The consequences of the unfortunate calamity at Nepal are beyond our control, well after a certain extent. The least we can do is come together as one strong unit and support each other. All the hard work we do and the riches we accrue, get wiped off in a second of one such calamity. This moment is all we have and if our hard-earned money can earn a moment for someone in need, let us donate. A lot of noble organizations are setting up donations for difference causes and most of us, who want to donate, are confused where to donate. Let us first understand how donations work.
Expense-breakup of Donations
For every dollar that you donate to a charity, how much do you think is actually spent for the cause? In the best-case scenario, 85-90 cents and in most cases 60 cents. While in the need of the hour, every penny counts, still it does hurt to confront the reality of financial manipulation even in catastrophic situations. Given the reality, here is a guide for you to choose where to make a donation.
Whenever you choose an NGO, organziation or charity to donate for a cause, do the research on the following measures:
- Program Expenses: It reflects the percentage of the total budget that is being spent on the actual services that the program stands for. The more the program expenses the better it is. You would ideally like the number to be around 85-90%.
- Administrative Expenses: It reflects the percentage of the total budget that is being spent on the organization’s administrative staff, group meetings, people management, overhead expenses, etc. You would want to minimize this number. If the number is more than 33%, think multiple times before donating.
- Fundraising Expenses: It reflects the percentage of the total budget that is being spent on the efforts made by the organizaiton to raise money. It includes public relations, campaigns, events, marketing costs, memberships, etc. Again, this number should be minimized as a part of it will be recovered from every dollar that you spend. Ideally, you would like this number to be under 10%.
- Crowdfunding Expense: Crowdfunding websites allow people to donate directly to the victim and thus, you can bypass the overhead administrative expenses. But, they charge transaction fees of 5-6% on an average.
- Red Cross
- Program expenses: 90.5%
- Administrative Expenses: 3.5%
- Fundraising Expenses: 6%
- Children’s Charity Fund
- Program expenses: 6.2%
- Administrative Expenses: 9.8%
- Fundraising Expenses: 84%
Source of Information
Now the key question is where you get this information. It is the responsibility of the charities or donation websites to declare the expense breakup on their websites. If only they were all responsible. Thus, we have certain websites that dig this information for the donors and provide a pie chart distribution of these expenses. Some are free and some not. But here is a list of the best ones:
Word of advice:
Social media is definitely a huge source of motivation for us, but do not get lured instantly with the campaign videos. Do your homework and yes, please do support the work being done to resurrect Nepal. This post is a mere effort to inform you about the cost break up of donations. I encourage you to make donations, but wisely.