Everywhere I look, people are collecting money for people in need. Facebook, television, schools, even kids in the High Street. But are all charities worth giving my money to?
I recently heard of a US based charity who were responding to the devastating effect of AIDS in Africa. Millions of children were being left orphaned when both their parents died of Aids. In response, the charity collected money for an orphanage, which they built and fully equipped. Great, except that it remains empty. Africans do not put their children into orphanages, they pass them to ever distant family members. The charity wasted both money and resources.
So, if I want to give to a charity, who can I trust? Who will use my money wisely?
Here are nine important questions to ask:
Do they have local contacts or partners in the regions where they work? This is where the charity above went wrong. A charity should have strong links with local people who can direct what the money is spent on. This does a couple of things: It means they will have proper understanding of the people they are trying to help. It also means that it will be sustainable – after people have stopped sending money the local partners will have gained skills and strengths so will be in a better place to continue to be effective.
How efficient/effective is the UK end of things? Is it a well organised charity?
How capable is the charity at assessing if a project is a ‘good’ one or a ‘bad’ one? Yes, some projects can be classified as ‘bad’. For example, a ‘bad’ project might use £1,000 to build five toilets in a village. A ‘good’ project will use that same £1,000 to train people from six villages so they can build their own toilets.
Do they have good governance? Is there a strong, independent board? This is important to check strategy, keep staff accountable, appoint good leaders, etc.
Do they employ quality staff? Are they properly qualified for what they are doing?
Do they have a good return on their fundraising costs?
Do they have a good performance record? So, do they have experience in what good development looks like and are they managing to achieve this in what they are doing?
Do they measure and monitor what happens to the money? This one is really important. Anyone can collect and send money to an area of need but a wise agency will be checking that the money is spent where it was intended to be spent. Has that new school been built or does the mayor now own a mercedes? Who is actually going and checking what happens to the money?
Is there good risk management? Places that need aid are usually a mess. There is often civil war, no social infrastructure, not a reliable banking structure, etc. Therefore, to provide aid involves taking risks. There will be a risk to staff (people get hurt/killed/kidnapped) and a risk of corruption. This cannot be avoided if agencies are to work in these places but the risk should be understood and wisely managed. For example, it might be decided that a bloke carrying £5,000 in a carrier bag is actually safer than transferring money through a dodgy bank. Whoever makes that decision needs to have a good knowledge of the risks involved.
So, how do I know where to give my money?
It can all seem a bit daunting so here are some quick pointers.
If you are donating a one off, small amount of money, go for a recognised name. I would recommend the members of the DEC. These are 13 UK aid agencies who work together when there is a crisis. They save time and money by making fundraising appeals together and spend it according to which of them is best placed to help. I have listed them at the end.
For large amounts or long term support, it is worth doing a little research. A good starting point is the charity’s own website. You can also look at their annual reports and accounts (if these are not published, ask for them. If they refuse to send them, do not give them any money!) You don’t need to be an accountant, just look for these things:
Fundraising percentage – how much of their money goes towards raising funds and how much to the people they claim to be helping? If it’s under 10%, that’s brilliant. 10% to 20% is about normal. Over 20% is a bit too high.
How many staff members do they have in proportion to how many things they do? Now, you might think (as I used to) that fewer staff meant more aid went abroad – think again. If a small organisation are doing lots of different things, they cannot be checking effectively. Where is that money actually being spent? If an agency has ten or less people working for it, it should only be working in one country. A charity with ten staff members working in twenty three countries are merely campaigning and raising money. They cannot possibly be monitoring, checking how the money is being spent, building relationships, etc.
Check the small print on the donation part of the website. Does your money go to where you think it does? You might be sending money for Ebola relief but actually, a percentage will go to administration or to other work in that region or be ‘unrestricted’ (which means the charity can spend it where it wants/needs to.)
Now, all charities have overheads, workers have to be paid. But you should know how much of your donation goes towards overheads. Under 10% is excellent, 20% is reasonable, 30% is too high and shows they are inefficient.
If you really want to help a charity, sometimes the best place to give money is straight to the ‘general/unrestricted fund’. Then when they raise money for specific appeals they can send all the money raised to the area of need.
I would like to finish by requesting that you think carefully about where you give your money. Some charities have what I think of as the “Father Christmas” factor. They will show lots of emotive photographs of small children receiving gifts and you think “Ahh, how lovely.” However, does that work really help the people receiving the aid or does it mostly just make the donor feel good? Do we give so that we feel like Father Christmas, or because we want to help?
Also, be aware that there is only so much money that is given to charities. If you give to a charity that is not wise, a charity that wastes a high percentage of the money by not checking how it has been spent, buying inappropriate goods, etc, then in effect you are taking that money away from a charity who would spend it wisely.
Please give to people in need. Please give wisely.
DEC Agencies: Action Aid, Age International, British Red Cross, CAFOD, Care International, Christian Aid, Concern Worldwide, Islamic Relief, Oxfam, Plan UK, Save the Children, Tearfund, World Vision.