Economics question on charities

[watchamadoodle]

Best thing to look at, if available, is a ratio of how much money per dollar goes to the cause's actual efforts.

Thanks. That is what I've been doing, except that Rhythm made a good point in his reply: the dollars spent on administration might (and should) make the charity's efforts more efficient. Similarly, the dollars spent on advertising should leverage your dollar into more future donor dollars.

Of course it's possible for charities to become public works programs for charity workers.

I was wondering about something like a mutual fund for charities. This would allow the fund manager to examine the operations of each charity in detail on the donors' behalf. The only organization that comes to mind is the United Way, but I see they have had some scandals.

William Aramony, CEO of the national organization for over 20 years, retired in 1992 amid allegations of fraud and financial mismanagement, of which he was subsequently convicted. He was sentenced to 7 years in prison and fined $300,000.

Ralph Dickerson Jr., a former CEO of United Way of New York City, was found to have used $227,000 in United Way funds for personal expenses during 2002 and 2003. He later agreed to reimburse the organization.

Oral Suer, CEO of the Washington, D.C. chapter, was convicted of misuse of donations in 2004. He pleaded guilty to theft of almost $500,000 and is in prison.

http://en.wikipedia.org/wiki/United_Way_of_America

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I don't know how feasible due diligence in assessing the quality of the grantees would be.

An example:

I donate $1000 to cancer charity A and they fund a research grant at Harvard Medical College

-or-

I donate $1000 to cancer charity B and they fund a research grant on the power of prayer on cancer at Liberty University



You can understand my concern, besides high over head and excessive advertising, a charity could just piss money down a rat hole, and we wouldn't necessarily know.

Also, a poorly supervised/managed charity might have an employee embezzle $300,000 to fund a perpetually losing gambling habit (has happened around here more than once, BTW) and that is fucking annoying too.

That's how I feel too. I was also annoyed to discover that these charities make it very easy to set up a monthly donation through the internet, but they make it extremely difficult to reduce or discontinue that donation. Instead of point and click through the internet, it requires signed forms, phone calls, faxes, mail, etc. That's obnoxious IMO.