A Guide to Charitable
Giving, Part 1

Introduction

Let me start this guide with a bold statement. The vast majority of charities are poorly managed and don’t put nearly enough of the funds they receive toward their stated goal. And when they do, it’s often not in a timely or impactful manner.

As I frequently say to the people soliciting donations, “If your cause is as worthy and pressing as you say, why don’t you put more of the grants you receive to work right away?” You’d think my question would be met by a long moment of silence, but that is rarely the case. Typically, the caller is perfectly familiar with such objections and politely ends the conversation. After all, staff members have no control over policy decisions. How much is spent on fundraising, administration and management salaries is decided in the executive suite.

I’m not one of Warren Buffett’s fervent fans, but some of his comments about philanthropy deeply resonate. This one sums it all up: “Giving away money is easy. Giving money away well is fiendishly difficult.”

In this series of essays I will reflect on my own journey through the charitable universe and explain how you can be sure that your gestures of kindness will not be in vain. After all, there are exceptionally efficient and impactful charities out there. Once you find them you’ll know that your gifts make a difference. Instead of dwelling on the world’s misery, you’ll focus on what is possible!

 

What is Charity? (The Lemonade Stand and the Refugee Camp)

When the conversation turns to charity, many people join in with memories of their childhood days. “Yup, we used to have a lemonade stand on summer weekends, raising money for cancer research.” Then they proudly add, “Now my kids do the same thing—except we adults have to make the lemonade.”

When I grew up in rural post-war Europe the meaning of charitable giving was quite different. Where there was need, people helped each other. The universe of charitable organizations was far smaller than it is today. My father, a young dentist then, often came home with a crate of apples or a couple of hams—things he’d been given by farmers who couldn’t pay their bills. My mom didn’t like that and sometimes called him a bad businessman, but then quickly revised her narrative when she noticed we children were listening. Looking after the less fortunate, we were told, was an imperative.

At Christmas time, our mother sat down at the kitchen table and wrote notes to those she felt needed help: the Franciscan monks, the Dominican nuns, the Swiss Red Cross, the Institute for the Blind and the Salvation Army. She placed a ten-franc bill in each envelope and a postage stamp on the outside. As economic conditions improved and my father achieved unexpected success with his practice, the pile of Christmas envelopes and the amount of money they contained grew. The causes my parents now supported included a bird sanctuary, cancer research, programs for disabled children and numerous others.

In my early twenties, when backpacking around the world on something like ten dollars a day, I experienced a completely different face of charity. Here is a page from my battered travel journal:

The camp outside the city is said to accommodate more than half a million refugees and is serviced by a staff of 400. I join the short line-up of visitors wanting to get in, present my credentials, and get a piece of paper showing my name and passport number in Western characters, alongside numerous other notations in Hindi. As I enter, I’m intimidated by the vast ocean of canvas and cloth I see, most of it in shades of beige, brown, grey or green, suspended by a variety of ropes and wooden stakes. I first conclude that a huge logistical effort must have made this possible. Then I change my mind: more likely, this all started with a thousand tents, probably supplied by the Indian army, and when by day three or so tents were no longer available, every thinkable substitute was brought in, in a chaotic effort to give the desperate masses streaming in each day some token form of shelter.

The front line of tent city is relatively uncrowded, taken up mostly by processing desks and medical examination facilities. Some of the staff here are Westerners; I hear English and a few Scandinavian sounding exchanges. I walk by the food distribution centre. A couple of trucks filled with high stacks of bags of rice are backed up here, and the line-up of people waiting to receive their allocated ration snakes deep into the thicket of shelters. I ask one of the staff how much each person gets. It depends on what type of voucher they have, the young woman hollers back: adults 400 grams per day, children 150 grams. Some of the people lining up have vouchers for a whole family, she explains. The line-up is between six and eight hours long. 

Apparently free to go wherever I want to, I walk past the outer periphery, into the next layer, and it’s here that I encounter unimaginable scenes. The deeper I get into this miserable community, the worse it gets. Starving children lie around, bellies badly extended, some with parts of their faces covered with thick clusters of flies. Many of the adults look emaciated too, some uncontrollably crying, others laughing hysterically, then breaking down. There are mothers holding babies to their withered breasts, the babies too exhausted to suck. I see one mother collapsed on the ground, next to her dead toddler, hysterically sobbing. 

I can’t take it for long, this wretched display of human suffering. After an hour or so, I turn around, making my way back to the perimeter tents and chat up a young nurse. She’s leaning against the side of a fencepost, smoking a cigarette. She’s from Hungary, a member of a Soviet relief delegation, and she works at the processing desk. The stories of abuse and cruelty are unbelievable, she tells me—babies randomly bayonetted, women raped by whole groups of Pakistani soldiers, men loaded onto trucks to be taken to the nearest field and executed. She’s convinced India will soon enter the war and it’ll get even worse. 

What I saw outside Calcutta that day in 1971 was a small part of the disaster that is now referred to as either the Bangladesh Genocide or the Bangladesh Liberation War, depending on perspective. The idealism and unreserved humanity of the exhausted camp volunteers I met that day left me stunned and imprinted me forever.

