Charitable Giving - Guest Blog Post
Written By: Evan Siggson
Evan Siggson is a pastor in Southern California for the past 14 years.
He is a journey learner who does not claim to have it all figured out. . .
Let’s begin with not assuming a presupposition that the concept of charitable giving is important. Asking oneself “wouldn’t my life and relationships be happier with more money” is a fair question. In fact, it is a question that I often wrestle with myself. At times there have been purchases I have wanted to make, and in those moments it can be hard to justify giving money away. Despite my often internal wavering I have concluded charitable giving is a key to one’s personal health. Simply watching a TV show, browsing on social media, or even driving on a freeway one is inundated with commercials. These commercials all share the same narrative; buy our product and you’ll be happier, they say. While many products have brought me great happiness, more often than not the buzz wears off fairly quick. Giving money to charity declares we are not merely consumers. When we accept our identity as consumers we end up in credit card debt with products which no longer bring us joy. Some report that approximately 70% of lottery winners end up more broke and unhappy than they were before winning the lottery. Giving money regularly to charity declares one is content. It declares I can live on less and still have joy. It says no to commercials.
Giving to charity for personal health reasons does not take into consideration the reality that there are charities doing incredible important acts of love. The key is finding which ones align with one’s mission and values. I offer the following broad suggestions on what to look for in a charity.
Overhead ratio is important, but it is not everything.
If an organization claims to build wells around the world, yet 95% of their budget is devoted to staff, a US office, and marketing that is unhealthy budgeting. However, the reality is that it costs money to properly staff and lead efforts in charity. Different organizations have various needs so it is impossible to simply create a universal benchmark. For example, as a pastor my goal is that our overhead is around 50% of our total budget. To some that number might sound catastrophic. They might not consider that the salaries and training of our staff are also efforts to better serve our community. I would suggest that hiring a competent and educated adult for $60k can be more responsible than hiring an uneducated incompetent adult for $35k. Currently our church is on the verge of leading a city-wide food bank. This effort requires many of human hours along with proper training. In my opinion it would be a shame to penalize our organization due to overhead costs considering the overhead is being aimed to feed our neighborhood and community. In fact, low overhead might suggest the organization cares very little about the quality of their service.
How much does the CEO make?
This might be an important detail to seek to glean an accurate picture of where the overhead is designated. For example, Gail McGovern the CEO of Red Cross reportedly makes an annual salary over $1 million dollars compared to the $126k William Roberts the CEO of Salvation Army earns. While organizational efficiency is important, I personally would struggle donating to an organization which pays their CEO at a level of affluence. I am more comfortable with a large overhead which is being devoted to a fairly compensated and trained team rather than one person becoming rich. If the charity refuses to share their CEO, pastor, or leader’s salary; consider not sharing your hard earned money.
Does the charity have a clear vision which their budget is accomplishing?
A friend of mine asked me to give him advice on how to save money for a down payment for a home. (I first asked if he was open to leaving California!). We went through his online banking and discovered he spent approximately 40% of his budget on restaurants, fast food, and coffee houses. It was painful, but I told him his stated vision was saving for a house, but his actual vision was eating out. The numbers always reveal our priorities. Compare the budget with the organization’s stated vision. If a church expresses a vision to care about teenagers their budget should reflect that. If a charity is declaring the empowerment of single moms, evaluate how the money is spent. The numbers will share an organization’s priorities. As with the leader’s salary, if the organization hides their budget consider hiding your donation.
Another option . . .
Perhaps consider making a designated donation to a charity rather than feeding their annual operating budget. Determine an amount you would like to give spread out over a year. Ask a pastor, CEO, leader, if they have any dreams or projects that they would like to accomplish but need funding. This year our church was able to pass out $2,200 dollars in gift cards as prizes to a local school. We rewarded the kids and families who reached the school attendance benchmarks we set with the school’s principal. This was made possible by the generous donation of one individual. When making a designated donation it is illegal for the organization to use the funds for anything other than the expressed purpose. Keep in mind under some scenarios a designated donation might result with limited tax benefits.
I would love to invite you to live on less.
Serve a greater purpose.
Find a charity you can be proud of.
Partner with them.