Author Topic: Ideas for local charities  (Read 3459 times)

Spork

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Ideas for local charities
« on: June 22, 2016, 09:20:29 AM »

Wifey and I are working on writing our long-overdue wills.  We have no kids and doling out money to a whole lot of nieces/nephews seems overly cumbersome.  (Not to mention, when you hit that level you have some you are closer to than others and it just starts getting weird.   You're either giving out unequal portions based on relationship or giving out a lot of small portions and ignoring relationships.  Both of these seem odd.)

That said: we're working on pretty much dumping it all on charity with the exception of our personal possessions.  We've also come to the conclusion that giving to large charities ... the money just gets lost.   But we can give to smaller, local charities and our stash will be seen as game changing. 

We have specific charities in mind, but I'm just keeping this generic for simplification.  So far we have:
* local political organization
* a couple of very small local animal charities
* local food bank
* local low cost health clinic

Any other ideas?  We are not religious, so the obvious religious charities are not interesting to me. 

Vanguards and Lentils

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Re: Ideas for local charities
« Reply #1 on: June 22, 2016, 09:32:55 AM »
We've also come to the conclusion that giving to large charities ... the money just gets lost.   But we can give to smaller, local charities and our stash will be seen as game changing. 

We have specific charities in mind, but I'm just keeping this generic for simplification.  So far we have:
* local political organization
* a couple of very small local animal charities
* local food bank
* local low cost health clinic

Not answering your question, but just poking at your reasoning a bit... Why do you think the money given to large charities gets lost?

Here is some evidence that local charities accomplish less than international ones: http://www.givewell.org/giving101/Your-dollar-goes-further-overseas. I think there tends to be a natural bias towards the organizations we live near or can see -- even if they accomplish less per $ than others.

Systems101

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Re: Ideas for local charities
« Reply #2 on: June 22, 2016, 11:46:29 AM »
Any local education you want to support?

You may want to reach out to your local Executive Service Corps (or similar organizations) to find the promising charities they work with (many will be highlighted in their annual reports).

Your local United Way can also connect you to the organizations that loan money to growing non-profits for things like their first non-donated physical space.  This is usually a big hurdle, and one that banks don't want to get involved in (because the last thing they want is the foreclosure on a popular non-profit to be on the front page of the local newspaper... it's bad for business, so they never take the risk).  Setting up a loan insurance buffer or getting the promising charities to which they have loaned money is another source of ideas.

A few other thoughts about non-profit support:

There are many ways to measure non-profits.  Some base it on overhead and will claim overhead is "bad".  Others like what supermatthew posted are very "Effective Altruism" focused and have their own quirks.  Others are criticized for large salaries of executives, when it's possible it's still well under the market rate for the necessary skills to make a large organization effective.  While I have opinions none are strictly "right" or "wrong"... though these measures can make local or national organizations not look good, depending on the lens through which the system is viewed.  What is useful is to understand some of the major points of evaluation you can use in order to make that determination yourself.  It's no different than informing yourself about taxes or investments to retire... nothing here is necessarily a red flag, but each thing is data to consider.

Things to consider (in no particular order):
- Where is the charity in its lifecycle?  Has the charity been running for a long time, or is it newer?  Some organizations that support "capacity building" in a charity expect a charity to "scale up" within 5-7 years of launch...  if it's past that timeframe, then it's time to dig deeper.

- What is the natural scope of the non-profit?  (and is it anywhere near the necessary scope)?  If a charity is serving 1 out of 20,000 underserved students (for example), it has plenty of room to grow.  Food banks, while they need incremental funds (and I support my local food bank as well), aren't looking at 10000%+ necessary growth.   There are a massive number of TINY charities in the US.  Some are deservedly so, since they are serving smaller, localized needs.  Even a charity that is nearing the $200K/year budget for the full form 990 is getting toward the "upper middle" size of charities.  Getting across the "scale" boundary is where many non-profits fail... and part of that is that so many people want to "buy programs".  No one wants to build and be part of the overhead, but "building" is critical.  See: http://www.nonprofitfinancefund.org/sites/default/files/docs/2010/BuildingIsNotBuying.pdf

- Related to building... Is the overhead related to physical infrastructure that is strictly necessary?  An on-line mentoring non-profit should have remarkably low physical overhead.  One that needs a (fire-safe and bathroom rich) physical location to do childhood education is going to have to pay for a fairly expensive building (and allocating that out as non-overhead is not always possible - especially due to the Catch-22 of needing a building in order to be able to run programs).  All overhead is not created equal, and it may require some talking to the organization to understand how the funds are really spent.  Learn about their funding model, see: http://www.bridgespan.org/Publications-and-Tools/Funding-Strategy/Ten-Nonprofit-Funding-Models.aspx to educate yourself first... as a side note, think of what it means if a charity doesn't fit easily in these models and thus how it would benefit from additional funds or if it even deserves them (are you just extending something that will fail eventually - or if the cause is important enough whether the risk is worth it)... also think about where you will be rounding error to some existing endowment or government funding.

