Article By Dawn Smith
It is natural this time of year for military families to make mental notes as to their giving opportunities. Some are grateful for the fact they are healthy and happy, while others are hyper-aware of challenging circumstances--whether they are financial, health related, or stress from a loved one’s departure. Both of these scenarios are bridged by charitable organizations.
Although there is a wealth of information found online to investigate charities, over the last several years there has been a decrease in charitable spending. Military families are not immune to budget tightening with cost cutting measures across the board recently, in addition to the generally slow economy. Therefore, it is imperative to choose charity spending wisely when parting with your hard-earned money.
Many families choose to make a larger or additional donation to charities during this season of giving. There are millions of charities to pick from, and it is overwhelming to decide which one is right. Consider this a guide to help find the best fit for your money and to make the most of your contribution.
Make a decision to talk with your family about which causes are important in your household. The following are several examples of questions to consider: Will you donate strictly to military or veteran causes? If so, should it be relevant to your member’s military ties, or in broad terms like the USO? Environmental, animal welfare, and children’s charities are all very wide-ranging categories to investigate as well. Another thought to consider is the locality of the charity. Would you like to donate for an international organization or a neighborhood cause?
Research Resources
A resourceful way to investigate these questions and answers would be to study the following charity investigative groups. They offer in-depth statistical data, reviews, and ratings for each charity listed. Also remember that hands-on involvement and volunteerism are significant avenues for understanding the organization’s intentions and interworking.
GuideStar seems to be the hallmark for charitable giving research. A free viewing of an overall description of a charity can be found here. In addition, reviews from the public are registered on the specific charity’s page within GuideStar. GuideStar charities are all registered with the IRS and the basic IRS documentation is available to view. You may also pay for a premium service that further details the organization’s finances such as executives’ salaries.
Philanthropedia is a division of GuideStarand relies on expert and professional reviews for thousands of organizations.
Charity Navigator is also a major resource for supplying information. They provide a four star rating system to rank each charity based on its transparency, financial standings, and other pertinent categories for more than 7,000 organizations. Their website is exceptionally user-friendly and has a tab to specifically guide potential donors with tips for choosing judiciously.
BBB Wise Giving Alliance partnered with the Council of Better Business Bureaus for 1,300 national charities while local BBBs offer 10,000 more. The group uses twenty accountability factors in areas such as effectiveness and oversight. The alliance makes note of the charities that did not meet their standards and have not attempted to supply them with accurate information.
GreatNonprofits allows reviews to be written by beneficiaries and volunteers for more than one million charities. This is useful knowledge direct from the people involved. It is a partner with GuideStar, and you will see shared reviews.
GiveWell isa little different on how it evaluates charities. From their website: "Unlike charity evaluators that focus solely on financials, assessing administrative or fundraising costs, we conduct in-depth research aiming to determine how much good a given program accomplishes (in terms of lives saved, lives improved, etc.) per dollar spent. Rather than try to rate as many charities as possible, we focus on the few charities that stand out most by our criteria in order to find and confidently recommend the best giving opportunities possible our list of top charities."
Post-Research Options
After researching your cause on a couple of these sites, consider a phone call or meeting with the charity’s development department or with a board member if available. Donors are important and it isn’t abnormal for people to call and inquire about specifics such as mission statements, upcoming events, or future fundraising intentions. Major charitable organizations often have a substantial amount of this type of information directly on their website.
Be wary of several factors before donating. Charities that use pressure tactics for donations or are not forthcoming with important financial information are not likely to be the kind of organization you will be happy contributing to. Charity Watch is designed to specifically grade charities and highlight deficiencies in transparency or abuse and fraud activities. They serve as a watch dog type of entity to ensure donors a well-regulated place to send money.
Prepare to compare similar charities to understand how they are spending and see which makes the larger impact on the problem you hope to help solve. After this type of investigation, it is regularly suggested to pick the charity and become regular donors to achieve the most impact for your money.
Overhead and Extras
The concept of overhead is somewhat controversial when donating to a cause in which you are connected. Typically, donors want the majority of their money going directly to those in need, and very little for those who actually run or operate the charity or for costs normally associated with a for-profit business. This poses a difficult balance to strike. As donors, we like to see our money make the most impact on the beneficiaries, but this is difficult without things such as savvy advertising or fundraising opportunities which require funding.
A traditional standard for funding the charity’s primary mission spending is near the 75 percent mark. Activist and fundraising author Dan Pallota challenged this concept during his 2013 TED Talk about how to choose a charity. "It’s time to change the way we think about giving to charity. Don’t ask about the size of their overhead. Ask about the size of their dreams." This sentiment is echoed by GuideStar, Charity Navigator, and the BBB Wise Giving Alliance. Simply put, charities may not be the best because their overhead costs are low, while creative ideas and endeavors are squashed because salaries are subpar and modern technology is not available.
Another questionable topic is the product related to a cause, such as t-shirts or hats. Have you noticed how so many products turn pink in October in support of breast cancer awareness? Although the majority of companies have relationships with charities whose mission is to support breast cancer awareness, others do not and profits on those products never make it to the cause you think they do. It is even relevant to understand how much of the purchase price actually is donated to the cause you are trying to support. The total purchase price might only yield cents to the organization. Charity Navigator also stresses that the purchase is not a substitution for a contribution, but a bonus.
CFC and Estate Planning
The Combined Federal Campaign is a program that most military and federal employees are familiar with. Their mission states as follows: "The mission of the CFC is to promote and support philanthropy through a program that is employee focused, cost-efficient, and effective in providing all federal employees the opportunity to improve the quality of life for all."
Pledges are made by federal civilian, postal, and military donors during the CFC’s campaign season which runs from September 1st to December 15th. Millions of dollars in donations help fulfill nearly 200 CFC campaigns throughout the United States and abroad. Charities that rely on these funds fall under health and human service categories.
The military community is also exceptionally aware of estate planning, given how much preparation is involved with each deployment or even just because members are eligible for Servicemembers Group Life Insurance. Estate planning also encompasses charitable giving. Estate planning lawyers, wealth managers, and financial planners are useful when considering donations beyond your life span. These professionals can help investigate if the organizations are spending in the way the giver sees fit.
While the amount of information regarding charitable giving can seem overwhelming, it is my hope that the above resources will give you a good starting point during this season of giving.