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How much % of ALL profits are charities actually getting?





Denvis
I live in Australia and in my country we're very big on the whole charity thing (at least I think we are). Anyhow, there's this one particular charity everybody seems to know. That charity is The Salvation Army. They provide shelter for the homeless and all sorts of stuff and I'm curious if anybody knows exactly how much of all the profit they make, actually goes to helping the people that need help (let alone the 3rd world countries).

Considering the salvation army advertises a lot on television and radio, pay people to ask for money (I had a friend who took the job where they were given some of the money people donated) you'd imagine a lot of the money gathered goes towards the organisation itself and people who were paid to do it.

See, I'm very skeptical about this topic and since my mates and I volunteered to take part in one of their 'Red shield appeal' event (which is basically, going around door knocking and seeing if anybody would like to donate) I was wondering should I even make the effort if most of that money people are giving doesn't go to people that need it.

I did it last year and gathered roughly $300 over a period of 4 hours however in a span of 2 days. I'm having doubts that, that money is going towards people that need help. I don't know, is it worth doing it if most of the money actually goes to their organisation rather than helping others?

What about the people who donate, thinking all of that money goes towards helping others. It seems like I'm lying to those donating. Sounds like a big scam.
menino
I've also always wondered about charities, Denvis.
I believe that for a lot of charities, about 40% in general goes to administration, but can differ from charity to charity.
I think that for CRY (Children's Rights and You), it is about 40%, last I heard, but its still ok, as a lot of children do benefit from it, especially in India.

But for others, I do wonder like you how much actually goes to the actual cause.
ocalhoun
It does vary from charity to charity.

I like what the US government does for its employees:
They ban all solicitation for donations, but once per year, they do the soliciting themselves. They publish a little book with every possible charity (from the Salvation Army to the Irish Republican Army (and, of course, lots of charities without 'army' in the name)) each listing in that book includes a short description of what that charity does, and -- most importantly to this discussion -- a percentage of funds that charity uses for itself rather than its mission.
Typically, that percentage is in the 20% to 30% range, though some had as low as 11% or as high as 60%.
The important thing though, was that it was published right there, allowing you to choose the charities that would make the most use of your money.
deanhills
@Denvis. I've been through that too. Why do anything for a charity when only a percentage of the collection goes to the people who are really needing it. Just does not make sense. But perhaps that is happening with everything in the world these days, including Government with regard to education and health services. Bureaucracy comes at a huge price. The Charity uses a PR Agency, someone who is a professional charity campaigner, etc. etc. and they charge high fees.

Not sure what the solution is. As it does feel good to do something for charity. Maybe you just need to make a study of other charities that are available and do some work for them instead.

Pity about the Salvation Army however, as they do plenty of good things. One service that is not always that visible is people looking for missing persons, especially teenagers who have gone missing. Like anything else however, maybe they have to rationalize their organization, as it may have gone stale with too much money going into paying people and services relative to whom the money is intended for.
Ghost900
Charity Navigator has a lot of Charities and brakes down exactly what is used where. I know that Compassion International is on there but when I looked up The Salvation Army it mentioned not being on there.

I like when the charity shows what they do with the money as it shows they think they use it wisely. Check around Salvation Army website to see if they have any info.
No info = Hiding Stuff. Ok, not always. Very Happy
BigGeek
Ocalhoun what you are seeing is what the federal laws dictate for use of charitable contributions for overhead. It was about 15 years ago I was helping a friend of mine get his girl friends charity started. She explained that for the 1st five years a new charity can take up to 60% of the donations and use them for overhead, after that the percentage they can use for overhead drops. Typically, over time it drops to 30% and pretty much stabilizes at 20%. The charities that you see down to around 11-10% are doing so voluntarily, as that is not dictated by law.

I used to give money every years to United Way through IBM, as they would campaign for contributions twice a year. I then read that even though they were only using 25% of their contributions for overhead, that because they had huge donations made by so many big name athletes that they were able to pay their director $750,000.00 a year, plus own and maintain a Lear Jet for him to fly around in, and pay for his home, car, personal chef, and numerous other perks. I thought I already contribute to my CEO's greed selfishness with my labor efforts, I'll be damned if I'm gonna give money to someone doing it.

Plus charities like the Red Cross do things like never ever account for the use of their donations, and how much they collect compared to what they spend on a certain project. Like the tsunami in 2004 when they only spent a 3rd of what they collected in relief efforts, and when they were questioned about it, they said that they had the right to spend the donations where ever they want to. If they have more than is needed for a particular disaster they can put it aside for other expenses. Like the Red Cross pays Bob Dole's wife 1 million per year to be their spokes person. Shocked

Yeah charities are in many cases a scam and the folks running them are making a substantial profit from your donations, and calling it overhead. Laughing
SonLight
The American Institute of Philanthropy discusses the Salvation Army at:

http://www.charitywatch.org/articles/salvarmy.html

The Salvation Army is a church organization, so they are exempt from most nonprofit reporting requirements. Apparently they shared audited financial information with AIP but do not publish it. AIP gives their handling of finances a high rating. They do warn that their charitable operations lack an independent governing board. While that may be appropriate for them due to the nature of their organization, the public might have difficulty finding out if they changed their policies in the future.

Personally I have confidence that the Salvation Army has good intentions and a commitment to providing the best service they can with the money they receive. Whether the internal checks and balances will keep them properly focused over the coming decades remains to be seen, but apparently they have been adequate throughout the twentieth century.
missdixy
Ghost900 wrote:
Charity Navigator has a lot of Charities and brakes down exactly what is used where. I know that Compassion International is on there but when I looked up The Salvation Army it mentioned not being on there.


