A little more than a year ago, I published an article criticizing charities which spend large portions of their budgets on administration, and relatively little on overhead. Today, I’m here to rescind those comments, explain why, and hopefully point out a few key factors in choosing where to give your spare dollars.
While it may sound like a good idea to donate to a charity that spends 80 (the Canada Revenue Agency standard), 90, or even 95 (what many consider the optimal ratio) cents of every dollar on actual aid (as opposed to administration), charities are just like any workplace - to be successful, they have to invest in training, talent, equipment, and other costs that fall under the dreaded “administration” category. That’s not a bad thing, though - imagine how well a public school, for example, would function if teachers were paid minimum wage, only needed their high school diploma, and the most high tech equipment used Windows 98 (although that last one does sound a little like BRHS). While that may be an extreme example, the point remains valid. Charities, especially national or international organizations, deal with incidents far larger than what most employers could ever dream of, and yet we expect them to keep costs absurdly low for businesses that size. The fact is, we don’t want those responding to incidents such as the Deep Water Horizon oil spill, Hurricane Katrina, the Fukushima nuclear meltdown, the Indian Ocean Boxing Day tsunami, poverty in Africa, or of course climate, to cut more corners than Ford did on the Edsel. I’m not sure about you, but I’d rather give to a competent, professional corps of experts who spend 20 cents of the dollar on administration than a well-meaning but ill-equipped, untrained and unprepared group of volunteers who only need to buy the cardboard for their picket signs.
To clarify: I’m not saying amateurs are incapable, irresponsible, or should not be supported - I was in that position for many years, and am incredibly grateful for the tremendous support we received. What I’m saying is that when it comes to putting boots on the ground to coordinate major relief, humanitarian, environmental, or other such projects, I’d always put the experts in charge, and if those experts need to spend 20% or more on administration to get the job done effectively, I’m okay with that.
Likewise, I’m not saying the charity with the lowest amount spent on action is the best to donate to - hardly so. All I’m saying is that when donating to charities, be mindful of exactly what your money is going to, beyond simply “administration” and “action.” Is the money in administration going to overpaying the CEO, or is it going to sending talented and well-equipped doctors to the most remote corners of the earth to treat diseases we haven’t worried about for decades? Is that 97 cents on the dollar that goes to action being used to support your community and fund informative local events, or is it being squandered by those with good intentions but without the understanding of how to put it to use?
Like most things, there is no right or wrong answer to the question of which charity to donate to - in the end, it’s your money, and your decision. All I’m asking is that you do a little research, see what the organization stands for, what they do, and how they use what you give.
Carsten MacLean is a second year student at the Royal Military College of Canada in Kingston, Ontario. He is currently in the last weeks of his Basic Military Officer Qualification. The opinions above are strictly personal and in no way represent the views of the Canadian Forces, Department of National Defence, or the Government of Canada.