'Tis the season for giving, but let's do it wisely.
Congress, concerned that all those hurricane-relief dollars flowing south could pinch charitable donations elsewhere, fashioned the Katrina Emergency Tax Relief Act of 2005. The law generated unprecedented opportunity for nonprofit giving this year. That's good news for the 321,000 nonprofits with gross receipts over $25,000. But it's even better news for the majority of U. S. charities — 840,000 of them — with annual revenue of less than $25,000. The strategy is working: More than $3 billion in private donated relief from ordinary Americans has made this a record breaking year for giving.
You always hope that when Americans offer such an outpouring of generosity, that the money will be used effectively. Recent history isn't comforting. The Chronicle of Philanthropy analyzed the torrent of aid that followed the tsunamis last year in South Asia. The paper concluded that "signs of progress remain rare as the calamity's one year anniversary approaches. Lack of coordination among charities and government agencies, as well as misguided gestures by well-intentioned donors, volunteers, and charities, are key reasons."
Good intentions are not enough. The most significant giving season of the year is no time to relent in our vigilance to avoid the unintended consequences of hurricane recovery (or in any other social need area either). From the smallest, personal kindness extended to an individual hurricane victim, to the most generous in-kind and cash donations of corporate America, due diligence remains important. Donors should do as much homework as they can, and use publicly available evaluation services like Charity Navigator. These services can tell you how to avoid a donation scam, or flag a charity that is less interested in helping the needy than helping themselves. Beyond balance sheets and metrics, individual donors will also want to make sure that the moral aims of a charity are in line with their own.
Look for groups that run lean. The Association of Gospel Rescue Missions has national coordinating offices in Kansas City. And when a member missions in New Orleans was wiped out and evacuees headed to Dallas and Houston and points west and north, AGRM coordinated the tremendous relief effort for the intact missions. And AGRM is taking absolutely no percentage, no cut whatsoever, for administrative costs. Every dollar donated goes to programming. Such is true for many small charities across the country.
Don't forget about volunteering time and talents. Interestingly, people who are pessimistic about government charitable initiatives are more likely to be engaged in private work themselves. In fact, according to Arthur Brooks of Syracuse University, people who reported "hardly any confidence" in the federal government are 20-percentage points more likely to volunteer for a charity.
When we give our time, when we give our money, it is possible to do so wisely. The better prepared we are when we give, the more effective our generosity is likely to be.
Karen Woods is director of the Acton Center for Effective Compassion in Grand Rapids, Mich.
By Karen Woods
Reprinted with permission from National Review Online