10 Reasons Why I would Never Donate to a Major Charity (or, How to be a Superhero, Part 2).

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“Giving to Charity” is another Myth we uphold fervently in the Great American Religion (just like “own a home”, or “send your kids to college”). Its time we stop blindly believing in mythology. I’m not saying don’t give. I’m not saying don’t be spiritual or don’t be good. But do it with thoughtfulness, with true spirit, with a true desire to help More harm than good is done when you blindly throw money at most charities.

When the first version of this article came out (How to be a Superhero…or why I would never donate to a major charity) I got a lot of criticism. So I’m going to answer some of the criticisms/questions that arose and I look forward to any comments, further suggestions.

(The American Religion trying to take your hard-earned money)

1)      Be a Microcharity, part 2. First off, my recommendation in the first article still holds. What I like to do is direct donation into what I call “micro-causes”.  Specifically, pick up the local paper and see who needs help RIGHT NOW where a small amount of money can immediately make a significant difference in someone’s life.

In other words, be directly, personally involved with your cause. Then you know how the dollars are being used, you know face to face who is being helped, you feel good, you solve an immediate problem, you save a life. You go from being an average guy to a superhero. Please check out the above article, as I describe the best ways to do this. For the next nine reasons I give specifics why I avoid the  major charities.

2)      I already donate to thousands of major charities. When you pay taxes, a good portion of the US budget goes towards funding philanthropic causes. I have no control over that money. Nor is that money always correctly allocated. So much corruption (not in our government but in others) has siphoned off that money. Nor do I always approve of the charities being donated to but I have no choice over it (other than a single vote out of 100,000,000). But that’s fine. I can use #1 above to balance that off. I do have to say, though, that some of those charities the government has funded has worked. We eradicated smallpox throughout the world for instance. I feel pretty good about that. So if i can use my dollars to make more money for myself, and then pay more taxes, I don’t think its such a bad thing.

(while cancer rates rising, its harder than ever to get drugs through FDA)

3)      I don’t like paying administrative overhead. For instance, for every dollar that one donates to the American Cancer Society, 9.8 cents goes to administrative costs. I’m happy that people have jobs and are hired and I have nothing against the people that work for the ACS. But I bet if I use that money to start my own company (or, again, directly help people through my own micro-charity), then more people will have jobs and more people will get their problems solved. And the ACS is probably one of the best run major charities out there.

4) I don’t like paying marketing costs. I didn’t realize this until I looked it up. But for every dollar I give to the American Cancer Society, 21.8 cents of that goes towards furthering their marketing efforts. I thought I just gave them money? Now they need more money already? So only 70 cents of my dollar goes to actually helping the families with cancer.

5) There are better ways to cure cancer. First off, it seems like I’m picking on the American Cancer Society. But this is the number one killer in the United States and one of the biggest killers out there so I might as well focus on it a little bit. And its not just cancer. What I’m about to say applies to Alzheimers, Heart Disease, Cancer, and every major disease. Companies cure cancer. Scientists with new ideas of drugs team up with businessmen, start little companies, get approximately $200mm to $1bb in funding, then develop their drugs, put the drugs through a bunch of different phrases through the FDA, and then finally if the drugs are good, they get bought by a bigger company who is better at selling the drug. That’s how cancer gets cured. That’s how every disease in the world finds a cure now. So the best way to cure a major disease at least is to put money into a biotech mutual fund which funds small biotech companies. These companies are at the frontier of major biotech research. The other thing is to lobby the government to reduce the FDA’s stringent standards on drugs. A drug costs up to $200 million or more to get through the FDA. The only way companies can recoup that cost is by charging enormous amounts for drugs. This is part of the reason why healthcare and insurance are so expensive. Drugs for prostate cancer, for instance, cost up to $93,000 a month because the billion or so it cost to get through the Federal Drug Administration.

6) Its hard to uncover charity fraud. The recent 60 Minutes expose on Greg Mortenson’s charity for building schools in Afganistan is a good example. I don’t know if this is a fraud or not. We may never know the full story.   I don’t want to know. But if it takes 60 Minutes to uncover something, using the best reporters out there, then how am I going to possibly be able to find out what’s fraud and what’s not.

(in our feverish desire to help the Japanese, hundreds of frauds took advantage)

7) Charities are businesses. Businesses have agendas. The agenda of a charity is to convince you of a cause so that you feel concerned enough about it that you donate to that charity. Example: there are many charities that try to do something about global warming. However, there is a lot of mixed evidence of global warming (this is not a debate about that but the recent scandals among scientist emails in UK are enough evidence to suggest that people often misstate the facts in order to promote agendas).  If people stopped donating to these charities, even if all the evidence suggests that their cause is meaningless, a lot of jobs would be lost. A lot of lives (the families of the people holding those jobs) would be hurt. That’s sad. But its not your responsibility to help them.  Many charities have causes that are unclear at best.  So best to avoid them.

8 ) High Unemployment. With every dollar that I don’t save, I have two choices. Donate to a charity, or spend it. A charity is only obligated to spend a very small amount per year on actual charitable activity. The rest goes into funds that generate interest. They spend off of the interest. When I spend a dollar in the economy, it instantly has its effect on jobs, growth, etc, particularly because of the “multiplier effect” (e.g. I buy a sandwich in a deli, the deli guy uses the dollar to buy a chair, the chair guy buys some books, the books guy buys a house, etc. So each dollar spent s the equivalent of $10 spent on the economy. That has immediate effect in the quality of our lives: lower unemployment, greater demand for products, homes etc.

9) Smart Allocators of Capital are on the case. Bill Gates and Warren Buffet are a 1000x better than I am at researching charitable cases, allocating their capital, investing correctly the leftover funds, etc. My $100 (or $1000, or $10,000, whatever) is not going to make a dent in their $100 billion. Let them handle the big problems. With the micro-charity idea (see #1 above, and prior article, I personally can make a great difference to people who Bill Gates will never even hear about.

10) Give in every way you can possibly give. Spend your time and efforts on proper giving. Too often, giving to charities is a way to pass on the personal giving responsibility to someone else. “I gave at the office”. In addition to #1, please check out my post: Give and You Will Receive.  Its one of my first posts here and I truly believe and try to live by it. Giving of ourselves is the most important thing we can do in our lives, and the more you give, the more benefits you will. So don’t give in order to receive those benefits, but give and then enjoy the benefits that will shower down. But the more personal the giving is, the greater the benefit.

Read More: How To Be The Luckiest Guy On the Planet in 4 Easy Steps. 

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  • http://twitter.com/AlbinoMouse Michelle Ly

    I agree with this post completely!

    I used to work in cancer research. The wastefulness and disregard of donor dollars and the constant campaigning for more money was one of the reasons I left the field. I also used to work in biotech, and you did not waste money unless you wanted your investors to desert you.

