I have pretty well decided on this. I still struggle, however, and you may too, so I am writing about it. That is, I concentrate my charitable donations on only two organizations, with the exception of small donations now and then as a favor to friends, and turn down all others.
To say this in the face of the recent terrible storm is not easy. I strongly believe that if you do not already have an existing plan for donating to selected charities, you should give to the relief efforts. But if you have an existing plan that takes up virtually all the money you have allotted to charity, you need to think carefully, because whatever you give to one group comes out of another group’s pockets.
I suggest that if you believe that human need in times of disaster is so compelling that it is incomprehensible or immoral not to give to relief efforts, then a relief agency should be your main charity of choice all year, every year, to the exclusion of other causes, because disaster happens constantly and everywhere. When one person is made homeless because of an apartment fire, he or she is no less homeless than one person made homeless among thousands due to a storm. I do not believe it is right to give only to famous disasters.
In relation to this topic, I have a party question, or, rather, a set of questions, that causes people in the vicinity to turn and look. These have the dual traits of being a just a bit invasive yet allowing people to boast, which is ideal for party talk. You should try this. People may stammer a bit at the start, but their ultimate responses are fascinating.
Namely, what is the thought process that went into choosing your favorite charity over others? There are so many deserving causes out there – why did you choose your favorite cause? And why did you choose that particular organization over others that have the same goals? Even if you give to many charities, there is probably one that got more money than the others. For what reason or reasons?
After all, how can you say that clean drinking water should get more money than preventing child abuse? Or how can you say that a ballet school should get more money than a university? Should relief efforts for an earthquake take precedence over cancer research? How can you deny all the worthy causes out there? How can you judge between them?
There is a huge range of responses, and we all should contemplate why we want to spend our money on the organizations we do. For one of my friends, it is tax simplicity with no particular emotion. His employer has an arrangement with one particular disaster relief charity, and withholds pretax money from his pay and gives it to the organization. For another friend, the specific unique nature of one charity moved her so much that she wanted to give all her donations to it alone; there are no other organizations like it. Another friend has an emotional stake in a particular cause, but she chose one organization in particular because of its special methods, which she believes are the most effective means of getting things done for the cause. And one friend chose a very local charity so that she can make unannounced visits to see what they are doing.
For me, efficiency in use of money is key. I chose my #1 charity because there is only one category, one cause, where I have deep enough knowledge of the topic to decide confidently which particular organization is most efficiently run. Oddly, it is not the field I work in, of which I know only my little corner; instead it is the one field, rather obscure, where I can look at an IRS Form 990 (the tax return for nonprofits) and understand what I see well enough to compare organizations.
I chose my #2 charity, a very tiny one, because I have observed them in person and know a couple of specific items they need. I can have these items direct-mailed more cheaply in bulk than if the group purchases small quantities from local stores, and I know that they will use up these things completely. The efficiency of my gift is total.
If you are only giving to a charity or charities with small gifts here and there, you are not doing yourself any favors, and you are not doing the organizations a favor. Asceticism, i.e. discipline, is needed here. Give a lot, and give with focus.
Research shows that when people give a significant percentage of their income, they are happier. So be generous.
Furthermore, if you are giving to more than a few causes, then you are wasting money, because it costs charities a surprising amount of money per person per year to maintain their lists and make appeals. The more you focus your gifts, the fewer the organizations you give to, the more money goes to your cause.
However, now that I’ve picked a couple of causes to commit to, I find it’s still hard to resist appeals from other organizations. There are constant disasters riveting the world’s attention. There is one charity that sends such wonderful pictures causing me so much delight that I once spent a couple of hours going over their elaborate mailer before deciding not to donate. Other causes I feel great sympathy for, even passion, but I am not able to evaluate them as well as I can my chosen causes. It is difficult to turn them all down, but it is the only way not to dissipate my efforts and waste the money.
But many people have no organizations at all that they are able to evaluate, or they lack a sense of the causes that are out there, so they do not even have any organizations to evaluate. So I am going to present some links I have found helpful.
- “Manage Donations to Charity With These Warren Buffett Investment Strategies” is a very good overview of how to approach the topic.
- Charity Navigator is THE foremost source of information and evaluation of charities.
- And you can read the actual IRS filings of nonprofits at Foundation Center’s 990 Finder.
Do they still say “HTH” on forums? “HTH.” Hope this helps.