Lifestyle

Charity that doesn’t give much

Dec 10, 2014

Many of us here donate to charity, particularly at Christmastime, keenly giving back to those who need it more than we do. But sadly, charity isn’t always what it looks like, and today it is timely to talk about the difference between good and bad charities and how we can tell the difference, or even if we can tell the difference.

We’re a generous lot here in Australia, according to ATO statistics, about 4.6 million Australians donate to charity every year. But have you ever stopped to consider where your money might be going?

When we donate, we all think altruistically that the funds are going to get to the end-goal – the people and organisations that really need it. We know in our logical centre that some of the money will be poured into administration and management costs… but how much of our money reaches the end goal? We take a look. And how would it make you feel if you found out only a portion was getting to the right people in some charities?

According to one news report, in the USA, The Kanye West Foundation, founded to support teen dropouts, spent $553,826 in 2009 on salaries, travel, and other administrative expenses. Only $573 actually went to charity. The charity closed mysteriously in 2011.

In Australia, there has been a Charity Watchdog in place for some time in the for of the Australian Charities and Not For Profits Commission, but its powers might make you cringe when you hear what these rather corporatised vehicles can do with funds, and how little of it gets to some of the pledged causes.

Website SheKnows did some digging… and you might be surprised by what they found.

World Vision

According to a recent CHOICE report, in 2010 World Vision delivered $271.6 million to its causes around the world, and spent around $37.7 million on fundraising. This is roughly in line with the charity’s publicly-disclosed financial breakdown, which reveals that they spend around 78.8 per cent of funds on direct charity work, 11.5 per cent on fundraising, and 9.7 per cent on administration.

Total funds directed to core charitable work: 78.8 per cent

Surf Life Saving

The Daily Telegraph did some sleuthing and found that Surf Life Saving Foundation Incorporated is one of the worst offenders when it comes to frittering away donations. It spent a whopping 62 per cent of its $23.8 million gross fundraising revenue on administration costs, leaving just 38 per cent of donations to go towards the costs of keeping our beaches safe.

Total funds directed to core charitable work: 38 per cent

RSPCA

Animal welfare charity RSPCA is comprised of a national organisation, with individual hubs in each state or territory. So, depending on where you live, you may be donating to head office or one of the state-wide affiliates. The specifics of how your donations are spent may change slightly as a result, but we can look at the NSW breakdown as a guide: Here, funds are sliced with 9 per cent spent on admin, 18 per cent spent on marketing and fundraising, and 73 per cent on direct animal welfare work.

Total funds directed to core charitable work:73 per cent

The Daily Telegraph provided this research last year:

In contrast some of the less scrutinised charitable vehicles out there have plenty of good intent, but perhaps too many overheads to allow the funds to reach their community. And I suspect if there were a database like MySchools where we could compare every Australian charity in terms of the CEO’s salary as a percentage of total turnover it might make us all sit up and reconsider.

In one report, a charitable trust which donates to Melbourne’s Royal Children’s Hospital has lost tens of millions of dollars while still paying its corporate trustee millions in fees, according to a charities lobby group.

The US Government has stepped into what seems to be some considerable rorting of the charitable system in their country, and named and shamed the 50 worst charities in the USA last year.

Do you donate to charity? Are you skeptical of where your money is going?