    In Canada, you can look up how charities spend their money via this link, from Revenue Canada: http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html

    • @Aceofwaste

      Without giving anything personal away Michelle; what did you go on to do after working in Cancer Research?

      • http://twitter.com/AlbinoMouse Michelle Ly

        I went into computer science. There’s a lot of patient medical data, genetic data that can’t be used because it is not organized. :) I do the organizing.

    • Boie

      Thanks for the link, Michelle, very useful. (Too bad we don’t have a Charity Navigator in Canada)

    • Boie

      Thanks for the link, Michelle, very useful. (Too bad we don’t have a Charity Navigator in Canada)

  • http://twitter.com/AlbinoMouse Michelle Ly

    Blegh – Posted before I meant to post.

    Also wanted to add that in regards to cancer especially – working directly WITH patients is the best way to make a difference . Driving them to appointments, helping them with cleaning and cooking – these things will keep their energy and spirit up and help them to recover from treatments faster.

    I’m also picking on cancer, but that’s what I’m most familiar with. Here’s my quickie on a cancer charity in Canada, similar to the one mentioned in this post:
    https://albinomouse.wordpress.com/2010/09/19/where-does-your-money-go/

  • Stevegoff420

    Ya wanna be a micro charity….feel free to mail me my rent for this month! Don’t talk about it….be about it!……Is that ‘micro” enough for ya?

  • Stevegoff420

    I am also a believer in > charity starts at home so to speak! Help the people close to you or in your area first. I go a step further and even go out of my way t patronize (what little is left in the USA) Mom and Pop establishments. Even if it means paying a buck or two more for something rather then going to say a Walmart or Home Depot. I aint going to bullshit ya….I think Walmarts and home depots of the word are killing this country. And soon in this country…..other will follow me in that practice. only a matter of time before the major protectionist and isolationist cycle come to us fully.

    • @Aceofwaste

      In this day and age where is home? County, Country or were you hang out on the net. The boundaries are dissolving, and I think that’s a good thing.

  • Stevegoff420

    Sooooo basically you “rich folks” think TAXES are charity….LMAO nice
    Leona Helmsley said it best > “TAXES are for poor people”

    Some guy on Stockpickr a couple years back…when the market was crashing…asked Jim Cramer “How do you sleep at night?”……..I answered > “Quite well…with his pillow stuffed with the money of the poor”…..lol

    • http://jamesaltucher.com James Altucher

      No, I’m not saying I advocate taxes. I’m saying, we already “give at the office” so there’s better ways to give of yourself.

  • Stevegoff420

    “charity is given from the heart….taxes are given…or ya go to jail”…..another old saying

  • AbhiJ

    Why do you want recognition in turn for charity ? I am saying this because the post’s title is about being a Superhero. Don’t you think there is some self – interest in helping someone you know.
    The criticism of marketing and advertising costs is misplaced, the same way an idea cannot create a company so cash alone cannot eradicate radical issues. The biggest defence for these organisation is they are very structured and give to the most needy(who may not be your nearest neighbour). By contributing to UNICEF etc you are contributing to a pool of money which collectively will be more effective than directly helping some. To give an analogy – You can water a plant with your mug of water. However to water a dry barren land its better to pour your mug into the water storage.

    • http://www.facebook.com/james.altucher James Altucher

      I think you are saying the same thing as me. I think. Read my earlier article also. I don’t want any recognition at all. thats the point.

  • the plumber

    sometimes when i give,to local bennifits,,it makes me feel great,,,i get more benifit that the recipient,,,but when japan, hati got hit i gave to the red cross, i know they have huge admin. cost but didnt know how to get around it, i figure thats gods problem, its up 2 him to make sure it goes to the right place,,

  • Dean

    Sounds like a justification not to contribute to charities. Hope it makes you feel better, because you’re sure as hell not helping anyone else.

    • http://www.facebook.com/james.altucher James Altucher

      Please read the article this refers to. I think there are a lot better ways to help people. No excuses.

      • TwShiloh

        Sorry, this just seems incredibly superficial. There are some problems that fall between the ‘Oh my god! That guy needs first aid!’ and ‘Leave it to Warren Buffet to fix’.

        The idea of micro causes is fine but it’s going to have a very limited, short term impact. There are a number of charities that work on longer term (not necessarily cure cancer long term) solutions that would be horribly inefficient if not impossible under the micro cause scheme.

        Further, while government does fund a host of philanthropic endeavors there are many that don’t get funded (or funded to the levels people would want). What is someone to do who cares passionately about preserving wetlands, contributing to care for some medical issue or some other cause? Is lobbying their congressperson a better way to spend their time? Or perhaps find someone who owns some wetlands, do a review of their finances and then decide to throw them a couple of bucks?

        This is where charities can come in. It shouldn’t surprise or shock anyone that some of the money charities get goes to overhead and fundraising but a bit of due diligence can give you just as good a return on you ‘investment’ as micro causes.

        Writing off all charities seems to be cutting off the nose to spite the face.

      • TwShiloh

        Sorry, this just seems incredibly superficial. There are some problems that fall between the ‘Oh my god! That guy needs first aid!’ and ‘Leave it to Warren Buffet to fix’.

        The idea of micro causes is fine but it’s going to have a very limited, short term impact. There are a number of charities that work on longer term (not necessarily cure cancer long term) solutions that would be horribly inefficient if not impossible under the micro cause scheme.

        Further, while government does fund a host of philanthropic endeavors there are many that don’t get funded (or funded to the levels people would want). What is someone to do who cares passionately about preserving wetlands, contributing to care for some medical issue or some other cause? Is lobbying their congressperson a better way to spend their time? Or perhaps find someone who owns some wetlands, do a review of their finances and then decide to throw them a couple of bucks?

        This is where charities can come in. It shouldn’t surprise or shock anyone that some of the money charities get goes to overhead and fundraising but a bit of due diligence can give you just as good a return on you ‘investment’ as micro causes.

        Writing off all charities seems to be cutting off the nose to spite the face.

  • https://jarvisapp.com/ Jay Shirley

    The link to “Give and You Will Receive” has double http:// causing it to break.

    • http://www.facebook.com/james.altucher James Altucher

      Fixed. Thanks a lot for pointing that out. Thats one of my favorite posts I’ve done.

      • https://jarvisapp.com/ Jay Shirley

        One of mine, too. Giving equity and a few others have been helpful. All excellent habits to integrate.

        PS., on the subject of micro-charities, have you seen tiptheweb.com? Not exactly the charity you’re talking of but I like the service (and they are a 501(c)!)

        • http://www.facebook.com/james.altucher James Altucher

          Interesting URL name. I’ll check it out.

