I work at a 501(c)(3). I’m good at my job and also have a lot of grad school debt.

If you can’t pay me enough to support myself/save some $/help pay off my educational loans, then I will leave. I will have no choice; I can’t default on my loans. Then the charity will be forced to hire someone ‘less skilled’ at my old job. The charity will suffer.

I help this charity be effective and efficient, and help draw in donations. Am I not worth the “high administrative costs?” Sure, you could hire someone off the street for dirt cheap, pay them next to nothing, and have “low administrative costs.” But I want to work here. I’m good at it. And it’s fair to compensate me fairly!

Great post! I saw this post from MSN money and wanted would love to hear your thoughts on microlending/microfinancing. I think this idea addresses your point about teaching someone to fish since organizations like Kiva are enabling entrepreneurs to reinvest in their businesses and also help their communities so “donations” don’t end there. Money is re-used through repeat loans which help to develop the economy in a “micro” niches which in turn help macro-economics.

Mike

I would go further to say that people living in poverty in overpopulated countries should either be relocated, or not permitted to reproduce. Problem will be greatly reduced in a very short time. But that would never happen.

Biggest reasons not to donate to charity:
1. Duplication and waste
2. Those who “need” don’t need money

#1 Duplication and waste
How many organizations do we need to help feed under-privileged kids?

I think that we can generally that ensuring that all kids are adequately fed is definitely a noble goal. But who’s going to do it?

Aren’t the parents supposed to feed their kids?
If the parents can’t afford to feed their kids, don’t we have government programs to help support these parents?
If parents are irresponsible with money, don’t we have food stamps?
Don’t we have a social services program that will take kids away from negligent or incapable parents and ensure that those kids get fed?
So why am I donating money directly to an organization that does something the government already handles?

Sure, maybe “the government” is futzing it up. But we are “the government”. We are paying for, supporting & implementing that completely faulty program (or series of programs). So we’re doing a patch job.

Why don’t we just fix the problem?

The same goes for cancer research. Success in this field clearly benefits everybody, it’s hardly a special interest group. I mean, why not apply pure capitalism instead? Provide government-sponsored “bounties” for cures or improvement in treatment (a la X-prize). Make the bounty amounts relative to the occurrences within the population and the mortality rates.

Now we have a win-win. We the public get what we pay for and independent entrepeneurs can still become wealthy by solving the right problems.

#2 Those who “need” don’t need money
The people in Africa aren’t starving because they don’t have any money. There’s lots of money moving through corrupt government officials (it’s very well documented).

The people in Africa are starving b/c they can’t produce enough food to keep themselves fed. They don’t need a bunch of paper slips. They need land, farm equipment, gas and irrigation systems. They need doctors and condoms and education systems to help prevent the spread of HIV. So why is Bono running around lobbying governments to increase our donation numbers?

They don’t need money. They need a tanker loaded with farm equipment and high-yield seeds mosquito netting and medical supplies and a few beefy guys with guns to make sure that the farm equipment is being used appropriately.

Yes money could technically buy all of these things. But notice how most of the money is spent “here” rather than “there”.

First, I don’t buy the I am donating with my taxes line. I am forced to put money into bloated social programs that are mismanaged by the government and have resulted in generations of welfare dependency, but do not assume that all nonprofits receive Federal Grants. They don’t.

Regarding tax exemption, an organization having 501c3 status means they are exempt from Federal Income Taxes – not all taxes. Also, each state typically sets its own laws (and has a bloated application process) for exemption from property and sales taxes. Many nonprofits will pay some form of tax somewhere.

Someone above said it, but do not assume that just because there are highly compensated executives, that a charity is wasteful. Sometimes, the best leadership is worth a little more. Top organizations often compensate their CEO’s around 1% or a little more of total revenues. Look at the results the CEO of Boys & Girls Clubs of America is getting vs. what Ken Lewis did at B of A. Give me Roxanne any day!

Then regarding the use of Charity Navigator. it is definitely a site I like and I really enjoyed the blog of their former CEO, Trent Stamp. BUT and I think it is a big one, MUCH of this data is outdated. I looked up 3 charities I personally donate both money and volunteer hours to in my town (Atlanta). Two had reasonable ratings, but one came up 2 stars – most people would turn away based on that, but the data is old. This organization is part of a larger national nonprofit who realized they had become inefficient. So two years ago they undertook a nationwide consolidation of their administrative functions – their admin is now 1/3 of what it was 2 years ago and their numbers reflect it. BUT the Charity Navigator data is almost 3 years old. If it were current, this organization would rank close to 4 stars using their evaluation criteria. But all people see is the outdated 2 and possibly move on. Charity Navigator is fine as a tool to help, but dont base your decision on it solely. Look at the age of the data. Get the 990 from the nonprofit yourself and run the numbers – then decide.

OK – this is getting long!

I do think this is a great post (and really enjoy your blog), but don’t think this time you gave people enough information to make a fully informed decision!

I’m sorry, but donating to stop the “slow death that is happening to everyone on earth” isn’t going to solve everything because people in developing countries won’t be able to afford the expense medications and they’re going to die anyways. You’re just saving the rich people who can afford it. How logical is that?

I’m not knocking giving to medical research — I think it’s important too. I’m just saying don’t look down on other people because the decision to give to anything is emotional moreso than logical.