Charities - overhead vs programs

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zinfit
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Re: Charities - overhead vs programs

Post by zinfit » 21 Dec 2012 18:31

An excellent choice.
Shakespeare wrote:Just sent my donation to the Mennonite Central Committee.

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Re: Charities - overhead vs programs

Post by tedster » 21 Dec 2012 19:16

I see that Centraide of Greater Montreal is claiming 87% of collections going to programs. I am a little sceptical. I can see that they will pass on 87% to the organizations under their umbrella, but I doubt that those do not take their cut as well. Last year I asked them this very question, and never got a reply, so I cut them off my list. Same with the Montreal general Hospital. I wrote them a letter telling them why I cut.. they did not respond and the following week a scandal hit the news. Land deals etc. The Board should be in jail. I almost exclusively donate to women's shelters and food banks.

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Re: Charities - overhead vs programs

Post by Quebec » 13 Jan 2013 11:12

tedster wrote:I see that Centraide of Greater Montreal is claiming 87% of collections going to programs. I am a little sceptical. I can see that they will pass on 87% to the organizations under their umbrella, but I doubt that those do not take their cut as well.
You are probably right. But if the total overhead (Centraide + recieving charities) is reasonable, then there is no problem. It would be difficult to make that calculation of course (unless they've done it already themselves). To me centraide is a bit like an actively managed mutual fund: you don't know what you are investing in exactly. But if you trust the manager's judgement, then you can invest in the fund.

There was a nice portrait of Michèle Thibodeau-DeGuire, the CEO until the end of 2012, in L'actualité in December: link. Their strategy is to
...break the cycle of poverty by acting early in the life of poor children and target interventions in neighbourhoods where poverty is endemic" (my translation)
Also we learn that charities that ask Centraide for money are systematically evaluated, and trained to improve their governance.

In terms of the total overhead, the receiving charities may have lower fundraising costs than they would if they raised the money themselves by knocking on doors, etc. Payroll deductions and targeting rich families for large donations seems very cost-effective relative to other methods or raising money. A final quote from the article, coming from a donor giving $0.5M per year to Centraide Mtl:
There are 3500 charities in Montreal, but none has a business plan to fight poverty comparable to that of an investor, except Centraide.
I use to dislike Centraide, but without a specific reason (I probably thought they were too big and impersonal, unfocussed, or something, but I had not done any specific research or reading on them). I'm warming up to their "business-like" approach.

Cheers

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Re: Charities - overhead vs programs

Post by dlewis112 » 04 Apr 2014 10:16

You seem to be under the impression that charities' executives collect huge salaries because they are not regulated. They have Boards of Directors, audited financial statements, and tax oversight just like a for-profit corporation. But if you want to be an executive making big bucks, I don't think a charity is the right career route; the private sector has way higher executive compensation.

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Re: Charities - overhead vs programs

Post by tedster » 04 Apr 2014 11:35

I wrote to Centraide about this, and I received a reply that did not address the issue, but talked about the needs of the "needy". I stopped giving to Centraide. I give to Sunyouth who answered my request. I give only to those charities who respond to my question.

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Bylo Selhi
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Re: Charities - overhead vs programs

Post by Bylo Selhi » 04 Apr 2014 12:04

dlewis112 wrote:You seem to be under the impression that charities' executives collect huge salaries because they are not regulated.
I'm under the impression that they collect huge salaries because they can get away with it. That's partly because their BoDs are as ineffective on this issue as they are in the private sector and partly because the general public is generally unaware of what these people earn. Moreover because these people get paid largely out of public donations the taxpayers of Canada, both individual and corporate, subsidize these payments by way of tax credits for their donations.
They have Boards of Directors, audited financial statements, and tax oversight just like a for-profit corporation.
And how well does that work out for shareholders? Read what Warren Buffett has to say on the issue of BoD oversight of executive compensation. Keep a barf bag handy.
But if you want to be an executive making big bucks, I don't think a charity is the right career route; the private sector has way higher executive compensation.
IIRC there are more than a few charity CEOs, especially at larger charities, who earn more than the PM of Canada. And their expense account spending in some cases would be the envy of politicians like Allison Redford, Sue Fennell and Jenny Kwan never mind the Senate of Canada.
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Re: Charities - overhead vs programs

Post by izzy » 04 Apr 2014 12:33

Bylo Selhi wrote:
dlewis112 wrote:You seem to be under the impression that charities' executives collect huge salaries because they are not regulated.
I'm under the impression that they collect huge salaries because they can get away with it. That's partly because their BoDs are as ineffective on this issue as they are in the private sector and partly because the general public is generally unaware of what these people earn. Moreover because these people get paid largely out of public donations the taxpayers of Canada, both individual and corporate, subsidize these payments by way of tax credits for their donations.
Agreed! The problem is a simple one.
To put it simplistically , if there is a 50% (exaggerated for emphasis but not impossible) tax credit the donor is out of pocket only 50% of the donation , most donors likely will take that into consideration when deciding how much to give. However--
If the overhead eats up 50%+ of the charity's revenue then the only amount that goes to the cause is the amount of the tax credit or less.
In which case it would be more cost effective for the government to support the cause directly with a grant and leave the donor out of it.
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Re: Charities - overhead vs programs

Post by pmj » 04 Apr 2014 12:40

One of the better tests of a person's character is how they spend other people's money. It's unfortunate that (some) charities seem to attract more than a fair share of managerial types who fail that test.

