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Don’t Donate Money To Charity

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This is a Devil's Advocate post.

Donation BoxThis Devil’s Advocate post will cover something that’s bound to elicit a lot of discussion – here are four reasons why you shouldn’t donate money to charity. That’s right, you read that correctly, I have four reasons why donating your hard earned money to a charity is a bad idea and chances are there is at least one reason here that you didn’t even consider. If there was ever a Devil’s Advocate post to end all Devil’s Advocate posts (don’t worry, it’s not the last one), this would probably be one of them!

Americans are one of the most charitable groups in the world, having donating $306 billion in 2007 according to the Philanthropy Journal, an increase of 3.9% over the year before. While the donation amounts in 2008, a period of economic uncertainty, are not yet known, chances are Americans will still be sending hundreds of billions to philanthropic organizations… so in the face of that, I present to you four reasons why you shouldn’t donate money to charity.

You Already Donate

Whether you know it or not, you already donate to a lot of charities. When you pay your taxes, you’re subsidizing the operations of every single non-profit organization in the United States because they don’t have to pay taxes. When organizations receive subsidies or “investments” from the government in the form of grants, you’re more directly donating to philanthropic organizations. In the case of philanthropies that support individuals based on income (homeless shelters, soup kitchens, etc.), you are already supporting the individuals because your taxes go towards the welfare and food stamp system. It may be more efficient to donate directly to a local homeless shelter or local food bank, but you already donate to them and the people they help through your taxes.

Teach A Man To Fish

The old maxim of teaching a man to fish has and always will be true. “Give a man a fish, he eats for a day. Teach a man to fish and he eats for a lifetime.” Homeless shelters and food kitchens are wonderful if they are simply helping people get back on their feet, but far too many residents end up staying much longer than they would if the assistance weren’t so easy to come by. Withholding support to an organization trying to do good and making their lives much harder isn’t necessarily the best approach to effect this type of change, but it is an approach.

Administrative Overhead

All philanthropic organizations have administrator overhead costs to pay for. Many philanthropic organizations also have fundraising costs to pay for. When you donate your funds, a part of that goes to the administrative and fundraising costs – not the underlying cause. This is most true with your taxes, a donation you are already making! While you can check Charity Navigator to see the administrative overhead of almost any charity. The American Cancer Society spends 9.6% of its revenue on administrative expenses and another 21.8% on raising more money. Thirty cents out of every dollar you donate won’t go towards anything cancer-related.

Money Is Too Easy

It’s very easy to donate money to an organization, it’s much harder to donate your time by volunteering. When you volunteer, you have a much greater impact because you’ll probably volunteer as somewhere local. Those local organizations don’t get nearly as many monetary donations as the national organizations because they don’t spend as much on publicity! Also, many local charities, such as Habitat for Humanity, get a much larger benefit out of volunteers than they do from monetary donations. Finally, donating your time is a truly philanthropic act because you don’t get a tax deduction for your time. (The only exception to this is if you can otherwise make a boatload of cash during the time you would spend volunteering, then you probably should earn the money and donate that!)

I really struggled with this Devil’s Advocate post, probably more so than any other post, as my fellow Tweeters can attest to. In my tweeting about it, most of the responses that came back had to do with arguments against donating to a particular charity, rather than arguments against donating to charities at all! Ultimately though, I think the argument against donating to charities is pretty thin and comes down to personal preference. I don’t think you’re a bad person if you don’t donate (you may not have the means, you may not support any causes that have philanthropic supporters, etc.) just as I don’t think you’re automatically a saint for donating, it’s a personal choice that each must make on their own.

(Photo: mindfulone)

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84 Responses to “Don’t Donate Money To Charity”

  1. Jason R says:

    Certainly there’s a strong arguement to be made that you shouldn’t donate if you cannot afford it, say if you have a lot of debt. One could push that to it;s logical extreme and say that if you have any debt you shouldn’t be donating you should be paying down your debt (even your mortgage).

    • Jim says:

      If you have a lot of debt, it’s probably more helpful for you to pay down the debt and then donate more to charity. You can donate more if you don’t have the debt burden on your shoulders.

  2. Beth says:

    I think you had really good points — But the message I took away was to be more careful about how you donate.

    I can’t afford to donate much, but I avoid giving to charities that waste money on admin, (there are websites like the BBB where you can find that out). I try to give to charities that help people in the long run, not just giving them something to tide them over in the short run. (Except, of course, in the case of disaster relief).