        • http://twitter.com/ericf Eric Ferraiuolo

          @Jay, TipTheWeb is not a 501c3 yet, but we are working towards starting the lengthy and expensive process. We’re currently trying to pursue some outside help, both legal and financial to help us because you need lawyers to handle the back-and-forth with the IRS examiners.

          @James, you should check out http://tiptheweb.org/ our mission is to support freely-accessible, high-quality web content by giving money to web publishers who’s content is being tipped by the users of TipTheWeb. We’re committed to giving 100% of the money tipped to a publisher’s content to that publisher, which means we have an extremely low overhead :) More for web publishers here: http://tiptheweb.org/publishers/

          • https://jarvisapp.com/ Jay Shirley

            Ah, I jumped the gun. I knew you guys were registered non-profit and just assumed.

            Definitely an awesome service that I’m very thankful for having around.

  • http://twitter.com/bliss_chris Chris Bliss

    Interesting article. I don’t agree with all your points (I don’t think the amount a charity spends on administration tells you how (in)effective they are at their mission, and I don’t think climate change should be avoided), but I think your insight about microcharities and “personal giving” is right on.

    Not to evangelize, but that’s exactly the starting point for a startup I cofounded (thegoodkarma.co). We’re trying to involve contributors in the daily struggles/stories of local philanthropic organizations: the idea is to lower the barrier to entry to giving, as well as to create more meaningful feedback loops between contributor and nonprofit.

    • http://www.facebook.com/james.altucher James Altucher

      Thanks Chris. I’ll check it out.

  • @Aceofwaste

    I find the simple act of asking one question solves most of my issues in life. “How can I be of benefit to another human being, in this circumstance?” I’m a complex kind of guy, so I resisted this question for years, as it seems so simple & trite. However, it has helped me with my writing, research, business & relationships EVERY single time. It’s amazing how well my research improved when I switched from writing to show how great I was, to writing so that the reader could easily understand & validate my ideas.

    “How can I be of benefit to another human being, in this circumstance? It sounds simplistic, but just try it, and let me know what you think. You can find me on twitter; @aceofwaste.

    Hopefully, somebody, somewhere will benefit from this post x

  • BlackRaven

    #10 is probably the most important point you make James. Giving time and knowledge can make far more difference than dollars, especially wrt #1.

  • @Aceofwaste

    Sometimes just wishing somebody a nice day, and more importantly meaning it is enough. Or, even just wishing people well as you pass them. It sounds crazy, but it puts a smile on your face and people respond positively. You can also give them money. It’s not exclusive. You may or may not be correct about do-gooders and wringing of hands. I’ve no evidence either way.

  • @Aceofwaste

    I like your energy James.

  • Anonymous

    Full Contact Charity! I like it!

  • Muggiebroon

    Yes, charity should begin at home. The big charity organisations, with their PR machines, concentrate on fighting poverty and malnutrition in far flung places, they are the ‘sexy’ ones, but there are children suffering the same plight in our own towns- we don’t hear so much about them. And don’t get me started on the Royal Wedding! 20 million quid for security!

  • Themikeymcd

    Mr. A, I wholeheartedly agree with your ‘don’t give to a major charity’ beliefs. My wife and I find it much more meaningful to give many micro-gifts than throw our money into a big pool with the likes of Gates/Buffet. So we don’t get the tax break (for buying a family of 6 kids school clothes/shoes or sponsoring a day laborer to get his contractors license, etc)… it directly helps someone today.

    I think one of the worst attributes of our government is their use of tax dollars for philanthropy (see #2).

  • sbjforever

    “The other thing is to lobby the government to reduce the FDA’s stringent standards on drugs.” What nonsense! Lower this standard and be ready to accept intolerable side effects including death?

    • http://twitter.com/prideliftchairs Pride-lift-chairs.co

      I have to agree with you on that point although it seems like there are plenty of countries around the world doing their own trials on the same drugs. It seems like a large waste of resources. It seems like industrialized nations could come together on drug standards and speed up the process and save billions in drug costs.

      I agree with the rest of the post, especially the bit about the ACS and similar groups. These groups raise money to raise awareness (read money) not to cure anything.

    • http://twitter.com/prideliftchairs Pride-lift-chairs.co

      I have to agree with you on that point although it seems like there are plenty of countries around the world doing their own trials on the same drugs. It seems like a large waste of resources. It seems like industrialized nations could come together on drug standards and speed up the process and save billions in drug costs.

      I agree with the rest of the post, especially the bit about the ACS and similar groups. These groups raise money to raise awareness (read money) not to cure anything.

    • Rushrocks

      I couldn’t disagree more. Sure, some drugs may be untried, some may have known dangers, however it’s up to the consumer whether or not to accept these risks, NOT some beaurucrat. My grandpa was given 6-8 months to live from bone, lung, and brain cancer over three years ago. Sometimes it was looking like the end and then they’d get him in some experimental drug trial, and although he did have some terrible side effects he’s still alive today, the brain cancer is gone, and they think maybe the lung too (there’s a “spot” but they think it might be some kind of scar tissue).

      If he hadn’t gotten into those trials, he would probably be dead now. So my question to you is, “WHO the FUCK are you to tell anyone what medicine they can or can’t try?” Sure some are questionable, some are unknown, some are dangerous, some are deadly. But the point is, that is not your call to make. It’s not the presidents call to make, it’s not Congress’s call to make, it’s not some FDA board’s call to make; there’s only one person who’s right it is to make that decision, and that’s the person choosing to take the medicine.

      I can’t express how pissed I am at you for thinking you have any right to tell anyone else exactly what medicine they can try to live. I think it’s disgusting and sick, and I hope you change your unfortunate ways.

      • Truwoman Diana

        This would have been a good response had the questionable language been omitted. Doesn’t anyone have respect for those reading this?

        • Jimseuf

           What part is “questionable”? Thought he made his point pretty clearly.If it’s the colorful metaphor you are upset about, don’t you have any respect for common language anymore?

        • Jimseuf

           What part is “questionable”? Thought he made his point pretty clearly.If it’s the colorful metaphor you are upset about, don’t you have any respect for common language anymore?

        • Jimseuf

           What part is “questionable”? Thought he made his point pretty clearly.If it’s the colorful metaphor you are upset about, don’t you have any respect for common language anymore?

      • Eric Knee

        They do not allow enough space for me to lament on how misguided this rant is. I am glad your family member lived, I too survived cancer. I do not want hacks putting out medicine that hasn’t been tested properly. That is how they find out the side effects and thus can allow you to make an informed decision about the risks.

    • Rushrocks

      I couldn’t disagree more. Sure, some drugs may be untried, some may have known dangers, however it’s up to the consumer whether or not to accept these risks, NOT some beaurucrat. My grandpa was given 6-8 months to live from bone, lung, and brain cancer over three years ago. Sometimes it was looking like the end and then they’d get him in some experimental drug trial, and although he did have some terrible side effects he’s still alive today, the brain cancer is gone, and they think maybe the lung too (there’s a “spot” but they think it might be some kind of scar tissue).

