This country has a very long tradition of charities meeting public needs, a tradition that goes back at least to 1847, when the French author Alexander de Tocqueville wrote the still-quoted Democracy in America. He said that Americans' tendency to form “voluntary associations” was one of the most striking things about this country.
Today there are more than 1.1 million charities registered with the IRS, though only about 300,000 are large enough to file annual tax forms. Most of them depend on donations from individuals like you. Indeed, in 2019 individuals gave more than $450 billion to charities.
It’s great to have so many charities to support. But how do you decide which charities?
The traditional advice is to make sure a charity is actually a charity and that it is “accountable.” To determine this, many people focus on how much a charity spends on fund raising and administration, vs. doing its charitable work.
Accountability is important. Not spending too much on fund raising and the organization itself is important. But it’s just one of many factors to consider when you’re ready to make a donation. And in many ways it is the easiest factor to check out. We tell you how to do this.
The other factors are much more personal. What and who do you care about the most? The homeless person you passed on the street today? Children growing up poor in the inner city or isolated rural communities? Families living in dire poverty in another country? Girls who aren’t allowed to attend school? Global warming? Animal abuse? You can address every one of these issues and many more by supporting charities.
Once you decide what you want to support, then you have to decide what is the best way to make a difference.
Is it supporting homeless shelters and soup kitchens? Or advocating for Food Stamps and more affordable housing? Your giving decision is in a way a reflection of your beliefs about how change happens.
Questions like these make the process of giving money both challenging and interesting. Your decisions make a difference. They add up. Nearly four of every five private dollars that go to American charities comes from individuals like you (vs. foundations and corporations).
No matter how you make your money, your decisions about how (and how much) to give away can make a big difference over time.
There is a quote from Andrew Young, an aide to Martin Luther King, that captures the importance of individual giving decisions. Young, the former Congressman and mayor of Atlanta, talked about the time that King was going to “white liberal cocktail parties” and churches to raise money for the charity that supported his civil rights work, the Southern Christian Leadership Council.
“Now I think about how much more we might have done if he had not had to spend almost three fourths of his time…raising money just to keep a piddling staff together to move this nation.”
But looking back, how would you feel today if you had been one of those people who had donated to King and SCLU? Your donation can make a difference. Here are some of the factors to consider as you make your donation decisions:
What about where a charity works?
Many people prefer to support charities that are working in their own communities. The work of such charities often seems more concrete. You can see it. Your neighbors or your community as a whole may be directly benefiting from their work. It may be easier to learn about the work of local charities because it is highlighted in a local newspaper, or someone you know may work with the group. You can work with the group and develop the kind of insight that only comes with close involvement.
But keep in mind that some problems that charities confront aren't easy to tackle at the local level. Climate change is a good example. You can certainly make changes locally, but the cause of the problem goes far beyond what you do in an individual community. Dealing with problems like these may require a regional or national approach.
Others believe that the people with the most desperate needs are those in extremely poor countries, thus they support charities that work internationally. The impact of this work can sometimes be more easily measured, which has become the focus of the group of wealthy individuals behind the GiveWisely.org website. (See Efficiency vs. Effectiveness.)
What about how charities help people in need?
Many people prefer to support charities that provide services directly to people in need: food for the hungry, shelter for the homeless, doctors for sick children. Nothing is quite as real and gratifying as concretely helping one person in need. Indeed, many people firmly believe that "charity" means providing a direct service to those in need. Nothing more. Nothing less.
Many others just as firmly believe that there are many ways to help people in addition to providing something concrete like food, shelter or health care.
They argue that it is also important to have charitable groups that focus on educating us about a problem we once knew little about, such as Alzheimer's disease, AIDS or deforestation.
Or it’s just as important to support groups that give a voice to those whose struggles may otherwise be ignored, such as the poor, minorities, animals, victims of crimes, people with disabilities and many others.
These people make an interesting argument: sometimes the best way to help the greatest number of people is by educating the public or policy makers or advocating for a program or law.
Take hunger, for example. No one would argue against the value of a food drive or a soup kitchen as a way to feed hungry people. But some would argue that the greatest long-term impact on the problem of hunger in America was made by those groups that educated the country about the existence of widespread hunger and pushed for the Food Stamp program in the 1960s. This program has helped feed tens of millions of children and their families during the following decade.
We are not arguing that one way of helping people is better than another, only that how a group helps people is an important factor for you to consider when deciding which charities to support. Our own personal preference is probably for charities that are able to combine providing services with educating people and doing some advocacy.
Keep in mind that every charity in this information service -- indeed, any organization that can receive tax-deductible gifts -- cannot engage in any partisan political activity. They can't work for candidates, endorse candidates, make donations to political parties or do any other directly political work. Charities also have limits on the amount they can spend on advocating for their issues, but charities do have the right to do advocacy and lobbying on policies they care about.
What about size and name recognition?
Some charities are known by practically everyone. Others are unknown to most people. Some are quite large. Others are tiny.
If you support a large, well-known charity, you can be pretty sure that this is a group that has been around for awhile and will continue to be around, that is big enough to have an impact and clout, that it will almost certainly have an audit and other policies to ensure accountability.
If you support a smaller, less well-known charity, your gift may constitute a larger part of its budget. It may be easier to get involved in other ways, such as by volunteering. Sometimes, smaller, local groups have a more active volunteer board, if for no other reason than all the board members are local people who can more easily get to board meetings. Your gift may help the group develop its programs and services.
We could make very strong arguments for supporting both kinds of charities. Again, it's your choice!
What about effectiveness?
This may be the most important question...but also the toughest to answer. Much advice about giving focuses on a charity's overhead and other measures of its financial accountability and its “governance” (does it have an active board of directors, etc?). See How to check out a charity.
But a group's programmatic accountability can be every bit as important. Are its programs or services or advocacy really making a difference for the people it is trying to help or the cause it is trying to advance? (See Don’t assume that efficiency equals effectiveness.)
The best way to determine a group's effectiveness is to somehow get involved with it...by being a volunteer, working on one of its committees, helping it raise money, attending its events or workshops, becoming a member...whatever you can do.
When you do become involved, you'll be able to see pretty quickly how organized it seems, how committed its staff and volunteers seem to be, how it treats its staff and volunteers, how helpful it seems to be for those it is trying to help, how efficient it is and much more.
If you can't personally get involved, try to find someone who is involved and ask them what they think about the group.
Short of this, talk to staff or volunteers and/or ask for and read material about the group. The fact that you can reach and talk with people at a charity is itself a good sign: there are some large charities (or tiny charities) that are close to impossible to reach, requiring you to leave a voice mail message or send an email to an “info” address and not responding in a timely manner.
If you do reach someone, here are some questions to ask:
- Does it have at least a simple annual report and/or newsletter?
- Do they give you a good idea about what the group does?
- Is it clear how the group is making a difference?
- Does the annual report include some information about its finances? Is there a list of people and businesses that support the group?
- Does the report make some attempt to evaluate its work, such as the number of people it served during the past year?
- Does the material make its work real, perhaps by talking about a specific family or community it helped?
We know many people simply aren’t going to have the time to do this. This is one reason we’ve created this website: to make it as easy as possible for individual donors to answer questions like these about many charities.