    I totally reject the idea that as a tax payers, we’re already contributing (More of my tax money goes to politician’s expense accounts and paying for war than it does to charity).

    However, I totally agree with the last point though — volunteering your time is very important.

    • Jim says:

      This entire article was a bit of a stretch because I found it extremely difficult to argue against donating to charity. :)

      As I was writing it did become more of a discussion about “how” you donated or “who” you donated to, rather than being charitable in the first place.

      • saladdin says:

        Now that is a good idea for a forum post.

        “Who” do you donate to. I know there are lots of small local organizations that are out there but get forgotten because of the United Ways.

        saladdin

  3. The administraive overhead is exactly why I don’t donate to the United Way. Their cause is just, but they employ too many people. I use their website to find local charities, and donate straight to them instead.

    I don’t donate much money, but I try and donate my time, and I donate tons of blood.

    • Jim says:

      Going local is the best way to cut through the admin, I donate to local food banks for this very reason (and because it helps people in your neighborhood). I would argue that time and blood are almost more valuable than a few extra dollars in some cases.

    • Jackson says:

      Of course having a high administrative fee doesn’t necessarily mean the charity is less effective.

      But I completely understand what you mean because I sometimes feel the same way.

      • Jim says:

        Yes that is very true, but I find it’s a useful indicator that you can combine with other things to help make decisions.

  4. saladdin says:

    I say take care of yourself first then when you are in position to help, do so.

    Mark me down as one who donates but to select groups only (when I give to organizations). No god or republican based organizations. The majority of my donations are to individuals not organizations. Here when there is a fire and someone loses their home an account is set up at a local bank. People can send in donations.

    But I do mark the $3 donation box on my tax return. That count as donating?

    saladdin

    • Jim says:

      Haha, that $3 isn’t a “donation” because you don’t give them anything. That presidential political whatever donation simply tells the President (or whomever is in charge, I only say the President because he proposes the budget) to allocate a certain amount into that fund. :)

  5. Erik says:

    What a bullshit article this is. Don’t we have better issues to discuss? I donate to an organization directly. The money helps impoverished underprivileged children go to school. Yes, There are some countries where elementary school is not subsidized. So, Before you take too much credence in this stupid article…Find a organization who needs help and make sure the money is going where you want it to go. Maybe Devils Advocate can get off his ass and do the same. Now more than ever, those who have less than we need help!

    • Jim says:

      I donate to causes, both national and local, that I believe in so I think you’re statement that I should “get off my ass and do the same” is unfair. Second, you may think it’s bullshit but I think it’s valuable to inspect the things that we do, especially those things that we feel are above investigation, to make sure we’re doing it correctly. I was surprised to see some of the administrative overhead figures for the charities I support, something I wouldn’t have done had someone else not brought it up. Do I still donate? Yes, I just spread it around to different charities with leaner operations.

      People do need help and those who can help should help.

    • Jackson says:

      Have you heard of multi-tasking? Many people can do it.

      Like the ability to write an article AND do something else.

      It’s very cool!

    • michelle says:

      well I agree. But I won’t donate to charaties at all because once when I was younger I got beat up by my ex and had my baby son and sis with me. We left in the car 40 dollars in cash on us and nowere to stay.we went to salvation army and they said because there were some conficts that stay there that we can’t stay cause danger to the baby so what kinda shit is that?? This was in Muskogee OK the worst state on the planet…we slept in the car that night and drove as far as 40 dollars would take us wich was New mexico and geuss what? There was this nice family that seen me cause I got desperate and made a sign…she came to me and gave me a job in a apt complex and also gave me a key to a effecency she had opened…been living here ever since and just love this woman to death!! So no I will NEVER give to charity!!

  6. jimmydageek says:

    Your heading really ought to be changed to “Don’t JUST Donate Money to Charity.”

    You Already Donate: I think this is kind of lame. I have no control over what my government does. It’s policies ENCOURAGE people to be poor. Why are there 4 and 5 generations on welfare, with 50 year old great-grandmothers?

    Teach A Man To Fish: I refuse to donate solely to organizations that just hand out stuff. I do donate to organizations that help people help themselves.

    Administrative Overhead: I donate directly to charities. It is unreasonable to expect most charities to run efficiently and effectively without paid staff and fundraising costs. Of course, there are extremes. If you search “pallottine fathers charity scandal,” you will learn of a group that spent more than 90% fundraising, because they ran a sweepstakes. On the other hand, there are communal charities where being the president is very prestigious and very expensive to the individual, because it is unpaid.