      If he hadn’t gotten into those trials, he would probably be dead now. So my question to you is, “WHO the FUCK are you to tell anyone what medicine they can or can’t try?” Sure some are questionable, some are unknown, some are dangerous, some are deadly. But the point is, that is not your call to make. It’s not the presidents call to make, it’s not Congress’s call to make, it’s not some FDA board’s call to make; there’s only one person who’s right it is to make that decision, and that’s the person choosing to take the medicine.

      I can’t express how pissed I am at you for thinking you have any right to tell anyone else exactly what medicine they can try to live. I think it’s disgusting and sick, and I hope you change your unfortunate ways.

    • http://www.facebook.com/profile.php?id=660270965 William Blesch

      The fact of the matter is that the FDA’s standards don’t stop drugs from being approved (despite the many randomized clinical trials they must go through) that have horrifying side effects…including death. Consider statins such as Lipitor…or other drugs like Vioxx by Merck Pharmaceuticals. Each of these drugs were approved by the FDA…and the American public had to accept intolerable side effects….

  • sbjforever

    “The other thing is to lobby the government to reduce the FDA’s stringent standards on drugs.” What nonsense! Lower this standard and be ready to accept intolerable side effects including death?

  • Anonymous

    Great perspective. #5 was a huge eye-opener.

  • Anonymous

    Great perspective. #5 was a huge eye-opener.

  • pjc

    This blog post can be described in two words.
    Awe.
    Some.

    Seriously, you’ve hit the trifecta. College. House. Charity. None are bad ideas in and of themselves, but they’ve all been co-opted by managers and marketing experts so that they’re value has been wildly over-inflated.

    The response, as you’ve identified, is obvious.
    Teach yourself.
    Diversify your assets.
    Be nice to people.

    Well done sir!

  • pjc

    This blog post can be described in two words.
    Awe.
    Some.

    Seriously, you’ve hit the trifecta. College. House. Charity. None are bad ideas in and of themselves, but they’ve all been co-opted by managers and marketing experts so that they’re value has been wildly over-inflated.

    The response, as you’ve identified, is obvious.
    Teach yourself.
    Diversify your assets.
    Be nice to people.

    Well done sir!

  • UraniumC

    While I don’t always give money to the bums on the street, sometimes my spirit helpers make me.

    The other week I was in MI on business and walking to lunch in Ann Arbor. A guy approached me asking for change or a dollar maybe. I gave him a twenty. His expression was like he won the lottery.

    Some of my pals point out that he likely just spent it on booze. I’m OK with that. If I were on the street I’d be looking to dull the pain a bit too. Besides, who am I to judge?

    The only downside of this kind of giving is you can’t deduct it. But that problem is going away for me.

    At the end of next month I’ll be semi-retired. Paid off the mortgage and have the house for sale. So bye, bye schedule A. Now I can give randomly without a second thought.

    Leading up to this point I funded a Vanguard Charitable Endowment Program. Got to take the deduction when it was most valuable and can distribute the money as opportunities persuade me.

  • UraniumC

    While I don’t always give money to the bums on the street, sometimes my spirit helpers make me.

    The other week I was in MI on business and walking to lunch in Ann Arbor. A guy approached me asking for change or a dollar maybe. I gave him a twenty. His expression was like he won the lottery.

    Some of my pals point out that he likely just spent it on booze. I’m OK with that. If I were on the street I’d be looking to dull the pain a bit too. Besides, who am I to judge?

    The only downside of this kind of giving is you can’t deduct it. But that problem is going away for me.

    At the end of next month I’ll be semi-retired. Paid off the mortgage and have the house for sale. So bye, bye schedule A. Now I can give randomly without a second thought.

    Leading up to this point I funded a Vanguard Charitable Endowment Program. Got to take the deduction when it was most valuable and can distribute the money as opportunities persuade me.

  • http://ashleyscwalls.wordpress.com Ashleyscwalls

    I like that you brought up somethings I had yet to think about and supported the statements with facts! THANK YOU

  • Larry

    “Smart Allocators of Capital are on the case.”
    that’d be the toothfairy.

  • nat

    Have you ever checked out http://seeyourimpact.org? I recently went to Apolo Ohno’s talk and he mentioned about it.

  • molecule

    This makes a lot of sense but you’ve missed the most important one.

    I once was in a training class with a VP from a Multiple Sclerosis foundation. She was worried about increasing the number of offices and buying Citrix servers. If you don’t know what Citrix servers are, you get the idea.

    What about curing the disease? Well, that would be a disaster, people would lose their jobs..

    An entrenched bureaucracy has absolutely no incentive to solve any problem that would put it out of business. This is similar to the rat catching department in New Delhi that hasn’t caught a single rodent. No rats, no department, the choice is obvious.

  • molecule

    This makes a lot of sense but you’ve missed the most important one.

    I once was in a training class with a VP from a Multiple Sclerosis foundation. She was worried about increasing the number of offices and buying Citrix servers. If you don’t know what Citrix servers are, you get the idea.

    What about curing the disease? Well, that would be a disaster, people would lose their jobs..

    An entrenched bureaucracy has absolutely no incentive to solve any problem that would put it out of business. This is similar to the rat catching department in New Delhi that hasn’t caught a single rodent. No rats, no department, the choice is obvious.

    • http://www.facebook.com/james.altucher James Altucher

      Yeah, why would they be buying citrix servers? What the heck?

  • Pthompson

    One additional point to #5 is the profit potential from investing vs. giving to charity. Also, that an investment loss is equal to a taxable donation.

    Ex.

    A. I donate $10,000 to ACS. I get a $10,000 tax deduction

    B. I invest $10,000 in a cancer startup. It fails. I get a $10,000 tax loss

    The advantage of B is that if one chooses the right project one can make a huge return on their investment. One shouldn’t expect it, but there is no way you are making $$ if you give to charity.

    Which begs the question. If ACS gives money to research, and the researcher creates a cancer drug, who makes the profit?

    ACS, should (unless they do horrible due dilligence) be able to self fund on all the $$ they should have made by ‘investing’ people’s contributions is cancer drugs.

    ACS spends money on (for example) ‘awareness’ and hotels for the families of cancer patients. Curing cancer probably isn’t their number one goal, lest they find themselves out of a job.

  • Pthompson

    One additional point to #5 is the profit potential from investing vs. giving to charity. Also, that an investment loss is equal to a taxable donation.

    Ex.

    A. I donate $10,000 to ACS. I get a $10,000 tax deduction

    B. I invest $10,000 in a cancer startup. It fails. I get a $10,000 tax loss

    The advantage of B is that if one chooses the right project one can make a huge return on their investment. One shouldn’t expect it, but there is no way you are making $$ if you give to charity.

