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As we watch the calamity that has befallen our impoverished neighbors in Haiti, many of us are scrambling for ways to help. And we certainly encourage people to focus their gaze on Haiti and remember that "There but for the grace of God, Go I."
Having the financial ability to help those in need or in distress is one of great benefits of living sensibly and watching your money. That extra firm financial cushion you build can always be used to comfort others and give them a helping hand. But how do you determine if the charity you donate to uses your funds to efficiently distribute aid? The recent earthquake in Haiti has people asking just that question. Here are some of the ways you can evaluate which charity will make the most of your donation to Haiti.
The single best resource out there to analyze charities is Charity Navigator. Thankfully, they have setup a page of all the major nonprofits helping out in Haiti and what they are actually doing there. In terms of analyzing which charity to give to, consider the following elements:
What Exactly are They Doing in Haiti: Some charities are simply sending food and water in air drops, while others such as Doctors Without Borders are treating Haitians on the ground and are constructing a temporary hospital. Make sure that the charity you choose is doing the work that you think should have a priority. In the case of Haiti, there is a critical need for basic health care to the wounded survivors of the quake.
Designate Funds for Haiti Only: To the ire of many donors, many large nonprofits including the Red Cross diverted funds that were designated for Katrina to other uses. Make sure that you specify that your funds are to be used specifically for Haiti. If the nonprofit doesn't allow this, think twice about giving to them.
Administrative Expenses: Review the nonprofit's administrative expenses compared to their revenues. While it's hard to compare charities of different sizes, administrative expenses should be less than 5 percent of revenues unless the charity is small. Note, however, that big charities with billion dollar budgets will naturally have small administrative costs as a percent of revenue.
CEO/President Salary: What an organization pays its top dog is an indication of what top administrators make. Take into account that running a $10 million charity isn't the same thing as running the Red Cross. Regardless, some CEO salaries have little justification and your donation will go towards funding management salaries.
Fundraising Costs: Some charities use a substantial portion of your donation to raise money from other donors. Generally, these costs should be well below 10 percent. Some of the best known charities have grown big precisely because of how much they spend on fundraising. The well known Heifer International spends a whopping 16% of all it's revenues on fundraising while the William Jefferson Clinton Foundation spends only about 2.6%. The lower the fundraising costs, the more money is available for programs.
Don't Give to Telemarketers: What drives up those fundraising costs is the giving that comes through telemarketing which takes a huge slice of the pie. Always give directly to the charity itself to ensure that all of your money has the chance to be utilized by the charity for the good work they do.
Remember, it isn't just enough to give to Haiti, you have to make sure that your money gets to the people that need it and that the charity you donate to you has an efficient organization.
For more information on which charities to give to in Haiti, visit Charity Channel's excellent Giving Guide to Haiti which lists over 100 charities and has a great guide on what to look for and what to avoid.
You can also visit nearly any major charity's website which will have information on what they are doing to help in Haiti.
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