- What is the fundraising cost actually doing?  Recognize that any fundraising inherently is designed to pay back the costs of that fundraising.  It also may be used to then get others to give.  We naturally think of fundraising cost as not-so-great overhead, but this talk gives an opposite perspective, to at least get you thinking: https://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong

- If the non-profit will run at scale (think >$200K), who are the community supporters?  Are there local (business) leaders on the board?  If a $25K emergency arose (for which we hope there is some reserve and for which we also hope it doesn't happen) - who is there first with the rescue check?


The biggest challenge in dealing with scaling non-profits is the time sensitivity.  If you have no idea when the gift will be received by the charity, it gets tricky to really support the ones that could use the money most effectively... so community foundations could serve as a point to regrant the money once they did an analysis of need, or you could directly support the non-profits that help other non-profits get up to self-supporting scale.
« Last Edit: June 29, 2016, 07:51:03 PM by Systems101 »

tonysemail

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Re: Ideas for local charities
« Reply #3 on: June 22, 2016, 12:34:58 PM »
local charities that I would support include PTA, foster kids, and helping seniors.

Maybe setup a low-income scholarship for a K-12 private school that you like.
It doesn't take much to fund a DAF that grants 2k/year scholarships forever.

Spork

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Re: Ideas for local charities
« Reply #4 on: June 22, 2016, 12:41:40 PM »
We've also come to the conclusion that giving to large charities ... the money just gets lost.   But we can give to smaller, local charities and our stash will be seen as game changing. 

We have specific charities in mind, but I'm just keeping this generic for simplification.  So far we have:
* local political organization
* a couple of very small local animal charities
* local food bank
* local low cost health clinic

Not answering your question, but just poking at your reasoning a bit... Why do you think the money given to large charities gets lost?

Here is some evidence that local charities accomplish less than international ones: http://www.givewell.org/giving101/Your-dollar-goes-further-overseas. I think there tends to be a natural bias towards the organizations we live near or can see -- even if they accomplish less per $ than others.

Maybe "lost" isn't the right word.  Let me put it into perspective:

Big charity: gets a few hundred thousand from me some day.  Budget beforehand and afterwards are the same.  Other than someone processing the event, no one notices anything.  Business as usual

A local animal charity I work with:  It's one person doing the job of 10.  $50 makes a huge difference each month in their operation.  They get a check for a couple hundred thousand.  Their entire world changes.

Now: The change for a small charity might be good or bad.  But it is a game changer for them.  And in this case, it's something I have an emotional tie with already.  I'm looking to find more opportunities like this.  Hopefully, I have 30-40 years to find them.  And I totally expect I will have to swap them out -- as little organizations may come and go over time.

elaine amj

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Re: Ideas for local charities
« Reply #5 on: June 22, 2016, 01:06:25 PM »
I love hiking and I've sometimes thought about donating a chunk to get a trail built. No idea how much it would cost or where or anything like that. Just thought it would be a neat "memorial".

Sounds like spots like your local animal charity would be appealing for you. Something to consider with tiny charities - what would they need/use the money for? For some very small micro-organizations, a huge gift could be just too much for them to handle and upsizing could ruin what you loved about it.

Spork

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Re: Ideas for local charities
« Reply #6 on: June 22, 2016, 01:38:58 PM »
I love hiking and I've sometimes thought about donating a chunk to get a trail built. No idea how much it would cost or where or anything like that. Just thought it would be a neat "memorial".

Sounds like spots like your local animal charity would be appealing for you. Something to consider with tiny charities - what would they need/use the money for? For some very small micro-organizations, a huge gift could be just too much for them to handle and upsizing could ruin what you loved about it.

A trail sounds fun.

I do realize a big gift might be too much.  It's a gamble I'm willing to take.  The smallest charity is essentially one person.  She might or might not be there when I die...  but as of today, she is smart enough to handle any amount of cash you toss at her. 

