bennett Weiner, chief operating officer of the Better Business Bureau's Wise Giving Alliance. "Charities want to get a donation before the year is out and when the holiday spirit is in. Donors are interested in the same thing -- and about being able to claim a tax deduction."

But giving to charity isn't just about parting with some money. You also must decide which organizations should get your money. And ideally, you'd like to know that those precious dollars will be well spent. With pressing needs all around and more than 1 million charities to choose from, how can philanthropists ensure that they're getting a decent bang for their buck? Here are some tips from the experts.

Be proactive

Do some soul-searching before you reach for your wallet, suggests Judy Belk, senior vice president of Rockefeller Philanthropy Advisors in Los Angeles.

"Step back and think through what your budget is, your geographic interests, the passions that guide your giving," Belk said. "Instead of writing a check for the first thing that comes across your desk, think about what you're trying to do and what kind of impact you can have."

Of course, this approach is harder than simply writing checks to organizations that solicit you. But it also can be more rewarding.

Belk suggests first considering the things that make you happiest and those that you find most disturbing. If you love literature, for instance, you might want to support schools or literacy programs. If wiping out hunger is your cause, a food bank could be the way to go.

There are many ways to find a charity that fits your goals, Belk said. To find a local group, potential resources include the United Way in your area or your church.

Charity Navigator's website, www.charitynavigator.org, allows you to search for a regional, national or global organization that you might like to help. Charity Navigator, itself a nonprofit, also rates the financial health and efficiency of 5,300 large charities on a four-star scale. For example, one Southern California police charity gets no stars because it spends 85% of its money on fundraising, according to the website.

But another group, the Los Angeles Police Foundation, spends 94% of the money it raises on its charitable programs and rates three stars. Note that Charity Navigator doesn't rate groups on how effective their programs are.

Changing the Present ( www.changingthepresent.org) is a website that offers clever and colorful "gift ideas" from dozens of national and international charities in a wide range of categories, including disaster relief, public broadcasting and help for young people.

Focus your support

You may be inclined to spread your money around to as many worthy organizations as you can. But experts advise limiting the number of groups you support. Of course, the more organizations that you give to, the smaller the amount that can go to each group.

One reason that's bad is that small donations increase a charity's administrative costs. The charity will spend the same amount of time and money to process your donation, no matter how much you give.

Much more of your money will benefit the actual charitable programs if you give $500 to one organization than if you give $5 to 100 groups.

Not only that, but giving less than $100 or so also will sharply increase the amount of requests you get for donations. Charities commonly sell the names and addresses of their small donors to brokers who peddle lists of generous people. But charities rarely share the information on those who give, say, $1,000. They want to keep those donors for themselves.

"If you give an organization a small amount of money, they are going to forget about you as a donor, but they are going to sell your name to a million other groups," said Trent Stamp, president of Charity Navigator. "That's why when you give $20 to an animal group, you never hear from them again, but you will go to your mailbox and find 50 other solicitations."

In addition, by limiting donations to a few groups, you can spend more time researching the groups that you give to, Belk said. That can increase the effectiveness of your giving.

Evaluate carefully

The first step in checking out a charity is to see how it spends its money. Stamp says donors should expect that the vast majority of revenue be spent on "programs": the cause the charity purports to support. Any group that spends more than 25% of its budget on marketing and administration is not providing much bang for your buck, he said.

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