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Checking Out Charities
On Thursday's show auctioneer Kelly Russell talked a bit about checking out charities she helps fundraise. In my email this morning was also this: Oregon's Attorney General's 2010 list (pdf) of Oregon's Worst Charities.
It's a ranking based on the ratio of spending on programs versus overhead — administrative and fundraising costs. (Worst on his list: Shiloh International Ministries, with just 3.63% of a $937,315 annual budget spent on the cause.) None of the worst on the AG's list are registered in Oregon, but they all do fundraising here.
And here are two hearty arguments AGAINST letting the overhead ratio guide your giving. Dan Pallotta says in the Harvard Business Review that's the worst question to ask — a "pathetic substitute for meaningful information." The founder of the non-profit Girlstart says she wants to donate to overhead. She says the overhead ratio yardstick is arbitrary, fabricated, and meaningless, plus health insurance, fair compensation, or staff retreats can all be important elements that allow a charity to do good.
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