Charities - overhead vs programs

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Re: Charities - overhead vs programs

Post by kcowan » 05 Jan 2010 13:54

Taggart wrote:Which charities spend the most on administration?

MoneySense ranks Canada’s 40 largest charities by what they spend on administrative expenses.

By Sarah Efron | From MoneySense Magazine, Dec/Jan 2010
My gut feel is that anything over 10% deserves an opportunity to explain.
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Re: Charities - overhead vs programs

Post by Bylo Selhi » 05 Jan 2010 17:05

What I find particularly telling (and damning) is: Heart And Stroke Foundation Of Ontario raises $135M of which 50% goes to fund raising while Heart And Stroke Foundation of Canada raises $33M of which only 5% goes to fund raising. So the former spends 2x as much on fund raising alone as the latter spends in total. I wonder how many people know, let alone appreciate, the difference in fund raising practices between the two organizations.

And if I'm not mistaken, the "charities" that spend by far the most on fund raising, Heart And Stroke Foundation of Canada, Canadian Cancer Society Ontario Division, Canadian Breast Cancer Foundation, Canadian Cancer Society BC/Yukon Division and Multiple Sclerosis Society of Canada all run lotteries. I'm not sure who deserves more condemnation, the con artists who run these "charities" or the idiots who contribute to them.

Added: Do the "charities" who spend ~50% on fund raising issue tax receipts for the full amount of the "contribution"? If so CRA should charge them with tax fraud because the taxpayers of Canada end up subsidizing that fund raising through generous tax credits.
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Re: Charities - overhead vs programs

Post by marcharry » 05 Jan 2010 17:57

Most of you would really like this site
http://www.charityintelligence.ca/

Charity Intelligence uses volunteer financial analysts to review charities INCLUDING accountablity - not just overhead ratios.
That's the way to do it IMHO.

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Re: Charities - overhead vs programs

Post by blonde » 05 Jan 2010 17:59

I'm not sure who deserves more condemnation, the con artists who run these "charities" or the idiots who contribute to them.
Hmmm!!!...It mite be different this time...

OTOH...Study the System...

Do not be surprised to learn that the WIIIFM-Factor is MEGA for the 'con artists'.

Everybody's in Sales.

Needless to say, the 'idiots' LUV-IT...

How can that be a bad thing?

That is 'how' the worm turns.
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WishingWealth
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Re: Charities - overhead vs programs

Post by WishingWealth » 05 Jan 2010 20:26

I remember reading (probably in one of the links upthread) that another issue can be that the overhead of a charity may be low but that the overhead of the charities that it subsidizes may be awful.
Hypothetical example: Centraide may be giving some money to a lot of small organizations and some of them could be administered by professional blonde10%ers.

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Re: Charities - overhead vs programs

Post by pmj » 05 Jan 2010 20:47

I've posted on this a couple of times: viewtopic.php?p=338863#p338863

United Way Ottawa is less than 60% efficient because of the compounding effect of its overhead and the overheads of the charities that most of its money goes to - I wonder whether the author of the MoneySense article picked up on this?

Another variable is the amount of money that a charity receives from government - for some charities government is the major source of funding. ISTM that it's probably easier (ie cheaper) to get generous-sized grants than it is to drum up support by your own hard work?
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Re: Charities - overhead vs programs

Post by Bylo Selhi » 10 May 2010 15:45

How to choose a charity and in particular this chart:
634761a.jpg
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Re: Charities - overhead vs programs

Post by Bylo Selhi » 22 Sep 2010 15:16

Charities paid $762M to private fundraisers
Canadian registered charities paid $762 million to third-party fundraisers between 2004 and 2008, all of it deducted from donations and often dwarfing guidelines set out by the Canada Revenue Agency, a CBC investigation has learned.

In more than 200 cases, charities paid more than half the money they received from donors to external fundraisers, according to documents obtained from the CRA, which regulates Canadian charities...

Ten years ago, the fundraising sector was worth $800 million, said Bahen, the managing director of Charity Intelligence Canada, an Ontario-based non-profit that analyzes charities.

Today, it's a $2.8-billion business and growing, with an average 35 cents of every dollar donated to charity going to pay fundraising costs, she said. For some Canadian charities, the amount is substantially higher.
N.B. that the percentage of your donation that goes to fundraising is subject to the same tax credits as the percentage of your money that goes to good works. So as a result several $100M of the $762M that goes to external fundraisers is foregone income tax that CRA has to raise from you and me by other means, i.e. CRA (that's you and me) are heavily subsidizing the for-profit third-party fundraising industry as well as the charities for whom they work.
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Re: Charities - overhead vs programs

Post by chiaroscuro » 22 Sep 2010 15:43

marcharry wrote:Most of you would really like this site
http://www.charityintelligence.ca/

Charity Intelligence uses volunteer financial analysts to review charities INCLUDING accountablity - not just overhead ratios.
That's the way to do it IMHO.
Thanks for the link.
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Re: Charities - overhead vs programs

Post by Nemo2 » 01 Oct 2010 13:04

Further to Bylo's earlier post:

Bono
British newspapers reported last week that in 2008, an AIDS charity championed by rock god Bono of the band U2 took in the equivalent of $15.5 million from wealthy donors, but distributed only $68,900 to three charities. Executives and employee salaries topped $6.8 million at an average of more than $68,000.

