People give to charity for different reasons, but I think most people give because they believe it’s going to help environmental preservation, educational outreach, medical research and services, the reduction of poverty or animal rights. Usually this is the case, but all too often there are unknown benefactors of your generosity.
According to the DailyMail UK report, there are over 195,000 charities in UK mounting close to £80billion a year. There are many other important things you need to know before giving to a charity, such as how valid its mission is and how successful it is at accomplishing its goals. Having some information is better than none—and the key financial indicators can be telling.
Ask the charity organization what percentage of donations goes to support the programs instead of overhead and administrative costs. Be cautious of a charity that says 100% of donations go to support the cause. In the end, there has to be at least some overhead.
It’s useful to know how much of your money is absorbed by overhead, and how much goes directly to the cause. We understand that charities need to spend some of the money they receive on things like accountants and offices for support staff—but if a charity is spending more on such things than the cause itself, we think there’s some explaining to do.