We get it. You don’t want your donation to be wasted. You also want to make sure that as much of your donation gets to the cause as possible.
But as tempting as it is, we plead with you, don’t focus on the charity’s administration and overhead costs! It is a poor indicator of the impact of your donation.
Have you ever bought a pair of jeans based on the CEO’s salary? Have you ever chosen a restaurant by reviewing the restaurant’s overhead costs?
I presume not. Why? Your buy things based on the on the quality of the brand, product and the price. Administration and overhead costs tell you nothing about an organisation and the quality and price of the goods and services it delivers.
Charities are no different. Charities exist to solve social problems. A high performing charity is one that is able to identify a problem and deliver a cost-effective solution. Overhead and administration costs reveal nothing about their ability to do this.
What should you look at instead? Find charities that address clear problems with proven solutions. Fund only those charities that commit to reporting on a project’s outcomes. You can be sure your money isn’t wasted if the charity can demonstrate it’s impact.
Remember, charities are not designed to make money. They are designed to solve social problems. Evaluate them on the basis of their ability to do this, and you will be a much better donor.