The ONE charity’s executives justified the expenses by saying the money went toward raising global awareness of AIDS and poverty in the developing world. It certainly went a long way toward easing poverty among the charity’s jet-setting executives.
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Re: Charities - overhead vs programs

Post by izzy » 01 Oct 2010 18:08

Nemo2 wrote:Further to Bylo's earlier post:

Bono
British newspapers reported last week that in 2008, an AIDS charity championed by rock god Bono of the band U2 took in the equivalent of $15.5 million from wealthy donors, but distributed only $68,900 to three charities. Executives and employee salaries topped $6.8 million at an average of more than $68,000.

The ONE charity’s executives justified the expenses by saying the money went toward raising global awareness of AIDS and poverty in the developing world. It certainly went a long way toward easing poverty among the charity’s jet-setting executives.



Essentially means that if the government had actually completely funded the charity from taxation without involving donors at all, both they and the donors would have saved a lot of money. :shock:
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Re: Charities - overhead vs programs

Post by Nemo2 » 01 Oct 2010 18:35

izzy wrote: Essentially means that if the government had actually completely funded the charity from taxation without involving donors at all, both they and the donors would have saved a lot of money. :shock:
But...but...won't somebody please think of the poor sanctimonious celebrities.....
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Re: Charities - overhead vs programs

Post by brucecohen » 02 Oct 2010 08:25

I'm not sure that ONE is a charity at all. Its website says it's an advocacy organization, not a funding organization and that it accepts no donations from the general public. There's no indication of whether donations to them are tax-deductible. ONE appears to fall well below the minimum payout ratios set by Canada, the US and I'm sure other countries for tax-deductible status. One donor is The Bill and Melinda Gates Foundation which does enjoy charitable status, but I suspect the money they give to ONE does not count toward that quota. The Gates Foundation was apparently one of ONE's creators.

Basically, ONE seems to be a lobbying outfit much like Americans for Prosperity, the astroturf organization created by the Koch brothers to fund the Tea Party.

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Re: Charities - overhead vs programs

Post by SoninlawofGus » 13 Oct 2010 12:43

marcharry wrote:Most of you would really like this site
http://www.charityintelligence.ca/
I'm a bit suspicious of this site. It recommends mainly smaller, local charities, and not a single charity doing international work (at least not one I could find). Compare this site to the US site Givewell, which does a rigorous screening and includes charities doing international work. To me, Givewell is the more useful site, albeit American.

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Re: Charities - overhead vs programs

Post by UUi11 » 18 Feb 2011 12:54

SoninlawofGus wrote:
marcharry wrote:Most of you would really like this site
http://www.charityintelligence.ca/
I'm a bit suspicious of this site. It recommends mainly smaller, local charities, and not a single charity doing international work (at least not one I could find). Compare this site to the US site Givewell, which does a rigorous screening and includes charities doing international work. To me, Givewell is the more useful site, albeit American.
How does givewell compare to charitynavigator.org?

Here's a forbes guide to about 10 different sites http://www.forbes.com/bow/b2c/category.jhtml?id=74 all US based

Does anyone have any more information on charityintelligence? Is there anything wrong with them other than their focus on local?
We want a good Canadian site, not just the US sites.

The moneysense chart is really good, but doesn't have reports on the charities AFAIK

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Re: Charities - overhead vs programs

Post by Taggart » 06 Jul 2011 09:16

I first got wind of this on the radio news this morning.

Cancer Society spends more on fundraising than research

By Erica Johnson, CBC News
Posted: Jul 6, 2011 5:00 AM ET

"CBC's Marketplace analyzed the Canadian Cancer Society’s financial reports dating back a dozen years. It discovered that each year, as the society raised more dollars, the proportion of money it spent on research dropped dramatically — from 40.3 per cent in 2000 to under 22 per cent in 2011.

The amount of money spent on research has increased slightly over the years, but as a portion of the Cancer Society’s growing budget, it's almost been cut in half."

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Re: Charities - overhead vs programs

Post by deaddog » 06 Jul 2011 10:48

Taggart wrote:
"CBC's Marketplace analyzed the Canadian Cancer Society’s financial reports dating back a dozen years. It discovered that each year, as the society raised more dollars, the proportion of money it spent on research dropped dramatically — from 40.3 per cent in 2000 to under 22 per cent in 2011.

The amount of money spent on research has increased slightly over the years, but as a portion of the Cancer Society’s growing budget, it's almost been cut in half."
That’s probably because of the switch from door to door volunteer canvassing to telemarketing. In our area it’s getting harder and harder to find people willing to volunteer their time.
Bottom line is that more money is collected by telemarketers. The charities have to pay to have the money raised but the dollars to the charities are more than if they didn’t hire someone to raise money.
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Re: Charities - overhead vs programs

Post by flywaysuzy » 06 Jul 2011 11:10

Maybe something to do with the limited amount of research facilities available in Canada, cutbacks at Universities and a fixed number of researchers? I know that just north of here, they're putting up a huge facility for out of town cancer patients to stay in while receiving treatment. Not research but definately worthwhile spending...Much of the money raised locally has been sent up to help with construction of this project.

