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Don’t Donate Money To Charity

This 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 [3], 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 [4] to see the administrative overhead of almost any charity. The American Cancer Society [5] 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 [6])