Some practical tips on donating to charity
Sometimes we donate to charity more or less on a whim, whilst other times justify a more considered approach. Either way, the following tips may help you make a more fulfilling and impactful decision.
Picking a particular charity
Why are you donating?
Understanding why you are donating will usually determine how much you want to donate, how regularly, and how selective you’re able to be about the charity.
Typical reasons that people donate to charity are: because they are passionate about the issue, they want to show solidarity with those affected (especially loved ones), they want to support or recognise a friend’s fundraising efforts, respond to a tragic event, or more simply because they’ve been asked nicely, are feeling flush, or it’s been a while.
It is important to remember that some people and organisations donate to charity in order to influence or resist change for their own benefit, and to recognise whether this is your motivation.
What kind of relationship do you want with the charity?
Do you want a completely hands-off relationship, where you make a one-off donation and let them get on with their job? Would you like to donate to a charity that gives you benefits such as a magazine, contact with a beneficiary, or discounts on events?
Alternatively, you may want a closer, ongoing relationship. You might want to find opportunities to volunteer and raise awareness, to meet new people or gain new skills and experience. You may even find a charity where you can add value by lending your time, skills and expertise to management and governance on a pro bono or paid basis.
Consider whether you want to associate yourself publicly with the charity to raise awareness of the cause, and how it fits in with other relationships in your life — such as friends and family, and other organisations such as your employer.
Are they legitimate?
Before you go any further, check that they are a registered charity, whether you can claim Gift Aid on your donation, that their payment methods are secure, and they are up to date with submitting information to the Charity Commission (or their equivalent local regulator).
Other things you may want to check at this stage are the charity’s policies. Many charities work with vulnerable people such as the elderly, sick, disabled, or young people and should have policies and mechanisms in place to protect them from abuse. It should also be clear how complaints should be made, and how they’ll be handled.
What do they do?
Find out what their aims are (particularly whether their job will ever be ‘finished’), and what activities they carry out to work towards those aims. Typical activities include fundraising, direct support to beneficiaries, research and development, and lobbying governments and corporations for change. Find out what geographic area they cover, groups of people they benefit, and which other charities tackle the same issues (and how do these charities differ)?
Finally, try and understand how they’re structured — particularly how they use employees and volunteers, and whether they outsource activities to other (often more local) organisations. Which other organisations do they work with? Do they receive government subsidies or contracts for delivering particular services (often referred to as restricted funds)? If they do, what is their size (often determining how much administration is involved in bidding for and monitoring the contract), and how often do these come up for renewal?
Where are they headed?
Do they have any new campaigns or specific projects planned, or do they typically do the same thing year in year out? (Neither is right or wrong here, as long as you are comfortable with the approach.)
Are they growing, and how fast? See also: Timing of your donation, below.
In terms of steering their future direction, who is on their Board of Trustees (particularly, is there diversity in knowledge, skills and expertise), do they have independent firms publish evaluations of their work? Are they open, transparent, and self-critical in their communications?
Do the numbers make sense?
Charities come in different shapes and sizes, some are more high profile and have clearer outcomes than others. It’s your choice whether you want to donate to a charity that is new or established, that has failed to balance its books or has profitable trading activities or investments, is tiny or has thousands of employees.
The Charity Commission website and the charity’s annual report will provide information including their income and outgoings (and the size of the gap between them), number of employees and volunteers, how much they have saved in reserves and their outstanding liabilities, and the split of how they spend their money.
It’s often useful to compare these over the course of a few years. Just be aware that you can’t always easily compare different types of costs between different charities — some charities work in highly regulated sectors, have high running costs such as international travel or research programmes, or have different fundraising and delivery strategies.
Finding out more about your chosen charity or issue
Particularly if you’re donating a large amount, regularly, or have doubts about them, read some news articles about them (and not just on their own website), volunteer for them, speak to people who’ve been involved with them in the past, and if you still have burning questions then ask the charity directly.