    Which begs the question. If ACS gives money to research, and the researcher creates a cancer drug, who makes the profit?

    ACS, should (unless they do horrible due dilligence) be able to self fund on all the $$ they should have made by ‘investing’ people’s contributions is cancer drugs.

    ACS spends money on (for example) ‘awareness’ and hotels for the families of cancer patients. Curing cancer probably isn’t their number one goal, lest they find themselves out of a job.

    • http://www.facebook.com/james.altucher James Altucher

      Great points.

  • Heropeter333

    this is typical rhetoric, nonsense. the cry against admin is the dumbest. Do you ask Steve Jobs how much he spends on pencils? Do you go to a great restaurant and pay your bill saying “please give this all to the chef, but nothing for heat, light, tableware etc…”?? Most charities need to spend MORE on admin, not less, if they want to be tech savvy efficient..all the things we want our busiesses to be. What busniess has to raise its entire operating budget each year ,and have no access to capital (investors) at theh same time? And what investors it has say do not spend on admin. There is room for small and large charities. get over it. Thne if a charity IS efficient, delivers programs for less, has some reserves at the end of the year, perhaps to create a small endowment to improve balance sheet, it is told “:you have a surplus, boo to you, do not need my money anymore”! Nothing fails like success.

    • http://www.facebook.com/james.altucher James Altucher

      It is typical “rhetoric”. What does “rhetoric” even mean? I guess the implication is that I haven’t thought it through. Well, thank you for asking. I have thought it through.

      And no, I don’t ask Steve JObs how much he spends on pencils. Why would I do that? There’s no connection at all. And I quite enjoy my ipad, thank you.

  • Gailxpoet

    I agree with your main point. I have some favorite charities, but I’ve probably given the most real help to the man who does yard work and odd jobs for me. He’s poor and often can’t afford medical care (hint: where’s Medicaid when someone needs it? ) With my money he’s bought prescription medicine and clothes to wear to family funerals. That’s money I’ve seen in action.

    • http://www.facebook.com/james.altucher James Altucher

      I wish more people thought like you.

  • Anonymous

    So unfortunate that when there is lots of money involved temptation is often nearby. Ultimately giving should be done with a pure and willing heart.

    There are web sites that monitor how accountable charities are and should be consulted. Not perfect but you can be steered away from those that pay executives loads of money and those that are high in admin/marketing costs.

    The important thing is to do something. Find a cause and give time or money or both.

  • Anonymous

    So unfortunate that when there is lots of money involved temptation is often nearby. Ultimately giving should be done with a pure and willing heart.

    There are web sites that monitor how accountable charities are and should be consulted. Not perfect but you can be steered away from those that pay executives loads of money and those that are high in admin/marketing costs.

    The important thing is to do something. Find a cause and give time or money or both.

    • Truwoman Diana

      Why do we give money to United Way so that they can deduct administrative costs and fund-raising costs before passing money onto a real charity? Give directly to those whom you want to get it!

    • http://www.facebook.com/james.altucher James Altucher

      This line you say “the important thing is to do something”. Yes, thats the key. To DO!

  • http://pulse.yahoo.com/_YXDKGXGVBE2UZBLNBLKTFS73NU John Giner

    I am very happy you wrote this article because it expresses exactly how I feel about charities in general. Africa is one shining example of how decades of charity and missionary work has done little or nothing to really help the poor and unfortunate. Effectively, Africa has been placed on a type of “welfare” which is a very short term solution. Instead of throwing rice out of airplanes, Bill Gates and Warren Buffet should be developing businesses in Africa and creating jobs. Handing things out to people and organizations are, at best, a short term solution. Here is a good documentary trailer to watch:

    http://youtu.be/yW20gHstfzU

    We should be helping out the people around us and the ones in our local community first before sending money out to strangers in an area of the world that we cannot locate on a world map. I have found that most every business is scammy in one way or the other. You can rest assured that part or all of your money donated to any large organization will probably not be used as you intended. Anything sent to Haiti will be taxed 50 cents on the dollar by their government. Unfortunately, its that way in every part of the world. Ultimately, your donation might go to administrative, marketing and kickbacks to politicians. If you donated $100 to Haiti then the Haitians would ultimately end up seeing $10. Horrible…

    • http://www.facebook.com/james.altucher James Altucher

      John, I 100% agree. I wish there was more of a movement around these types of ideas to really get people inspired.

  • http://pulse.yahoo.com/_H5OIWSKCSPY3Z4FHSYM4Q5IXRA richard schumacher

    You reduced your credibility and diluted the force of your arguments by admitting to doubts about global warming. What else, perhaps a call for forensic examination of the President’s long-form birth certificate?

    (For discussion of the facts of global warming see http://www.realclimate.org )

    • http://www.facebook.com/james.altucher James Altucher

      Maybe I reduced my credibility with you. But i just woke up, its Saturday morning, I have my coffee. I’m going to take my nine year old for a walk and enjoy the river, and then maybe we’ll go to a local place and get croissants. Do I need to worry about global warming this morning? Of course not.

      And not sure why you brought up birth certificates. I’m completely a-political. Next think you’re going to tell me to start reading the newspaper. Why would I willingly choose to be scared and unhappy?

      • Devin Dignam

        Silly argument, James.

        When you wake up tomorrow morning, do you have to worry about excess pollution, oil supplies running out, rare metals running out, or running out of landfill space? Probably not, depending on where you live. But those are long term concerns that are certainly problems that must be addressed. Likewise with climate change.

        The email “controversy” with respect to climate scientists was manufactured by climate change deniers. There is no controversy. Climate change is happening, and it is largely a result of human activities. To say otherwise is to ignore all the scientific evidence.

        I did agree with your initial premise, but you lost a lot of credibility once you outed yourself as a denier.

        I fully expect to see this comment edited or removed, as you seem to dislike comments that are critical of you.

  • bobn

    Interesting article. In general I have usually had a tie to a local charity and have donated to those charities. However, most of these charities only help people in the US, and particularly for me, in the Northeastern US. So, what about areas of the world ie Africa and Haiti, etc, where it is not possible to give to a local charity that helps the problem. Most of the real difficult suffering in the world is outside the US, and there are few local charities that deal with it. (I am a member of a local church which does often help first hand building buildings/plumbing systems for clean water etc, and churches do often have strong local ties to another international local community, but most of these situations are through churches, and a lot of your audience may want to mitigate world suffering, but not be tied into a church or similar situation). So…

    Do you think your thesis still holds for international situations?

  • Anonymous

    Good Post.

    May I add a great quote I found:

    He who gives money, gives much.
    He who gives time, gives more.
    He who gives himself, gives all.