Mind you this is the BC cancer agency. Maybe it is different in another province? Here a lot of the emphasis is on preventative measures, such as making screening for cervical and breast cancer more accessible around the province. They do genetic couselling for familial cancers as well as lots of help for people who need it and want it. They also fund clinical trials of drugs and treatments available elsewhere but not approved yet here.

I think it's the Terry Fox foundation that has more of a research oriented philosophy. It is global, so they can invest where the research facilities are, in addition to supporting home grown ones. As governments keep cutting back on education and research these organizations have become more important to new discoveries.
suzy

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Re: Charities - overhead vs programs

Post by Taggart » 06 Jul 2011 11:15

deaddog wrote:
Taggart wrote:
"CBC's Marketplace analyzed the Canadian Cancer Society’s financial reports dating back a dozen years. It discovered that each year, as the society raised more dollars, the proportion of money it spent on research dropped dramatically — from 40.3 per cent in 2000 to under 22 per cent in 2011.

The amount of money spent on research has increased slightly over the years, but as a portion of the Cancer Society’s growing budget, it's almost been cut in half."
That’s probably because of the switch from door to door volunteer canvassing to telemarketing. In our area it’s getting harder and harder to find people willing to volunteer their time.
Bottom line is that more money is collected by telemarketers. The charities have to pay to have the money raised but the dollars to the charities are more than if they didn’t hire someone to raise money.
So I'm supposed to give money to a charity where only 22 cents of every dollar I donate gets channeled to research? I don't think so.

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Re: Charities - overhead vs programs

Post by deaddog » 06 Jul 2011 12:26

Taggart wrote:
So I'm supposed to give money to a charity where only 22 cents of every dollar I donate gets channeled to research? I don't think so.
That’s the dilemma the charities are up against. How to raise the most money.
I always give generously to the door to door group as I know that the dollars usually end up where they should go. There is also the problem of admin costs which are quite high for some charities.

I get pissed at the ones that send me return address labels. I would rather have them spend the dollars that it costs to print and mail the labels on the charities cause.

I guess one has to decide where their charitable dollars go. But then knowing that most of it is wasted on fund raising and admin costs we have a good excuse to not donate.

Now a worthwhile charity I would recommend is the “Send the Dog to Vegas Fund” Guaranteed that 100% of all donations will be spent on the main purpose of this charity.
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Re: Charities - overhead vs programs

Post by tedster » 06 Jul 2011 13:37

I believe that most research institutes that raise funds have full time staffs to do this. These people get big bucks related to their success. All this comes out of our donations.

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Re: Charities - overhead vs programs

Post by izzy » 06 Jul 2011 14:17

Think about it, only 22% actually goes to the cause , the tax credit is often greater than that.In which case we would be far better off if the charity was disbanded and the cause supported directly by government grants!
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Re: Charities - overhead vs programs

Post by twa2w » 06 Jul 2011 16:16

So if a charity runs a lottery as some of them do, does the money in prizes count as an expense?

IOW if they raise 2,000,000 selling tickets but the prize is 1,000,000 does that mean that 50% of funds were allocated to 'cost of fundraising". It seems a lot of charities are running lotteries. (or selling cookies or candies which all have a cost of good sold).
Also many are hiring professional fund raisers which would raise their cost - but may raise the absolute value of $ to research

It would make sense to me to look at the absolute numbers.

If they raised 4 million and spent 100,000 on cost of doing so then 3.6 million went to research.
If 10 years later they raised 40 million but it cost them 20,million then I think it was a better deal as far more went to research even on an inflation adj basis.

If they are not raising much more money and their costs increased then that is a different story.

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Re: Charities - overhead vs programs

Post by AltaRed » 06 Jul 2011 21:21

I loathe supporting 'national' charities with their huge fundraising costs. Things like Heart & Stroke and Canadian Cancer Society are not on my list. I'd rather support my local Humane Society, STARS ambulance, or Cancer Centre where I know virtually all bucks go to the front line.
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Re: Charities - overhead vs programs

Post by Bylo Selhi » 06 Jul 2011 21:34

twa2w wrote:So if a charity runs a lottery as some of them do...
...then that's my first clue that they're highly inefficient and the only people who win consistently are their fundraisers. That's why I simply don't contribute to them.
AltaRed wrote:I loathe supporting 'national' charities with their huge fundraising costs. Things like Heart & Stroke and Canadian Cancer Society are not on my list. I'd rather support my local Humane Society, STARS ambulance, or Cancer Centre where I know virtually all bucks go to the front line.
There are some national charities who spend peanuts on fundraising so that they can spend the vast majority of what they get on good works, just as there are local charities who squander their supporters' donations on fundraising. You have to do due diligence in both cases, but it's usually easier to confirm that the locals are actually doing what they say they're doing.
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