When the BoD of a public corporation operates a business wastefully, _eventually_ the shareholders and/or the customers _may_ react and the problems _might_ get solved.

Charities typically don't have any shareholders, and the "customers" have almost no pull on the actions of the BoD - so there's even less chance for any meaningful changes or improvements.

I've decided to pass on most charities that are funded mainly from the public purse. That's partly 'cos their income:spending ratios ought to be better than charities that have to fund-raise most of their income - but they rarely are ... And if the money comes "easy" - I think there's less incentive to use those funds effectively.
Peter

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Re: Charities - overhead vs programs

Post by tedster » 04 Apr 2014 13:10

I think that the money that is donated goes mostly to the Fund raisers. These people as I understand get huge bonuses for every dollar they raise. Then the Admin takes their share. What falls off the truck goes to the ultimate recipients. I pick charities that are mostly local and small. A couple of "homes for battered women" are always grateful.

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Re: Charities - overhead vs programs

Post by ghariton » 19 Nov 2014 21:34

Part of a longer, excellent article on development aid:
The last NGO I worked for had 150 employees and a budget of more than $25 million. Employees were divided into “program staff” (the people researching, coordinating, and implementing our mission) and “overhead staff” (the fund-raising, human resources, and accounting departments helping them do it). Like most NGOs, we bragged to our donors that we had low overhead, that their dollars and euros and kroner and francs went to “the cause” and not to our rent or our heating bills. And this was, at least on the Excel sheets, true. Most of our money went to researcher and project manager salaries. The fund-raising, H.R., and accounting departments could have each fit comfortably in a minivan.

The problem is, those overhead tasks don’t disappear just because you don’t spend money on them. Someone has to monitor the accounts, find new donors, calculate taxes, organize the holiday party. Centralizing these tasks in dedicated departments, hiring specialists, getting good at them, that would have looked like bureaucracy. So instead, we spun them out to the entire staff: We assigned researchers and project managers—anthropology majors mostly, some law school dropouts—to do our H.R., accounting, fund-raising, and project evaluations.

The outcome was as chaotic as it sounds. Want to hire someone? You’ll need to write your own job ad, find job boards to post it to, and, in some cases, update the standard employment contract yourself. Want to issue a press release about the results of the study you just performed? Write it yourself and start sending it to journalists. Hopefully you know a few.
Looks as if you have to look well beyond the overhead ratio to make a meaningful choice.

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zinfit
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Re: Charities - overhead vs programs

Post by zinfit » 20 Nov 2014 13:30

I have done a lot of research on this. I will make sure when I am gone that any donations [at my funeral]be directed to the Canada Food Grains Bank. I am extremely reluctant to donate to the Canadian Cancer Society and a few other well known causes. It seems that the leading edge research is being done by universities and the pharma industry. Not sure what need the CCS is responding to . It does have a lot of provincial organizations and high priced administration. Perhaps somebody from that group could straighten me out.

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Re: Charities - overhead vs programs

Post by Taggart » 18 Nov 2017 11:37

Does anyone know of a rating source showing the efficiency of The Salvation Army when it comes to charity work?

Tried Moneysense but don't see it there.

http://www.moneysense.ca/save/financial ... ty-grades/

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Re: Charities - overhead vs programs

Post by Koogie » 18 Nov 2017 11:47

Taggart wrote:
18 Nov 2017 11:37
Does anyone know of a rating source showing the efficiency of The Salvation Army when it comes to charity work?

Tried Moneysense but don't see it there.

http://www.moneysense.ca/save/financial ... ty-grades/
https://www.charityintelligence.ca/char ... ation-army
Buy very little, sell even less.

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Re: Charities - overhead vs programs

Post by Taggart » 18 Nov 2017 12:25

Koogie wrote:
18 Nov 2017 11:47
Taggart wrote:
18 Nov 2017 11:37
Does anyone know of a rating source showing the efficiency of The Salvation Army when it comes to charity work?

Tried Moneysense but don't see it there.

http://www.moneysense.ca/save/financial ... ty-grades/
https://www.charityintelligence.ca/char ... ation-army
Thank you very much Koogie.

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Re: Charities - overhead vs programs

Post by amphitryon » 18 Nov 2017 20:58

Taggart wrote:
18 Nov 2017 11:37
Does anyone know of a rating source showing the efficiency of The Salvation Army when it comes to charity work?

Tried Moneysense but don't see it there.

http://www.moneysense.ca/save/financial ... ty-grades/
If you start typing ''Salv'' into the query line on that page, this comes up: ''Governing Council of the Salvation Army In Canada''
homo sum, humani nihil a me alienum puto

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Re: Charities - overhead vs programs

Post by Taggart » 19 Nov 2017 15:28

amphitryon wrote:
18 Nov 2017 20:58
Taggart wrote:
18 Nov 2017 11:37
Does anyone know of a rating source showing the efficiency of The Salvation Army when it comes to charity work?

Tried Moneysense but don't see it there.

http://www.moneysense.ca/save/financial ... ty-grades/
If you start typing ''Salv'' into the query line on that page, this comes up: ''Governing Council of the Salvation Army In Canada''
I did as you suggested and it worked. Thank you Amphitryon

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