This is an interesting question to add to our “Should You” series because on the surface it seems that the answer should be yes, without question. Unfortunately, though “yes” might be the preferred and possibly correct answer, the “without question” part definitely needs to be considered.

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Lately there have been a lot of lawsuits against charities like Livestrong wondering how the money being raised is being used and just how much of it is going to the charity. It seems that many charities, even long time charities, actually end up with less than 50% of the contribution going to where it was intended to go. That’s because some charities have major administrative overhead costs that kill a lot of the donation funds and leaves little to pass on.

All you need to see to give you pause is a story like the one ESPN’s Outside The Lines did on asthletes who set up charitable foundations where they investigated 115 foundations and found that many of them never gave a single dime to their charity, even if the athletes whose names were on them ponied up some starting cash. In my mind it’s an abuse of trust because people give based on the athlete and where they’re told the money’s going, and to find out it’s not going that way is disenchanting.

Maybe we need to ask the question differently if we want the answer to the initial question to be “yes”: how can we determine where to donate money for charitable causes?

The first place you start is in your own hometown. If you have something like the Red Cross in your town and you decide to write that specific location a check, they get to keep the money and use it for their own purposes. No overhead or anything else; it’s theirs and they get to use it, and that’s what we all want anyway.

The same goes for any other charitable organization in your area. I’m on the board of directors for a local organization called Arise which works with disabled people in helping them live their own lives with respect, even helping them find jobs if possible. It’s a public organization which means any money it earns has to go back into the organization. Administrative costs overall are around 15%, which means everything else goes towards those who need the services Arise provides. My city has many organizations like this, those that help certain groups of people, and giving money directly to them means you’re helping your own community.

Another time you can pretty much trust that your dollars are going to do where you expect them to are the large telethons and concerts for specific acts of kindness. The concert for Hurricane Sandy and many others have raised millions of dollars for relief, and the celebrities that help out often give large donations as well as help out, thus minimizing administrative costs. It’s better to give during those times through those phone numbers and email addresses than giving money to organizations like the national Red Cross office, who along with 89 other charities are sitting on half a billion in donations without a good reason. Those people need the help, but these organizations aren’t giving it to them. Shame on them!

Should you give money to charity? Yes. Just be smart about it, ask questions, and think about helping your own community first before thinking about helping anyone else.

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