RE: Economics question on charities
January 23, 2015 at 5:16 pm
(This post was last modified: January 23, 2015 at 5:19 pm by watchamadoodle.)
(January 23, 2015 at 4:20 pm)Rhythm Wrote: Put all of that out of your head. A charity might spend what you consider to be an exorbitant amount on administration because those people make each charitable dollar go farther. Talented people cost more money.
If, for example, I have $100 dollars
-Org A spends 20 on the cause, 80 on admin, but every dollar buys 2 cookies....you have 40 cookies.
-Org B spend 80 on the cause, 20 on admin, but every dollar buys a half a cookie...you have 40 cookies.
Which org would you feel more comfortable with donating to...or is it a wash? Keep in mind that the proportion of admin to cause -is- ad copy. Don't buy it wholesale. Remember, -you're- the one giving to a charity, these people do it for a living.
(goes the other way as well, they might spend more on talent even if they get precisely the same or even less out of -each- dollar because that talents draws in more dollars overall)
That's an excellent point about measuring in cookies instead of dollars spent on cookies.
This makes me wonder if a better form of charity would be to simply transfer money to the needy people and let them buy what they need from wherever they want? I know there are problems with this approach. The needy people might not share the donor's values, so the money might be spent on things that the donor considers foolish or wasteful.
BTW How could a person know how many cookies are being delivered by a charity? The accounting and auditing is all measured in dollars.
(January 23, 2015 at 4:52 pm)Cato Wrote: There's so much more to consider than the raw overhead expense, although I question charities that can't keep it below around 30%.
The following is a link to Charity Navigator. Have a look under the methodology section. There are some FAQs on the left side that will guide you to detailed information on what they consider and how they rate charitable organizations. I find the site very useful when trying to differentiate between comparable organizations.
http://www.charitynavigator.org/
Thanks, I've seen that site, but I've never read the FAQ you mentioned.
(January 23, 2015 at 2:27 pm)Surgenator Wrote: The administration size depends on how much a the group does. For example, working in multiple countries requires more admistration to deal with the regions laws and logistics.
I always was suspecious of charities that do lots of advertising. Some in necessarily to spread the word. So more advertising gives more money to the charity work per person/task. But there is a limit where the adverticing starts removing the money per person/task.
Thanks. I hadn't considered the international complications.