You may wish to understand how people are affected by the issue and the charity’s activities, the challenges faced in finding and delivering solutions, different points of view and alternative approaches. You may also want to spend some time investigating where they invest their money
Some of the harder questions to answer are around the charity’s culture and ethics, ambition and creativity, treatment of employees, approach to continuous improvement, how sustainable their activities are, and what changes might affect their effectiveness in future.
Some broader issues
Tackling root causes
“If you teach a man to fish, he can feed himself.” Are you more interested in tackling the root cause of issues such as better education, infrastructure and changes in culture and socio-economic systems?
Achieving maximum impact
Impact can be measured in many ways, but in the case of health outcomes a key measure is ‘quality adjusted life years’. Generally, donations to the most effective charities in the most impoverished countries will have a greater impact per pound spent. For example, in the USA, $56,000 would provide one quality-adjusted life year to a sufferer of ALS. The same amount of money could alternatively provide 500 quality-adjusted life years if spent on bed nets for malaria.
Thinking long term
When responding to particular events, the first few days can be critical in making a difference — especially in providing food, water, shelter and medical aid — and some organisations have developed incredible processes to set up significant operations in challenging environments in a very short space of time. But it’s very easy to move on without thinking about the aftermath: families may be separated, buildings and infrastructure may need to be repaired, businesses may need help getting back on their feet after periods of inactivity, there may be political instability. Things may also get better and worse at various points.
Timing of your donation
Some charities raise more money seasonally, such as religious charities around religious festivals, or healthcare charities around annual campaign periods like Movember. Spontaneous campaigns also pose challenges. For example, the ALS Association in the USA raised over four times more money than usual through the Ice Bucket Challenge ($70m and counting, compared to donations of $15.2m last year). They will now need to decide how the additional money changes their operating model or governance structure, gauging whether they are likely to benefit a long-term increase in donations or whether the Challenge constitutes a one-off spike. They will need to ensure that any new employees in their expanded team are of high enough quality, and integrated effectively into the organisation. They may need new buildings, IT systems and other infrastructure. They are also likely to have to invest more of their funds until they can be spent effectively, deciding on a balance between risk and returns. In contrast, the proportion of extra income to the Motor Neurone Disease Association from the Ice Bucket Challenge in the UK is still very small (around £250,000 extra raised to date, compared to donations of £11.4m last year).
Making regular donations
Regular donations provide many benefits to charities: they reduce spending on fundraising activities, have lower collection costs than credit and debit card or mobile transactions, and are more likely to have Gift Aid set up correctly. They also allow charities to plan ahead, which is especially helpful when making long term investments or borrowing funds.
Other ways to use your money for good causes
Much of our taxation benefits the vulnerable and disadvantaged; paying the taxes you owe in full supports these people.
Peer-to-peer lending (such as through Zopa) and Credit Unions can help individuals avoid high interest loans, and secure funding where a bank would not assist.
Crowdfunding allows individuals to group together to fund projects, with some platforms such as Abundance Generation focusing on good causes.
The money you spend on everyday goods and services circulates around the economy in different ways depending on where you spend it. By shopping with independent local businesses, ethical companies and cooperatives, more of this money is likely to be circulated to the local workforce and on taxes, and less to financial institutions and wealthy investors in comparison to multi-national corporations.
Whatever the charity, good cause or your reasons for donating, ‘Thank You’. However, please remember that donating to charity can be a very personal activity and others may be less willing and/or able to give.
Some sources I referred to whilst writing this article:
Charity Commission — Find a Charity
Charity Commission — The Hallmarks of an Effective Charity
City Philanthropy — 7 top tips for picking a charity to support
The Ecologist — Charity donations: how to spot the most effective good causes
The Guardian — Good charities spend more on admin but it is not wasted money
NBC —10 tips for choosing a charity
Payments Council — Charitable Giving
Vox — The truth about the Ice Bucket Challenge: Viral memes shouldn’t dictate our charitable giving
