Dec. 20, 2011
BOSTON — The holiday season is a busy one for charities. Shoppers give spare change to the red-suited bell ringers outside stores, while businesses cut year-end checks to finish out the tax season.
It’s certainly the time of good feelings for those helping the less fortunate. But people want to know their donations will be put to good use. An exchange on The Callie Crossley Show underscores how difficult it can be to objectively rate and analyze whether contributions are well spent.
Enter services like Charity Navigator, which use criteria like the financial health and transparency of charities to rate how they well use donor dollars. Charity Navigator CEO Ken Berger said it’s the best way to avoid misunderstandings.
“You wanted to see basic health research done,” Berger said, as an example, “and this organization, what it ends up is doing advocacy for policy legislation change. And that’s great, but not really what you had in mind.”
However, Paul Schervish, the director of the Center on Wealth and Philanthropy at Boston College, raised questions about evaluating charities. He said that in a class he teaches, a student was misled by an organization's low rating: “[She] had one group she was very impressed with. When she looked it up [it was rated only] two stars.”
Schervish said it was because “the director was paid $119,000 relative to the costs and expenses of the organization. This is a place that serves lunches to women with tablecloths.” However, he thought executive compensation shouldn’t be the only determining factor. In this case, the organization serves 50,000 lunches a year, he said, and the director “is doing a lot of work, because the outcome is so valuable and they get their materials so cheaply.”
Berger said Charity Navigator — a free web service — uses many different criteria to determine ratings.
“Charity Navigator doesn’t rate any organization based on CEO pay. We look at the ratio of expenses in the program area and infrastructure and so forth,” he said.
Berger noted that the best way to know whether dollars are being used most effectively is to visit the charity and “eyeball it yourself. Certainly in the case of smaller organizations, the only way to get it is by going there yourself.”
But, Berger acknowledged, “The vast majority of people are not going to do that.”
With the holiday season in full swing, time is running out for would-be donors to check up on charities and decide for themselves what is or isn’t a cause worthy of their support.
NPR: U.S. MOST CHARITABLE NATION