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Fixing Charity Organizations

Updated on July 9, 2017
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Jack is currently a volunteer at the Westchester County Archives. Jack has worked at IBM for over 28 years.

Introduction

Recent negative news about charities such as the Clinton Foundation leads me to ponder what charities do in general and how they help or hurt their causes. Do we really need to fund these organizations with our tax dollars?

- Aug. 2015

Some Charities Are a Good Thing

There is no doubt in my mind that some charities are great and they do wonderful things. They serve a purpose where help is needed. In a Democracy, where limited government is valued, some assistance is necessary from local agencies and staffed mostly by volunteers with kind hearts who genuinely wants to help others less fortunate.

A prime example of this is Catholic Charities USA. Catholic Charities USA (CCUSA) is the national office for Catholic Charities agencies nationwide. Catholic Charities USA’s members provide help and create hope for millions of people a year, regardless of their religious, social, or economic background. CCUSA provides leadership and support for the work of local agencies in their efforts to reduce poverty, support families, and empower communities.

The mission of Catholic Charities is to provide service to people in need, to advocate for justice in social structures, and to call the entire church and other people of good will to do the same.

Some Basic Principles of Charities

Here is what I believe qualifies as a charity organization.

  • A specific target or problem must be defined such as a disease, or social issue or environmental topic.
  • A foundation is only a charity if it meets the first requirement. A personal foundation is not enough to qualify to be a charity.
  • A charity cannot mix various activities such as support for a public candidate for office.
  • A charity must show some results where they have made a difference.
  • A charity must not spend more than 10% for fund raising and 10% for administration.

How To Fix Our Charities?

Here are some of my ideas to fix the charities.

  • Charity Organizations should not spend more than 10% of their revenue on fund raising. If the charity is worthy, people will donate to it and no amount of fund raising enticement will matter.
  • Charity Organization even though they are non-profit, should still be run as a business and common business practices should be applied. This is just common sense.
  • Tax exemption for charities should be scrutinized by the IRS so that they are not abused.
  • Activities of the charity should be clearly defined and restricted. It should not be combined with political related activities where a conflict of interest could be drawn.

Fund Raising For Charities

One of my pet peeves is the endless fund raising activities that seems to spend more than they raise. In fact, some are wasteful as with the ice bucket challenge for ALS. They are also a tool for celebrities to show their caring nature.

The Bible verse Matthew 6:1-4 has the right idea: Beware of practicing your righteousness before other people in order to be seen by them, for then you will have no reward from your Father who is in heaven. Thus, when you give to the needy, sound no trumpet before you, as the hypocrites do in the synagogues and in the streets, that they may be praised by others. Truly, I say to you, they have received their reward. But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. And your Father who sees in secret will reward you.

ALS Ice Bucket Challenge - Do they help?

Some Facts...

  • According to the National Center for Charitable Statistics (NCCS), more than 1.5 million nonprofit organizations are registered in the U.S.
  • A good, highly efficient, charitable organization usually spends about 75 percent of the money it raises on charitable programs and the remaining 25 percent on general administration and fundraising.
  • Some Charities' CEO are paid as high as $500K per year.
  • Top 3 charities in the US are United Way, Salvation Army and Feeding America.
  • Top 3 Foundations are Gates Foundation, Bristol-Myers Squibb Foundation and Abbvie Patient Assistance Foundation.

Summary

The problem with some charities is that they don't live up to their mission. The tax exemption becomes an incentive in itself and the fund raising activities becomes over consuming and occupy most of their time. It is time to fix the charities by changing the tax policies. The people most in need will benefit from the improvements.

© 2015 Jack Lee

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