Charity- Where Does Your Money Actually Flow?

“Would you like to round up your total to the nearest dollar for our charity today?” This is a question that is often presented throughout the year at numerous restaurants, businesses, and especially at non-profit organizations. Charity, in my opinion, is a loaded word filled with misconceptions and misleading information.

Charity is defined as the generosity and helpfulness, especially toward the needy or suffering, as defined by Merriam-Webster. It’s so common now-a-days when making a purchase to have someone mention donating to charity. While the vast majority of charities do need and survive off of donations, many are simply taking your money.

For the Do-Gooder’s

Please, continue to make the world a better place! You’re the type of person who WILL round up your $19.18 purchase to $20, you are truly a honorable person and I thank you for it! There are also the people who are blind to what’s happening around them and will say yes to donations disregarding if they know the charity or not. These are the types of people certain charities prey upon for donations.

I have a close friend who is one of the nicest people you could ever meet, truly, she’s a great person. She’ll go up to random people on the street who are begging for money and won’t think twice about giving them half of what’s in her wallet, that’s who she is. One summer there were a bunch of us camping and a little girl continued to stop by our campground to talk with our friend. Nobody thought anything of it, she’s nice and she’s making a friend with the little girl who appreciates her kindness. We all began to pick on our friend when she paid the little girl $5 just to look at her pet rock, the little girl asked her for money to pet her rock…not the pet rock that was huge in the ‘90s.

This innocent girl who was no older than eight years old had swindled our friend out of $5 to pet her rock, this made me question what else had she been taken advantage of? There are hundreds, thousands, probably even millions of people who are unsighted to what’s unfolding in front of them. When in reality, these are the people who we should be emulating and looking out for, they’re the people who make the rest of us question what we’re doing when we look away from the homeless man/woman at an intersection.

How to Know When to Say No

One of the best ways to spot deception is to do some research. Take a few minutes to look at your favorite charities on Charity Watch or Charity Navigator to learn where your money is actually going. These sites do a great job of providing a grade/rating for your charity of choice to better inform you. It may also be advantages of you to look at their website to view their financial statements and annual reports.

Overhead is defined as all of the business expenses that do not include direct labor or materials used in creating a product or service, per Investopedia. It’s any expense that supports the making or selling of a product or service. A few examples of common overheads costs are rent, utilities, supplies, and insurance.

Charity overhead is a bit tricky however, as it can include training, planning, evaluation, and anything that can help them raise money. Many organizations don’t report fundraising of over $50,000, and it was found that nearly 13% of public charities don’t report management or general expenses. The more glaring statistic showed that 75–85% of these organizations incorrectly report costs associated with grants they receive.

When conducting your research, review the company’s mission statement to ensure it aligns with what you believe in. This will help you better understand the company and how they view the work they’re doing. It will also be important to see where the company is located. While they most likely will be in the United States, there are some that are located in other countries where financial regulations may be looser in how they report their annual earnings. Charity Watch and Charity Navigator will help give a better glimpse without having to conduct hours of your own research.

Don’t Get Caught Up

Just because you’re asked to donate doesn’t mean you always have to. If you have the urge to always donate, it means you’re a very generous, caring, and kind person, but it also means you may have an addiction. It may sound silly that feeling the urge to always donate is an addiction, but it’s true of anything.

Constantly needing at least one soda a day or needing a cup of coffee is considered an addiction. It goes the same for constantly feeling the urge to donate money. The consequences of constantly donating money can put you in a financial hole where YOU will be the one requesting donations just to get by.

So, keep making the world a better place, just make sure it’s for a good cause and you’re not burning a hole in your wallet to make a difference!