    ~TS Monson

  • Tom

    I believe almost every institution works better the closer it is to the people……a grass roots constituency. I think that more often than not, city or county government is more efficient than state government and that state government is more efficient than the Federal government. I think that is true for the simple fact that the more local a government is the more you can hold those officials accountable. I know the mayor of my town and some alderman. They answer to me (and the other local citizens) when there are issues. The federal govenrment has never asked my opinion on anything and I’ve never even met met most that function in that realm.

    The same thing is true with charities. If I support a local charity where I can go over and ask to see drawings of the new retardation center, animal shelter, etc., that is a good thing. In my commuinty we have some small charities that work internationally. Several of my friends have gone over and seen the projects they are involved in and have vounteered to help local aspects of those projects.

    Give where you can hold people accountable and they know (or want to know) you and care about you. Also, projects your church or civic clubs are involved in are also good bets. Again, these are projects “closer to you”.

  • Anonymous

    Charities like any bureaucracy inevitably draw the worst of mankind. They’re not unlike politics in many respects. The honest way to solve the worlds problems is to do so with the full intent and purpose of profiting. Note I said profiting not profiteering. Giving value for value and taking risks with your capital in anticipation of reward. Where a problem exists so to a demand exists and solving this problem is best done by those that stand to profit from their solving the problem.

    Charity along with religion is founded in the concept of forcing people to perform in a certain way using guilt as a method of extraction.

    If I was to list the individuals over mans history that have contributed the most to the betterment of mankind then I’d be listing a long succession of wealthy entrepreneurs. Bill Gates has done more for mankind by profiting with the creation of jobs, products that enhance peoples lives etc than he will ever manage to achieve by squandering his money in charitable affairs. These charities may exist for a short period of time in the fashion that they were meant but eventually they are overtaken by people who think that they have the right and skills to distribute other peoples money according to their own view of the world.

    • Clifford Olsen

      “If I was to list the individuals over mans history that have contributed
      the most to the betterment of mankind then I’d be listing a long
      succession of wealthy entrepreneurs.” Yes and also the LARGEST CHARITABLE organizations- Carnegie, Rockefeller, Vanderbilt, Gates…Profit is no indicator of assistance or else the most profitable corporations would be the largest employers which is obviously not the case. Perhaps these wealthy individuals unlike most have found the secret to true wealth.

  • Katt

    I’m a big fan of kickstarter. I can give directly, to things I believe in. To someone that my little $10 really matters to.

  • Katt

    I’m a big fan of kickstarter. I can give directly, to things I believe in. To someone that my little $10 really matters to.

  • Katt

    I’m a big fan of kickstarter. I can give directly, to things I believe in. To someone that my little $10 really matters to.

  • Katt

    I’m a big fan of kickstarter. I can give directly, to things I believe in. To someone that my little $10 really matters to.

  • GGGates

    If you’re nervous about giving money to a huge charity, give locally. I know in my area (Los Angeles) there are sooo many organizations that I can donate to, & I know where my money is going. Also, check out CharityNavigator.org & see how each charity spends their money.
    Please do not spot giving to causes because you’re afraid or because there are unscrupulous organizations out there. There are so many more good then bad people that are really trying to help. I probably give more money to causes then most (all animal ones) & I know 90% of the time exactly where my money is being spent. Don’t stop giving :)

  • GGGates

    If you’re nervous about giving money to a huge charity, give locally. I know in my area (Los Angeles) there are sooo many organizations that I can donate to, & I know where my money is going. Also, check out CharityNavigator.org & see how each charity spends their money.
    Please do not spot giving to causes because you’re afraid or because there are unscrupulous organizations out there. There are so many more good then bad people that are really trying to help. I probably give more money to causes then most (all animal ones) & I know 90% of the time exactly where my money is being spent. Don’t stop giving :)

  • GGGates

    If you’re nervous about giving money to a huge charity, give locally. I know in my area (Los Angeles) there are sooo many organizations that I can donate to, & I know where my money is going. Also, check out CharityNavigator.org & see how each charity spends their money.
    Please do not spot giving to causes because you’re afraid or because there are unscrupulous organizations out there. There are so many more good then bad people that are really trying to help. I probably give more money to causes then most (all animal ones) & I know 90% of the time exactly where my money is being spent. Don’t stop giving :)

  • GGGates

    If you’re nervous about giving money to a huge charity, give locally. I know in my area (Los Angeles) there are sooo many organizations that I can donate to, & I know where my money is going. Also, check out CharityNavigator.org & see how each charity spends their money.
    Please do not spot giving to causes because you’re afraid or because there are unscrupulous organizations out there. There are so many more good then bad people that are really trying to help. I probably give more money to causes then most (all animal ones) & I know 90% of the time exactly where my money is being spent. Don’t stop giving :)

  • http://pulse.yahoo.com/_2IGVKWB4TSEYGRHA2AZ7HYYWRQ Andrew

    James, thank you for elucidating and connecting the dots on some of what I’ve been thinking/feeling regarding charitable giving. Curious as to your thoughts on microfinance; obviously there are varying levels of effectiveness, but more of an overall weigh-in on the concept itself would be appreciated.

  • http://profiles.google.com/bsaunders Barbara Saunders

    I think several distinct issues are mixed here: Many charities, (maybe) particularly large ones, are wasteful or corrupt. So are many for-profit organizations. “Administrative expenses” is not the issue, though. As @8471b1362c0a5d141bfdfdad14db038d:disqus says, charities need to spend the same money as any other business on pencils and on competent staff people who need to make a living. And I disagree that we don’t need large charities, just as I disagree with some of my hippie friends who believe we don’t need large corporations: I don’t want to and am not capable of – say – counseling addicts for no money. Charities are a mechanism for getting that kind of thing done. I don’t think Mom and Pop can generate suites of computer products. Big companies, be that Apple or Microsoft or whomever are the right entities for the job.

  • Jackiestevens1

    I don’t think Bill Gates and Warren Buffett have demonstrated a profound understanding of charity.
    First of all, you would think Buffett would have his own opinions, instead of latching on to Bill Gates’ causes. The B & M Gates Foundation sponsored one of the most implausible charities I have ever heard of–giving laptops to kids in Third World countries. Environmental issues should drive charity since destruction of the planet will result in widespread misery from food shortages, violent weather, drought, etc. Gates and Buffett don’t seem to make the environment any kind of priority, therefore to suggest they are skilled at charity is questionable. They were skilled at making money.

  • http://pulse.yahoo.com/_3SBLZEVX3T5Q7EMD6QMWAOYLY4 fear_the_euro

    I prefer to give direct aid to people who I know, and forget the tax deduction.  Organizations have ways of raising money that individuals do not. 

