I recently watched an interesting video where James Altucher argued that people should not to donate money to major charities; this suggestion actually reflects the need-based criteria many of us used in our local NPO recommendations.
I like some of his argument because it makes people think about how to create greater local impact with their money, as apposed to smaller national impact.
Other aspects of his argument made me pause though. I thought about what he said on giving immediate help. That’s good, but if we only gave money for immediate relief, there would be less money for systemic relief – through advocacy, or policy and legal change.
I also thought his argument reinforced the negative connotation of administrative costs. Yes, there does seem to be some excess, but when people think about administrative costs they balance this out by thinking “I want my money to have charitable impact!” And the real needs for overhead funding are lost in the scuffle.
Does anyone else have any impressions they’d like to share?
You can read more of what James Altucher has to say here.
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ReplyDeleteI do not agree with James Altucher's notion that donor should 'never donate to a major charity'. That notion suggests that a minor charity could never become a major charity. Technically, most major charities had started small. Does this mean that once a charity becomes large that it no longer serves their clientele? I understand Altucher's intentions on focusing on local charities. However, Altucher’s suggestion that all major charities do not serve locals effectively or efficiently is inadequate.
ReplyDeleteI also disagree with the notion that donors should never support major charities. Large, global nonprofits do have the power to make changes and address major problems, and they need funds to be able to make this impact.
ReplyDeleteI agree with you about the necessity of administrative funding-- potential donors/the public should be given accurate information about the balance that needs to exist between program costs and overhead costs, and the video isn't helping. If you think about all of the researchers, doctors and other employees and staff who are connected to the American Cancer Society, then 1/10 of each dollar donated doesn't sound so outrageous. Donors who are worried about their funding being misused can also designate that the money be used for program costs.
I do think that it is very important to support local nonprofits (and would be more likely do donate to a local office of United Way or Planned Parenthood, for instance, than to the national organizations). But I also think that there is more benefit to donating to major organizations than Altucher is asserting.