I have a DAF and give to both universities as well as some local charities. Some of those are organizations where I've been directly involved; others are ones that help support the community in general. Total giving is ~5% of salary.
Charity expense ratios would likely make people sick if they actually cared enough to look.
- Charities have little control over the definition of "overhead" - some with facilities that are idle during certain times (e.g. students in school) show high overhead but are overfull during other times. Some charities are effectively virtual - needing no facilities - where others are running classes or other things that demand correctly-zoned (usually more expensive than average) facilities. This is highly relevant to whether the overhead is wasteful or not...
- Volunteer hours produce no value to the charity in measuring overhead, even though they are
worth $25.43People have been trained to view overhead as a problem - and there are places where it IS a problem - but the broad brush treatment is just as bad as any other stereotype. I've
commented on overhead before in another thread that had a similar topic to this one (OP may want to read the whole thread)
As an example (numbers are rounded):
Charity 1: 15% administrative + fundraising (mix=50/50). 80K volunteer hours, $200K CEO salary, $2M payroll, 4* on Charity Navigator, 1 volunteer hour/$8 of overhead
Charity 2: 25% administrative + fundraising (mix=95/5). 25K volunteer hours, $50K/year payroll total, too small for Charity Navigator, 1 volunteer hour/$1.25 of overhead
Examples like that make me doubt as to how useful the overhead measure really is...
The problem - having been "on the inside" (as a board member of Charity #2 above) - is that I know how bad the measurement really is. "Effective" is rather relative (though it's a great marketing word). How is giving to someone's definition of "effective" charities really any better than putting funds in an active management fund that invests in "value companies"?
I've become disenchanted with our local charities modes and methods, as mentioned above it seems like most of the donations go toward administration now days.
What I CAN tell is that engaging with an organization to understand why it's spending what it is spending is a useful endeavor. (Of course, this is only fruitful if you are donating significant sums that make it worth the time of the charity to talk to you in detail)
The downside to donating to charity is all the junk it creates... I get requests from other organizations now too, and everybody seems to send a request ~4-6 times a year whether or not I’ve given to them before.
Ask yourself what you would want to achieve... housing, education, animal welfare, feeding the hungry, etc. Then go looking for charities in your area that do that. Google is your friend, as any at scale will have SOME web presence. THEN, ask about their donor privacy policy. If they don't have one, be specific that you won't donate because of it. They sell their lists to other charities to make money (or trade them to get prospective donors), so knowing there is a lost revenue stream is relevant.
[W]ith a donor advised fund, you ... can make all your charitable donation disbursements anonymous (no need to get an individual donation receipt from each), and so you’ll never get on mailing lists. It’s the best way to donate, for sure!
^ This. I've given $500 to my local food bank per year for close to a decade, but none of them, in any of the cities I've lived in, know who I am. The only non-anonymous gifts I give are to places I've graduated from or the non-profit where I was a board member... places where there is clearly value to not being anonymous.