  • http://pulse.yahoo.com/_3SBLZEVX3T5Q7EMD6QMWAOYLY4 fear_the_euro

    I prefer to give direct aid to people who I know who are having a hard time, like paying my cousin’s utility bill when she’s out of work.  I won’t do it forever, nor  do I expect toget the money back.

    • sathya

      yes..thats nice and practical …

  • Anonymous

    I don’t get putting money in a jar in a business so that ostensibly  the money  will be donated  to a charity in the name of that business. I’m the one who gave the money, the business merely provided the jar ( and the jar stays for another charity – low overhead to be sure,  but still I’m the one giving!).

     No I’d rather buy something and let the dollar work its magic via the multiplier effect.

  • Arthi

    http://chennaikaran.blogspot.com/2011/06/philantropy.html
    Charity does not have to be materialistic. 

  • http://www.facebook.com/profile.php?id=100000904061083 Bob Keith

    When I worked at the Walmart Distribution Center, one day we were all given paperwork to fill out regarding how much we wanted to donate (out of our checks) to the United Way. Now I don’t like United Way for some specific reasons, but my main problem was being asked how much I was going to donate, and not IF I wanted to donate. I put down $0. I was called to the office the next day. I was told that Walmart needed to get 100% compliance. I said “no”.  I was cajoled, and then bullied, and then sent on my way. Was called into the office again the next day. I said “no”. They said they needed 100% volunteers. I told them if I was forced to volunteer, then it was no longer “volunteering.”  I started to get so behind on my work that I finally donated $1. I should have donated $.01, which would have cost them more money to process than they actually got out of it.

    Other than Compassion International, I have found most charities to be quite wasteful. I, too, will instead hire people to do things for me that I could actually do for myself. I don’t want to just give handouts, and many people are insulted by that anyway. I think working for money gives people a lot of satisfaction and I think people are usually more careful with their dough when they’ve earned it. I had one lady “refine” my horse. It wasn’t really necessary, but she had no electricity in this boiling hot weather so I paid her to do that. She actually did improve my horse… and she got A/C. 

    Sometimes if I see a need I will go buy something new, take all the packaging away, grab a few used items I have lying around, and say, “I’m going through my storage and I’m trying to clear it out, do you need any of this stuff before I take it to the thrift shop?” People will be “helping” me by taking it off my hands, and it beats embarrassing them by saying, “I see your ________ is broken so I bought you one.”

    Or you can have a garage sale, and tell your neighbor he can have first dibs the day before. Put really cheap prices, beforehand, on stuff you know the need, and they’ll feel like they hit the jackpot. That way it’s not a “handout”.

    Get creative!  To heck with the corporations.

    • Anon

      I totally agree with this!

      When the guy asks for a fish, it’s better to teach him how to fish, and not to just give him a fish.

      I’ve always wondered why all the factories are located in Asian… so we’re making the Asians work under horrible conditions for their money, but we’re just going to give the Africans handouts?

    • Chiara Searle

      There are many great charities, such as Compassion International, which do great work. It’s just a matter of finding some that have a simple and achievable go

  • Anonymous

    Your argumentation is full of holes and sometimes even wrong in so many ways.

    Bill Gates does good at charity ? Then give him your $10k and let him save lives that you decided you don’t care about. In no way it means one shouldn’t give to charity.

    High unemployment ? You spend $1 in a deli, and there is a decent chance that it is spent on goods built by the Chinese (and then mostly benefits China), or worse, the dollar will be saved by your deli owner and sent to his home country, wherever it is. Give to charity and give it to locals who spend locally… if they can.

    Charities spend 30% in marketing. So what ? You’ve been in business. 0 marketing = 0 sale = 0 money = nothing done. What do you suggest ? Give only 70c and tell them to stop marketing ? Then they are out of business in 18 months and your 70c are worthless. Bravo genius.
    Exact same goes for administrative overhead. 10% is not a lot compared to some public companies.

    Don’t even start with unsubtle suggestions on global warming and the possibility for it to be a scam. And if anything, global warming has very very little to do with charity.

    I’ve been reading a couple of your articles, and was even considering the books. With this post you just proved that you’re the real scam artist here :)

    • Mary Kilderry

      Split an Estate with a charity and then come back and tell us how charitable they are. I guarantee you the ruthless greed their lawyers display will sicken you as much as it has me. You have no idea the lengths they will go to to drag the administration of a simple Estate out for years, iften bankrupting other beneficiaries in the process, over the most trivial issues.

  • Sally

    I agree so whole heartedly with you.  My mother dies of cancer (young) so I have great sympathy with those affected by cancer  but…I have never donated to the big charities.  Some of the things i have done is to support a hairdresser who gave her time to fit proper, beautiful wigs for those undergoing treatment.  Helped a family who lost their flower business whilst their young son battled cancer.  Baked cookies for the hospice, volunteered my time there and gave donations which went directly to providing art therapy to the patients.
    We don’t have a lot of money to give but I try to give in meaningful ways and often do ‘random acts of kindness’ especially to the homeless. I’m not talking a few coins of change but a wad of notes into their cold, hungry hands.  My three kids are learning to do it too.  I bought a lonely woman who had just lost her husband a puppy because she so badly wanted one for company but couldn’t afford it and all the vaccinations.
    My life is so much richer for giving on a personal level and like you say I don’t have enough to make a difference to a massive charity and all it’s slick Marketing.

  • Texas

    i follow the local micro charity idea, and you are one of the few I’ve seen who write about it.  Most people just follow the Big Charity narrative when they donate.  Our local high school kids had a big presentation on having raised 10,000. for Breast Cancer. Instead of actually HELPING SOME PEOPLE in the local community with needs, they gave it to a for-profit mega hospital who was doing cancer research.  10k would pay for their coffee pot repairs and coffee filters for a year.  What a bleeping waste, all that work, spaghetti fundraisers, pink shirts worn, door to door fundraising for really NOTHING. It’s like, people don’t want to work hard on who they give it too, despite having worked hard to raise the money.  It’s almost as if they were trying to just make themselves feel better.

    Example of variant on micro charity: I hired a handyman who I noted was getting sick in my yard, while cutting lumber.  He had a bad infection.  The money I paid him for his work paid for a doctor visit, he said later.
    Right now tradesman doing badly here, I try to hire them, LOCAL independent guys, as much as possible for tiling floors, carpet, plumbing, etc. I pay cash.

  • Puppyface Am

    People should be caring and give to charities and help the less forunate. Our world isn`t a great place because every things about them selves. We need to turn are world where every one cares about everyone I am only in 6th grade and I now alot about Charity i want to persuade people to “People should have a Duty to help the less Forunate and give to Charity.