Catbert

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Re: Ideas for local charities
« Reply #7 on: June 22, 2016, 02:12:56 PM »
Your local Friends of the Library.  When I was a child the library kept me sane.  As an adult it saves me tons of money.

mozar

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Re: Ideas for local charities
« Reply #8 on: June 22, 2016, 05:31:58 PM »
Quote
giving out a lot of small portions and ignoring relationships

I don't see a problem with this. My uncle, who I'm not close with, called me out of the blue to ask for my social security number and said I would inherit something. He didn't say what, and I'm not concerned about it. He may give more to my other cousins who know him better. I have no idea, and I'll probably never find out.

ender

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Re: Ideas for local charities
« Reply #9 on: June 22, 2016, 05:37:06 PM »
Quote
giving out a lot of small portions and ignoring relationships

I don't see a problem with this. My uncle, who I'm not close with, called me out of the blue to ask for my social security number and said I would inherit something. He didn't say what, and I'm not concerned about it. He may give more to my other cousins who know him better. I have no idea, and I'll probably never find out.

Maybe you will be inheriting identity theft problems. There's always lightning in the silver lining!

tobitonic

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Re: Ideas for local charities
« Reply #10 on: June 22, 2016, 06:15:53 PM »
I'm also in the camp of donating globally, rather than locally, especially given how much infinitely farther a strong currency can go in a poor country than in one of the absolute wealthiest on the planet (the US)...but if you're going to donate only locally, I'd suggest food pantries, women's shelters, and libraries.

Choices

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Re: Ideas for local charities
« Reply #11 on: June 22, 2016, 09:47:53 PM »
Where do your hearts sing? With kids? With animals? With seniors?

There are many good ideas mentioned above, and also consider a local school in a poorer neighborhood. Many kids can't afford to go on field trips and have to sit at school while the rest of the class has fun. Consider setting up a fund for underprivileged kids to experience these adventures and broaden their horizons.

Some schools can't afford uniforms for the sports teams or even balls/bats/etc. A few hundred dollars could make a huge difference.

TravelStache

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Re: Ideas for local charities
« Reply #12 on: June 23, 2016, 07:09:31 AM »
I have had the opportunity to work with a number of clients, both individuals and private foundations, on this very question.  Some things to think about:

1)   Research the financials of the entities you are looking to support.  Pull up their tax filings (Form 990), which is publicly available, and spend some time looking at how they spend their money.  What is their annual budget?  What percentage of their spending is going to staff, carrying costs, etc.?  Financially, how do they compare to similar organizations both locally and nationally? 

2)   Look into whether the organization is sustainable.  I have had clients who wanted to make gifts to charities they knew may not have the financial backing to be around in the long term, hoping their donation would be enough to push the charity towards sustainability.  Other clients want to make sure their funds are used in the most efficient way possible, which often leads them to larger organizations. 

3)   Are there specific purposes that you want the funds to be used for?  Should they be used to build additional infrastructure to house more animals, pay additional staff, increase the compensation of current staff or increase their marketing or fundraising budget?  Should the money be placed in their endowment where only the interest is used, or can they spend the entire bequest how they see fit?  If you want the money to be used a specific way, make sure that is included in your bequest.

4)   To the extent you are comfortable doing so and are committed to the charities, have a conversation with them now about what you are planning to do.  Iíve served on many boards where we have received significant bequests out of the blue.  In those circumstances we always wished we had a chance to work with the donors and thank them during their lifetimes.  Again, this is a personal choice and some clients donít want to make their plans public because it makes it difficult for them to change their mind.

5)   This is the tax geek in me, but if you are planning on everything passing to charity upon your deaths, why not make some gifts now (or later in life assuming you are financially comfortable doing so) and get an income tax deduction for them?  This would also give you a chance to see how the organizations responded to the gifts.

With respect to making bequests to your nieces and nephews, do whatever you want.  It is your money and the reality is you wonít be around when it gets passed out, so itís not your problem if someone feels slighted.

Spork

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Re: Ideas for local charities
« Reply #13 on: June 23, 2016, 08:06:11 AM »

5)   This is the tax geek in me, but if you are planning on everything passing to charity upon your deaths, why not make some gifts now (or later in life assuming you are financially comfortable doing so) and get an income tax deduction for them?  This would also give you a chance to see how the organizations responded to the gifts.

To some degree: we do.  I am more currently focused on dealing with the leftovers.

With respect to making bequests to your nieces and nephews, do whatever you want.  It is your money and the reality is you wonít be around when it gets passed out, so itís not your problem if someone feels slighted.

While this is true.  I am currently going through the results of this with my dad's estate.  Dad said almost the exact same thing and had very sound reasons for how he split his estate... but the turmoil afterwards is/was pretty awful.