The Future of Charitable Giving

August 29, 2008

In today’s society, the problems of accountability and trust within a nonprofit sector are at all time low. Most recently, the American Red Cross was taken sharply to task over its plans (later dropped) to use some Sept. 11 funds for other purposes, while the Nature Conservancy was criticized for failing to disclose loans to its executives. High salaries awarded to the heads of some nonprofits have also drawn fire, as compensation for the chief executives of the nations biggest charities grew at a rate nearly double that of inflation last year.

It seems that donations are going towards overhead and not to the individuals who truly need the help. The potential donor must find the organization which has the approach to pertinent issues which strikes a personal chord. Donations to smaller charities have a larger impact due its overall lower administrative expenses.

When it comes to charitable giving, we often let our hearts rule our heads. As a result, we frequently wind up having second thoughts about our giving: Did that donation really end up where its needed most? Will this charity really use my money wisely? A survey conducted earlier this year by the Brookings Institution confirms the publics doubts: Nearly one out of three respondents expressed little or no confidence in charitable groups, and only 11% said they believe that charities do a very good job of spending their money wisely.

The more control you can exercise over your donation, the more satisfying your giving is likely to feel too. I implore you all to explore alternative ways of giving to ensure that your donations is being used in a way you feel comfortable.

References

Wang, Penelope. (2004) Making Your Generosity Pay. Money (33) 12

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