I was about to say that there is probably a website out there with information for each charity regarding their income breakdowns! haha. This website is actually pretty good, thanks for posting it Ghost. I'm definitely going to be saving it for when I finally have a job and can afford to donate =]
goutha
Well it depends on the charities. But the bigger the structure, the higher the percentage that is spent to make it work.
erlendhg
ocalhoun wrote:
It does vary from charity to charity.

I like what the US government does for its employees:
They ban all solicitation for donations, but once per year, they do the soliciting themselves. They publish a little book with every possible charity (from the Salvation Army to the Irish Republican Army (and, of course, lots of charities without 'army' in the name)) each listing in that book includes a short description of what that charity does, and -- most importantly to this discussion -- a percentage of funds that charity uses for itself rather than its mission.
Typically, that percentage is in the 20% to 30% range, though some had as low as 11% or as high as 60%.
The important thing though, was that it was published right there, allowing you to choose the charities that would make the most use of your money.


Wow, that is really good! How come you know? Are you employed by the US government? Razz
I think the percentage that charities are allowed to use on themselves are regulated by law here in Norway, on a regular basis.

What I think is really great, is that we have a student's organisation here in Norway, which in turn funds an voluntary under-organisation called Operation Dayswork. Most schools in Norway are connected to OD, so that every year, the students are allowed to go out and find a place to work for one day, where all the economic income go directly to OD. They also guarantee that all of the the income made by the students, go directly to its mission. Every year a new charity mission is selected by the students.
guissmo
I've been seeing news about some businesses that advertise that "a portion of the sales go to charity" don't really live up to what they say. Instead, they go to some other organization that's supposed to be the ones to give them away, but in reality, they're just pocketing the money.

I'll try to find the source. I'll post it if I can.
achowles
Charities vary greatly, but most spend a lot on agencies (such as those who send people out in the streets with clip boards pestering people) advertising and bribing barbaric warlords so as to make sure that their aid convoys make it to their destination safely. The last one in particular seems pretty counter productive to me.

Then of course there are those that are merely fronts for terrorist organisations. Yes, you've got to be careful. Either do plenty of research before donating or stick to the most prominent and respected charities.
deanhills
achowles wrote:
Then of course there are those that are merely fronts for terrorist organisations.
Now that sounds like an interesting phenomenon. Do you know of any?
Afaceinthematrix
As Ocalhoun said, it varies from charity to charity. I think the best solution is to simply look at the actual results of the charity. Many charities, on their website, publish information on their accomplishments. If they do not have this, then I tend to not trust them. It's easier for me to donate my money to a charity (such as the American Red Cross) if I can see exactly what they have accomplished with the money donated to them in the past.

Another solution is to donate goods to a charity - that way you know what the money that you're donating (in the form of purchasing goods) is going to. The Salvation Army here will give clothes to the needy. So donate clothes instead of money. That way you know that they're going onto someone's back. If there's a soup kitchen, donate canned goods. I prefer donating the goods versus the money. Most charities that are really in it to help people will take the goods just as thankfully as they will take cash donations.

The percentage is, of course, tied in to how well the charity is ran. My grandfather used to live in West Africa when he was my age. Over the years, after being back in the states, he has always had the desire to help the people back there (as many of them are in desperate need of hep). Many of the people there do not have access to safe drinking water. So he created a charity years ago that makes wells in many communities which provides access to safe drinking water. You know that the money is going to a good cause because he can show you hundreds of pictures of the wells that have been built. He can show you pictures of safe drinking water. The charity has been successful because he runs it efficiently. He and my grandmother run it so there is little to know cost to running it. He has volunteers IN West Africa that help handle the operations over there. Furthermore, he only supplies the supplies - the communities build the wells. So he does he fund raising here, sends the money to his volunteers over there, they purchase the supplies, they then build the wells. There's almost no cost to keeping the charity going except for minimal advertising and fund raising start up costs... And he has proof that he has actually helped many people...
achowles
deanhills wrote:
Now that sounds like an interesting phenomenon. Do you know of any?


I forget the name, but one in particular gained infamy not so long ago as it came to light that a number of Hollywood celebrities mistakenly supported it. No, I don't mean Scientology. Razz

Then there's PETA, which is a more famous one, known for knowingly financially supporting the fire-bombing of animals, mass slaughter of domestic pets as a part of their attempts to free animals from 'slavery' and generally being counter-intuitive to the point of outright insanity.

There are a lot of other fronts for terrorist organisations out there. But most tend to disappear (one way or another) when they're discovered.
ocalhoun
deanhills wrote:
achowles wrote:
Then of course there are those that are merely fronts for terrorist organisations.
Now that sounds like an interesting phenomenon. Do you know of any?

Remember the US government-sponsored list of charities I mentioned?
The Irish Republican Army was on it for several years... Yes, the exact same group behind bombings, et cetera in Northern Ireland. So, for years, US government employees were officially solicited for donations to a terrorist organization.

Also, in the wake of 9/11, the US shut down many businesses -- some of them charities -- suspected of supplying funds to Islamic terrorists.
menino
Yes its unfortunate that some charities pose as terrorist funding fronts.
Its funny that charities are a business in themselves rather than providing for the actual needy.

I think its ok to charge some percentage, or probably deduct it from normal dad-to-day administration costs, but really cater to the charities / the needy people at hand.

The poor people in Africa are still sufferring, due to political reasons mainly but also the economic situation, and I do believe that very little help is being reached there, in the sense that the food supplies are then obstructed by militia by way of force and then used for their own purposes, rather than let the needy use it. This is something that the charity cannot control, but the Governement needs to be involved, by way of United Nations or a general body / force, to ensure that the charities are catered to.
Thats just my opinion.
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