Giving With Mindfulness

Worth, a global wealth management magazine, recently published a list of the 10 most fiscally responsible charities that people can consider supporting with their donations.

The list provide a good insight into how these charities got it right in their core focus and provide useful lessons on how to gauge the worth of a charity.

The number one on the list is "Give Kids The World" charity that partners with local charities to help sick children. Out of every dollar that is donated, ninety-three cents are spent directly on the programs run by the charity.

The "Environmental Defense Fund", ranked number two, spends just nine cents to raise a dollar in contribution. This compares with the typical charity that spends 13% on such activities.

Michael J. Fox Foundation spends less than 3% of its budget on administrative costs, well below the average 15% that most charities spend. The Foundation is ranked number 6 on the list.

All the other charities in this top 10 list has similar profiles of spending most of their donations running programs that directly impact their beneficiaries. They all spent below the norm in administrative, marketing and fund-raising activities.

That is accountability and transparency.

A good charity spends most of its money on the cause, uses the least amount of money to raise funds and spends the least on administrations.

So, if you come across a charity that is paying its people very good salary and the head of the charity is driving an expensive car, you should be asking questions about where the money is really going.

Some years back, a charity called The National Kidney Foundation (NKF) in Singapore was found to only spend 10 cents of each dollar on its patients. And the CEO was spending lavishly on himself, flying first class to attend conventions in Las Vegas and other stuff. Their office building was furnished like a 5-star hotel, and their fund-raising activities were outsourced to consultants who charged an exorbitant amount to raise millions of dollars from unsuspecting donors.

So, it is good to donate generously to a good cause.

However, you need to be mindful that every dollar that you donate is used correctly to benefit the people in those charities.

You need to understand that charities are the steward of donors' and supporters' hard-earned money and the onus is on them to be transparent and accountable in all that they do.

Personally, I donate to Kiva, that uses the fund that you donate to lend small amounts to the poor people around the world who is looking for capital to start their own businesses, to build infrastructures in their communities or other social causes.

Therefore, donate with an open heart but make sure that your donations result in the most benefit for the people that it is intended for.