What you don’t know about charities could cost you money

Charities are BIG business. Over 3/4 of US Citizens contribute something on an annual basis, and some of the biggest charities are bigger than many companies. For example, the American Red Cross has annual expenses of over $5 Billion!

In my research on charities for the Blog Action Day on October 15, I’ve come across some intriguing information that I’d like to share with you. I’ve organized this in terms of the questions I asked and the answers I found.

Are you ready?

Q: We’ve recently had a big Tsunami, earthquake, hurricane, etc…should I clean out my closet and donate those old jeans to charity?
A: Don’t do it! Charities report that they are innundated with old clothes and food stuffs after announcement of a major tragedy. Such items cause logistical nightmares of storage, organization, and shipment for the organizations involved. Rather, give money. It may seem hard-hearted, but more targeted help will then reach those most in need.

Q: I’ve been seeing more of those point-of-sale calls for donations at my supermarket. What’s going on?
A: In technical terms, these are called ‘proximal prompts.’ Chalk it up to candy bars and the National Inquirer.

Charities are cashing in on our entrained response to ‘impulse buy’ at the checkout counters. Add in that you are asked by someone familiar to you and the amount is small—a dollar or two—and you’ll probably do it. Likewise when you are writing out the check for your utilities. Go ahead, you’ll feel better!

Q: When I donate personal services, I feel physically better, too. Why is that?
A: You’ve connected with something that psychologists call the ‘helper’s high.’ Altruism will actually lower your blood pressure and increase the endorphins in your blood stream. You may donate money or services, but you get something really important in return.

Q: How do non-givers use neutralization?
A: Fundraisers often appeal to an individual’s sense of values or ethics. This may stir up cognitive dissonance for non-givers leading to feelings of guilt and discomfort. Their defense is an elaborate series of rationalizations called naturalization: If I can find enough reasons why I don’t need to give, I won’t, and I won’t feel bad about it, either. Fund raisers haven’t yet found a way around this one.

Q: Who gives more—the rich or the poor?
A: According to John Stossel , although the rich give more in dollars, the working poor give almost 30% more in terms of percentage of income. The middle class comes in a disappointing third.

Q: Who gives more, men or women? Young or old?
A: Women, for the first. The second question is not so simple. Older folks have more discretionary income, but don’t count the young people out. If you widen the definition of charity, they often are extremely active. Take, for example, their good work in giving goods to charity shops, buying fair trade goods, recycling, campaigning, and taking part in charity events.

Q: I’m not Scrooge, but I want to be sure 100% of everything I donate will go to the people in need.
A: Good luck! If a group pledges this, they are not being entirely honest with you. A charitable organization is just like any other business in that regard: they do have operating expenses. The key is keep these as low a ratio as possible. Good charities do this. On the other hand, if it costs a group as much to raise funds as it is dispenses in services, you’ve got a real lemon in your hand.

Q: Are there different types of givers?
A: Oh yes. Tom Farsides divides givers into selfish and altruistic camps. The selfish folks want something back for their money: they’ll buy candy bars and giftwrap from the kids at the door, enter fun runs for the T-shirts and social prestige, buy a brick with their name engraved at the local zoo.

The altruistic camp has internal motivation to help those less fortunate.

Neither side is better or worse, but what appeals to one group will simply irritate the other. Nobody said that fundraising was easy!

Q: Which type am I? 
A:  Good question!  Try this quiz on your fundraising style to find out.

Q: What’s a 990 and why is it important to me?
A: This is the tax form that Charities are required to file with the Federal Government. Important to you for several reasons: Not all non-profit groups are charities: you won’t be able to take a tax deduction for donating money to those that are not. This tax form will distinguish between the two for you. Also, it gives you a good rundown on how the funds being collected are being used.

Q: Numbers make my eyes glaze over. Is there an easier way to find all this out?
A: You bet! Just go to one of the major Credit Watch companies on line and check out their evaluation of the charity in question.
Some of the best are:
Charity Navigator
American Institute of Philanthropy
Better Business Bureau’s Wise Giving Alliance
Charitable Choices

Q: Thanks?
A: You’re welcome!

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About Author, Pegasus Quincy Mystery Series

I write a mystery series about a young rookie deputy on her first assignment in the Verde Valley of Arizona.
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