I travelled on afterwards, eastward through Asia at first, where I soon found myself amidst the chaos unleashed by the Vietnam War. Eventually, I crossed the ocean to settle in one of the world’s most blessed places, Canada. It was as if the universe was rewarding me for my efforts to open my eyes and explore.

Much like my father, I struggled to make a living at first, but soon succeeded on a scale I could not have imagined. Within a few years, I earned what seemed to me enormous sums of money and, once a year at Christmas, gave a percentage of it away. I knew little about the organizations I supported, nor was I in touch with them or understood how exactly my donations were used. What mattered was that I could write an ever greater number of cheques. It made me feel incredibly good; I felt that the long hours I worked generated benefits not just for myself, but also the world outside. Giving money was even better than earning it—I felt I was making a difference.

Twenty or so years into my career, a remarkable thing happened. A lady from Doctors Without Borders called me. She said they’d noticed my steadily growing annual donations and were thankful for them. Would I like to come and visit, so that they could show me what my grants had accomplished?

It was a Friday when I arrived at the charity’s offices; I know that because I remember feeling terribly sorry for myself. I’d had a rough week at work, one of the worst ever, with administrative entanglements and a lousy market leaving me exhausted.

Then, after being introduced to some key people, I met the logistics expert who directed the relief operations of which Canada’s section was in charge. Sitting down in his tiny and heavily cluttered office, I casually asked how things were going. “Well,” I was told, “it’s been a difficult day.” He vaguely pointed at the white-board on the wall behind him, where column headings referred to some of the most challenged places I could think of: Chechnya, the Nigerian Delta, Haiti, Somalia and half a dozen others—civil war theatres, refugee sanctuaries, hotbeds of disease, places where malnutrition and famine reigned. I asked my host to tell me more.

Sometimes, he explained, staff can move without constraint and help on a massive scale. But just as often, there is a population group, a military faction or a government that intervenes, blocking the mission’s work or tyrannizing the victims seeking help. “There are moments when you come to accept abuse, beatings, and even loss of life as almost commonplace,” he said. Then he told me about the abduction of a friend he’d been in the field with not long ago.

There are times in life when we need perspective and context, and this is what my first visit to Doctors Without Borders brought me. I was back where I’d been, seemingly a lifetime ago, when I visited the refugee camp. Not only did my work-related problems seem utterly trivial, but there was so much more. The man I’d met with had stayed long past his office hours taking time to explain, to open himself to me, to tell me about his ongoing struggle to come to terms with what he routinely experienced.

I felt humbled, yet so grateful. I’d just been taught how comparatively insignificant my contributions to society, humanity and the universe were.

I made it my business to regularly visit Doctors Without Borders. And each time I stopped by I learned more. Before long, my new friends became my heroines and heroes. Their work inspired me on a personal level, teaching me about commitment and focus, and what can be done when all seems hopeless. I also became intrigued with how well they managed an extremely complex operation. Having held executive positions in the financial industry and being overly familiar with financial analysis, I found myself baffled by how Doctors Without Borders could achieve unrivalled social impact while being run on an insanely disciplined budget.

Some of my newly gained insights came with regrets. As I studied the operational efficiencies of Doctors Without Borders, the weaknesses at other charities became woefully apparent. Some of the organizations I’d given money to turned out to be cash-hoarding machines, banking vast amounts of money and channelling only a small portion of donations to what their literature portrayed as causes in desperate need. Others had unacceptably high administrative costs, often aggravated by excessive management compensation. Then there was the issue of fundraising: did I want my donations to make a difference now, or would I prefer that my money be spent on pamphlets, advertisements and call centres? To be sure, soliciting donations can be an important component of running a charitable enterprise, but the scale has to be justifiable. Of the causes I had supported, a disturbingly large number were spending between 30% and 35% of donations on fundraising!

Clearly, I’d given a lot of money to undeserving organizations, and thus deprived the best-run charities of funds they could have used far more effectively. Doctors Without Borders was one of them, and in time my research brought me to others, some in completely different areas of charitable activity . Gradually, I learned to give better—to give in a more targeted and intelligent way, to give where I could make the biggest difference.

 

“There are three kicks in every dollar. One when you make it. One when you save it. One when you give it away. And the last is the biggest of all.”

William Allen White

 

What else is there to say? In sharing my experience and presenting my conclusions I hope to have made only one major point: if the intention behind your charitable giving is to help in the most effective way, carefully consider where your donations should go.

There are tools that can greatly facilitate your search for worthy candidates. A list of different Canadian and U.S. services follows in my end pages. For now, just let me say that Canada’s Charity Intelligence is the best I have found so far. It ranks organizations by accountability, financial transparency, engagement, social impact, cost efficiency and other benchmarks.

No matter what country you live in and what service you will turn to, checking out its leading charity rating organization will give you valuable insights. Its data and editorial comments can be invaluable when it comes to balancing your intention to give with incisive, up-to-date information.

Once you take a closer look, you’ll be perplexed by what a small percentage of charities and non-profits deserve your support. But then again, you’ll be even more surprised how much the most worthy organizations can accomplish!

 

Reprinted from Peter Cavelti’s “A Guide To Informed Charitable Giving”, copyright 2023. Published by the Author. Content may be reprinted with proper attribution.