How to Donate with Maximum Impact?
Many people have the same concern when it comes to donation: charity administration costs eating into the donation which reduces the impact to the ultimate beneficiaries.
Although the administration expenses should not be the only measurement of efficiency of a charity, it definitely would be a concern for the donor as we want to know that our money is going to the right person and for the cause that we intend to contribute.
Where is our money going?
To keep the charitable organization running, some administrative expenses, which may include staff salaries, office supplies, production of reports, costs of raising funds or charitable activities, etc, seem unavoidable.
Administration costs should not be the excuse or reason for not donating. However, if the majority of the donation pays for the administration inefficiency and overhead costs of any charity organization, it directly reduces the effect of the donation and even goes against the intention of the donor.
Most people, given the choice, would prefer to donate to charity with a lower spend on administration because it denotes efficiency.
The benchmark
The ratio of the administrative costs is one of the most important benchmarks to evaluate the health of a charitable organization.
Generally, any costs under 15% are considered to be desirable. Food banks' charity would have an even lower overhead of a cap of costs around 3%.
How to find efficient charities to donate to?
Given the benchmark, we can easily do some online research to find charities with a relatively lower administration ratio. There are several charity watchdog websites (such as charity watch, give well, etc.) which serve as a good starting point to look for efficient charity in your cause niche.
Here are a few as examples of charity with low overheads:
American red cross keeps the administrative expenses at less than 5% and spend about 91 cents of every dollar donated.
Doctors without borders spend about 89% of every dollar donated to their programs which means an administrative ratio of around 11%.
Practical ways to donate with maximum impact
If you still have a stigma about donating to charity organization because of stories about their inefficiency and non-transparency of your donation, there are still more ways that you can make an impact with your money.
1. Religion groups
If you have any religious beliefs, direct donation to your church or temple is one of the best ways to contribute. Subject to your local laws, these religious groups generally are not subject to the same rigidity of regulatory supervision and therefore have much lower administrative burden.
2. Scholarships
Contacting your old schools or any schools that you would like to support and tell them that you would like to establish a scholarship to encourage the students. Most schools would be happy to discuss more with you.
You may set the criteria for the scholarships, for instance, it maybe for academic performance, sports performance, improvement in behavior or social contribution, etc.
And this is a direct way of ensuring your money goes directly to the beneficiary (students) without any deduction in-between.
You don’t need a huge sum to do that. I have tried this with a couple of thousand dollars a year. You can start small with this scholarship.
And remember when you were a student, how happy would you be if you can have some couple hundred dollars to motivate you to keep going in your academic or other pursuits. This could be really impactful and motivating for any child.
3. DIY markets
Some single parents, elderly, incarcerated people or disabled persons have a hard time finding jobs but they do not want to rely solely on government support. So they may rely on their handcrafted products to earn some money to support their living.
If you would like to support them, simply help them with any resources you can provide or a direct donation to keep their venture going would mean a lot to them.
4. Hospitals and elderly homes
Donating fruits or clothes to hospital patients or elderly is one of the direct impacts you can easily make. Of course, you will have to contact the hospitals or elderly homes in advance to make sure that your arrangement would be acceptable to them as well. Yet, most of the time, they would welcome such helpful donations and it can bring love and warmth to these cold places.
Sometimes, spending time accompanying and speaking with single elderly or end of life patients means more to them then giving money.
So, don’t underestimate your power even when you have little to give or you have a concern about the administrative costs of the charitable organizations.
Be creative when it comes to donating with real impact.