    Money Is Too Easy: There you have me. I spend a lot less time volunteering than I have in the past. BTW, you can *deduct your mileage* for volunteering.

    • Jim says:

      True, I struggled with this article because it’s difficult to argue against supporting charities and helping people when they’re down. You can already see how tenuous some of the arguments are :) but the value in these types of articles is in the discussion, not the original post.

  7. Terry says:

    Wow, I’m not even sure what to say about the teach a man to fish. The reference to homeless shelters… where do I even begin? MANY people in shelters are children. What are you teaching them by not supporting them? Over the past 20 years, there has been an assault on treating drug use, with the government forcing many treatment centers to adopt a ‘quick’ and outpatient solution. This forces even more of the most needy into shelters. I’m just totally dumbfounded you used homeless shelters as an example… and let’s not start about the housing crisis in this country. It’s one thing to advocate hard love, it’s another to succumb to the ‘let them eat cake’ mentality.

  8. I just help out my family. I gave away my car to a needy family member last year. I think the most important charity is your family. Can’t deduct that, obviously.

  9. Miss M says:

    I don’t really consider paying taxes as helping charities. Churches also don’t pay taxes, though only some of their activities could be considered charitable. It’s a tiny fraction of what the government spends, practically nothing. Overhead costs are why I don’t donate to certain charities, too little of my money actually goes towards helping the cause.

    I think your devils argument posts are a great way to approach a topic from another angle.

  10. katy says:

    I worked for memoreal slone ketterink in the planned giving office. The director got dying people to donate their estates after their death – BEFORE getting any help.

  11. Patrick says:

    Volunteering is the best way to donate in my opinion. Just as Jim said in the article, it makes a larger impact and you know you are truly making an impact. Too many times, people think that they donate a few bucks to a organization that they are changing the world. American’s in particular are too busy working long hours to make more money to think about volunteering to an organization or sharing their time to make their community a better place…

  12. Yana says:

    The greater part of my career has been volunteerism to senior citizens and (to a lesser extent) disabled people through the local volunteer center. I quit my affiliation with the agency in 2003, and “adopted” a client I’d had through them.

    As far as donating money, I don’t like giving to organizations because they dictate the help received, and my concern is for the individuals. I don’t like the idea that “beggars can’t be choosy”, and feel that recipients should receive top of the line service or assistance, based on what *they* define as their wants/needs.

    When I hear people with incomes of $250,000 or more complain about tax increases, I think to myself that they ought to quit their charitable donations and consider the taxes they pay to be charity. If you blind yourself to the waste of tax dollars and look at what actually helps people, this is possible.

  13. Lynn says:

    Jim. Kudos to you for writing this post. It’s thoughtful and certainly controversial. I agree that just throwing money at a problem doesn’t fix it.

  14. Phil says:

    I like to look at “giving” from a more selfish point of view (huh?). There was an article written in 2007 on portfolio.com entitled, “Giving Makes you Rich.” They compared groups of people where the only discernible difference between them was that one group donated and one group didn’t. Here’s an excerpt that gives a reason why you SHOULD donate. . .

    “This is precisely what is found in the S.C.C.B.S. data: More giving doesn’t just correlate with higher income; it causes higher income. And not just a little. Imagine two families that are identical in size, age, race, education, religion, and politics. The only difference is that this year the first family gives away $100 more than the second. Based on my analysis of the S.C.C.B.S. survey, the first family will, on average, earn $375 more as a result of its generosity.”

    http://www.portfolio.com/views/columns/2007/10/15/Charity-Makes-Wealth

  15. Steve says:

    Jim, do not listen to the negative comments which attack you for opening a dialog about charitable donations. In our country, we too often blindly follow tradition and social norms, without questioning if these activities are still valid and effective. I encourage you to do more devil’s advocate posts…it may spark a necessary dialog which we have been avoiding for too long.

    • Jim says:

      Thanks for the support Steve, I knew this was going to be a tough one to write, my wife and I donate time and money and believe in the causes we support, but the point of these DA posts is to investigate the other side. Sometimes you look and decide that convention wisdom IS right. Sometimes you think of something you didn’t think of before. One person has emailed me already saying they didn’t know about Charity Navigator and how it could tell you how efficient at charitable organization is, I consider that a win. :)

  16. Dave says:

    I sometimes feel that I’m a jerk, because I donate exactly ZERO dollars each year to charities. I’ve donated cars, clothes that I don’t wear, and volunteered on weekends for some local charities, but I just can’t bring myself to donate cash. I very much believe in the ideas above (Teach a man to fish is the perfect analogy for my thought process). In my mind, the money isn’t going to get used wisely, and I’d much rather secure my family’s future than just give money away to someone else (who probably wouldn’t appreciate it).

