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Debunking an E-mail on Charities

CharityGiven the time of year and knowing that many people will be donating to charities around this time, I figured this was a good time to address this. A friend of mine got an e-mail supposedly listing charities that don't do a good job of spending donations, and other charities that make your dollars go farther. He knew I'd want to see it, so he forwarded it to me. He was right - the e-mail was one that I couldn't pass up.

This e-mail was actually already covered pretty well by Snopes:
Charitable Compensation

And of course, the Mickelson's covered the e-mail pretty well, but I still wanted to add a bit more.

Needless to say, most of the information in the e-mail was wrong or misleading. But what if it wasn't? Several of the supposed facts in this e-mail are about CEO salaries, not overall spending of these organizations. And while a part of us wants everybody involved in a charity to be charitable themselves, the real question is, what's best for the charity? Look at it this way. The Red Cross is a big organization with a big budget. They need someone at the top who knows what they're doing. Now maybe, they could get someone charitable enough to be CEO for a low salary, but what would be the qualifications of that person? Or, they could decide to spend some money and hire the best CEO they can get - maybe not a particularly charitable person, but well qualified. Which would be better for the organization, and which would help them be more efficient overall?

In my mind, the measure of efficiency of a charity should not be how much the top person gets paid, but how much of their money is going into actual charity, not overhead. Luckily, a few organizations have already done the hard work of researching the finances of several charities to come up with this information. The chart below summarizes a few charities - the top 10 by revenue, the other charities listed in the e-mail, and a few that I included just out of personal interest. All of the data for the table below came from Forbes magazine's The 200 Largest U.S. Charities. Clicking on any of the charity names will take you to the Forbes entry for that organization.

Organization Total Revenue, millions Total Expenses, millions Program / Charitable Expenses, millions % Spending on Charitable Expenses
 
Top 10 Charities by Revenue
Lutheran Services in America $18,310 $17,520 $15,050 85.9%
Mayo Clinic $7,970 $7,430 $7,110 95.7%
YMCA $5,920 $5,670 $4,790 84.5%
Catholic Charities USA $4,670 $4,220 $3,710 87.9%
United Way $4,230 $4,230 $3,600 85.1%
Goodwill Industries International $4,040 $3,820 $3,380 88.5%
Salvation Army $3,750 $3,240 $2,660 82.1%
The Arc of the United States $3,730 $3,610 $3,240 89.8%
Cleveland Clinic Foundation $3,730 $3,450 $3,110 90.1%
American National Red Cross $3,710 $3,350 $3,090 92.2%
 
Other Charities from E-mail
March of Dimes $218 $206 $155 75.2%
United States Fund for UNICEF $456 $447 $405 90.6%
The Veterans of Foreign Wars $87 $85 $54 63.5%
The Disabled American Veterans $125 $126 $87 69.0%
 
Select Other Charities
American Cancer Society $956 $951 $681 71.6%
American Heart Association $600 $580 $437 75.3%
Doctors Without Borders $275 $204 $181 88.7%
Susan G. Komen for the Cure $353 $337 $279 82.8%
 
Data Not Readily Available
The American Legion -- -- -- --
The Military Order of Purple Hearts -- -- -- --
The Vietnam Veterans Association -- -- -- --

Here's another way of looking at the data. I took the last column from the table above, % Spending on Charitable Expenses, and plotted it for the included charities, sorted from highest percentage to lowest.

Charity Spending on Charitable Expenses

I'll add that there are other considerations. For example, in a previous entry of mine, The Salvation Army - To Give, or Not to Give?, I discussed how the Salvation Army spends its money. As it turns out, they spend money on causes that I don't agree with, so I've decided to donate to other organizations that perform similar functions.

What to do with all this information is up to you. It depends on how much overhead you think is an acceptable amount, and whether or not there are any other organizations dedicated to performing the same mission as those charities.


More Info (including links already given):


For anyone interested, the e-mail that prompted this entry is available below the fold.

Image Source: ATR International


Think about these before you donate. As you open your pockets to do a good thing and make yourself feel good, please keep these facts in mind:

The American Red Cross
President and CEO Marsha J. Evans salary for the year was $651,957 plus expenses

MARCH OF DIMES
It is called the March of Dimes because only a dime for every 1 dollar is given to the needy.

The United Way
President Brian Gallagher receives a $375,000 base salary along with numerous expense benefits.

UNICEF
CEO Caryl M. Stern receives $1,200,000 per year (100k per month) plus all expenses including a ROLLS ROYCE. Less than 5 cents of your donated dollar goes to the cause.

GOODWILL
CEO and owner Mark Curran profits $2.3 million a year.
Goodwill is a very catchy name for his business. You donate to his business and then he sells the items for PROFIT. He pays nothing for his products and pays his workers minimum wage! Nice Guy.
$0.00 goes to help anyone!!! Stop giving to this man.
Instead give it to SALVATION ARMY.

The Salvation Army
Commissioner Todd Bassett receives a small salary of only $13,000 per year (plus housing) for managing this $2 billion dollar organization. 96 percent of donated dollars go to the cause.

The American Legion
National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

The Veterans of Foreign Wars
National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

The Disabled American Veterans
National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

The Military Order of Purple Hearts
National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

The Vietnam Veterans Association
National Commander receives a $0.00 zero salary. Your donations go to help Veterans and their families and youth!

Please share this with everyone you can.
Thank you.

Comments

nice blog, i just have a few suggestion first of. I don't think your website is that credible, and you seem like a religion and avian nut.

Those aren't suggestions.

whats up home dog, i somehow stumbled upon you again, and i want to say something. when you die potatoes will take over your body and rule the world, and your blog will be destroyed and everybody will celebrate.

Who wrote the two comments above? An overpaid CEO??

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