  17. Michael says:

    Here’s another reason not to donate money to charity. It may not do as much good for the less fortunate as investing well. Charities are often poorly run, inefficient. In some cases they may well do more harm than good. On the other hand the companies that invented and popularized cell phone service, for example, may have done more good for sub-saharan africa than all charities in the last 10 years (or not), but the point is that commercial investments and inventions certainly do more good overall than pure charities. (Whether they do more good per dollar spent is another question.) I personally believe that investing in productive companies does more good than giving to charity. I still give to charity, but only for spiritual reason for myself, not because I think it is an efficient or effective way of helping the less fortunate.
    -Mike

  18. Andrew says:

    You could also argue that since you don’t know how much money you’ll need to finance the remainder of your life once you are unable (through job loss or disability) or unwilling (through voluntary retirement) to earn money through labor, you should make zero charitable donations and just bequeath your estate to your favorite charity upon your death. Problem solved.

  19. Beth says:

    I think we’re all overlooking something — one charity isn’t like another. How does one compare giving to the local homeless shelter, the Red Cross and the Cancer Society? Three very different things.

    I like the point about donating blood — I’d also like to add that planning to donate organs is something a lot of people overlook.

  20. Christine says:

    This article is really “how to vet charities worthy of donating to”. My husband and I try to give 10% of our income to charities and we are mostly quite picky about to whom we give. Many local charities, with low overhead, and what we consider to be worthwhile endeavors, whether that is “teaching to fish” or giving handouts, whatever is appropriate. I am fortunate to be a stay-at-home mom, able to volunteer a lot of my time in education/local schools. I disagree, however, that time is more valuable than money. They are both necessities and complimentary to each other. People should give what they can, sometimes money, sometimes cash.

  21. Ailee says:

    Another thing to consider is that when you donate through 3rd party sites, like justgive or facebook causes, those sites keep a portion of your donation as a fee. If you want your donation to go further, donate to the charity directly!

    • Jim says:

      Excellent point, I had no idea those 3rd party sites took a piece (which makes sense, they are offering a service in some cases).

  22. Jim says:

    I think if some people are getting upset at this post then they may missunderstand the point of a Devil’s Advocate post.

    While I think its important to support charities I also agree with the points made here.

    One item that Jim didn’t touch on is fraud by recipients of charity. Quite often charities do not vet giving and charity is fraudulently obtained. Or if not outright fraud then charity going to people who don’t really “need” it and are simply supporting irresponsible behavior. However, while this is something that does happen I don’t think it alone is reason to not give to charities. Its just something to be on the look out for.

    Another problem with charities can be that they can push their own agenda. The charity may have a religious or political leaning that is a core of their mission. This may be just fine in most cases but sometimes it causes the charity to discriminate or do other things that you wouldn’t want them to with your contributions.

    Having said all that, I want to be clear that I think giving to charity is good and I do so myself. But its a good idea to investigate the charity and be careful about which ones you give to.

    Jim

    • Yana says:

      I agree, especially with religious charities that push their own religion, and in fact consider evangelizing to be the charity. I have to mention along with that, that I consider the Salvation Army to be a very good and helpful charity. They have their religion, but real solid help is given to people regardless of their own religion or the lack thereof.

      I’m also suspicious of missionaries spreading the gospel to very needy people. The people need something other than being preached to, and they need it very badly. This makes them vulnerable to exploitation.

  23. Lou says:

    I was amused to see an ad for fundraising materials – presumably one fundraises for a charity – directly below this post. Ironic

  24. The only thing that I donate to is medical research. Can you imagine how much better the world would be if we had a cure for cancer or had defeated aging, the slow death that is happening to everyone on Earth? I don’t donate to soup kitchens or starving children funds because they are just temporary fixed. Science affords us much more permanent solutions to the worlds problems, but most people think with their emotions instead of their brains and give money to things like PETA. I want to punch anyone who gives money to PETA.

  25. Yana says:

    Well, I think eating is pretty important, but what Arabic Student’s comment really makes me wonder about is how much money has been donated for how long toward medical research. I *can* imagine how wonderful it would be if science came up with unchanging facts for the betterment of health and longevity, but for me, I’d rather put my money toward real food than a very highly financed dream. The dream come true is for the recipients of the donations. Keeping such dreams alive seems more emotional to me than brainy. But definitely very charitable.


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