    • VTMom5

      There are a lot of people right in your own town or state who need help. You don’t have to give to a huge nationwide organization to be a giving/serving member of society. If we all took care of ourselves, our families and our communities (keeping it local) all of our needs would be met….and when a time came where you yourself may need help, everyone would remember all you had done over the years and would be ready to pay it forward…. You do have a good point though…people are selfish, most only think about themselves…I wish that would change for future generations as well!!!! :)

  • http://jlcollinsnh.wordpress.com/2011/06/06/why-you-need-f-you-money/ Jlcollinsnh

    Charitable giving is a fine thing, but as individuals we only have one obligation to society: To make sure we, and our children, are not a burden to others.  The rest is our choice…. 

  • fookayuki

    i would encourage you to read the book, “uncharitable” by dan pallotta. it’s an easy read, just barely over 200 pages, and debunks many of your concerns. it’s also very clear you aren’t very familiar with the non-profit sector, and I find it a bit alarming that you would deign to give counsel about this sector with such limited knowledge. there are positives and negatives giving to all sizes of charities – including huge ones. i personally have only worked for very tiny nonprofits, and yes any money given to us – even $5-10 makes a huge difference… but when it comes to things like major disasters, it’s sometimes better to give to those giant organizations like red cross because although not 100% of your money goes to services, they are able to take your dollar and stretch it further than any other org because of the scale of their work.

    • Clifford Olsen

      Yes, scale is the key and the structure of these organizations is established and effective but I’m starting to see the thrust of his argument as a type of rant against any organization and divisive for the sake of a self serving agenda. Which unfortunately makes it quite attractive and palatable for a self serving populace.

  • Seth D

    There are some issues with this post, although I agree with much of it. One thing your post neglects is the fact that many people would rather receive help anonymously through a charity, and thereby retain their dignity. Accepting charity directly from another individual can be very difficult, (especially when you know them personally), and most people would not accept such charity, in spite of the fact that they really need help. Also, most of us don’t have the time to sit around thinking of people who are incredibly disadvantaged, who may be in desperate need of help. This is not an excuse, (as most of us should still be striving to find ways to help others), but the day to day grind of work and the constant cares and worries of life make ‘micro-giving’ fairly impracticable, on a practical level.

    As for the comments that advocate “charity through selfishness”, (i.e., giving by buying things), that is incredibly disingenuous. To claim that your ‘multiplier effect’ is better than giving to your fellowman is another sign of the selfishness that has won the day in our society. There are crap charities and there are good charities, and we shouldn’t throw out the baby with the bath water. It’s incumbent upon you to research and make sure that the charities you give to are responsible with your donations.

    One last point – despite all of the media hype that micro-finance has received, it is largely overblown, and is NOT profitable for 99% of investors. It might still be a good charitable cause, but it is not going to save the developing world. On that note, we need to keep our definition of ‘charity’ in perspective. I find it ironic when people project great love on those farthest from themselves, (i.e., those in Africa, Haiti, etc.), but then express disgust for US families with 5 children who are struggling to get by, (e.g., “why do they keep having kids if they can’t take care of them?” or “Don’t they know how birth control works?”).

    I grew up in a poor family with 11 children, and we were frequently in need of material assistance. We experienced the judgmental charity of many people, (people who want to feel like they are doing a good thing, even though they couldn’t care less about you), and we experienced true charity from others, and the difference was stark. If you want to be an effective charitable giver make sure you check your judgmental attitude at the door. I can assure you that none of the people you’re giving to consciously decided to be on the receiving end of your charity. They would much rather take care of themselves, but for one reason or another are unable to do so presently.

    • Fish Jones

      In Africa, it’s *everyone* that has problems with no birth control (Thanks Vatican), and Haiti got hit with an earthquake.

      In the US, you don’t have that excuse. An African woman with 9 kids is oppressed. An American woman with 9 kids needs to really think about what the heck she did with her life.

    • Clifford Olsen

      Re;”giving by Buying”…Disingenuous doesn’t begin to describe that statement. I think at best its a type of commercial propaganda and at worst an indication of narcissism which may truly be the case here. Giving anonymously to a charity doesn’t have quite the sense of self aggrandizement some desire.

  • Rich McClurg

    WOW, you are what’s wrong with America today… me me me me! Have you ever had someone in your family who had Cancer or Alzheimer’s? I bet not. Both of these charties do great work to support the indivduals with Cancer and Alzheimer’s plus their families. They both provide support group at no charge! Alzheimer’s Associations goes out into the community and provides FREE training to Nursing Home for staff to understand and deal with the elderly with Alzheimer’s. Yes they have administrative staff and expense but both charites run very tight budgets and an eye on every penny.
    I have family members who have both ( Cancer & Alzheimer’s)

  • Derek Spencer

    Most people don’t donate because they are cheap bastard. They only care about themselves and they make up excuses to justify not donating.

    • Clifford Olsen

      Absolutely. The benefits from giving are of course offset by administrative costs and organizations need to be accountable but millions in aid are accrued 1 dollar at a time. To dissuade people from giving charitably unless they have a direct involvement in the person involved only exacerbates the inequity and unbalanced resources available to tghe third world. How is my giving a dollar on the street to a bum going to help the child who has fallen into a fire and has his chin fused to his chest by third degree burns? How is my providing Cheerios to the little kid down the block going to help a child in Africa who doesn’t even have clean water to wet his mouth?
      And as far as the Gates and their giving you are obviously ignorant of the far sighted and concerted efforts to create infrastructure, institutions, hospitals and education throughout these impoverished areas not just a band aid. If you would be stingy by all means feel free but don’t discourage others because you need a pat on the back every time you hand a guy a buck.

  • JRHarwood

    How do you feel about donating for mission work?

  • Alex Bilb

    all of us have the opportunity to make the difference in the life of someone… to many sites are now over internet crying for help… for individuals and not for fund raisers… only search for online beg lists and read each case… may be a lot of them are waiting for a little help that cannot find at the charity organisms…

  • Eric Knee

    I like your points about helping out locally first. I think that is very important. However, I think you should try to do both if you can. Like you said, for every dollar donated to cancer, a large portion goes to administration of the fund. That means they need that many more dollars to get to the end my friend. If everyone were to give a dollar when they could, it could really make a difference in our future. 100 million people giving a dollar means a lot of research dollars no matter how much goes to keeping the fund going. I agree that people should definitely research and believe in a charity before spending money to make themselves feel good. Spending money without knowing your money is doing good, is not really charity, no matter who you made the check out to.

  • Kellie

    I realize this is 2 yrs old, but great post. I just came from a blog where a lovely woman and 15 lovely commenters talked about how much they love animals and how happy they are to give small monthly donations to the Humane Society of United States. I checked them on Charity Watch and they earned a D, including $48 out of every $100 donations being spent on fundraising! Wow!
    Much better ways to help animals than that. The good intentions were real but the trust of all these lovely people was misplaced, and the $ were misspent.

  • Sophie

    There already is a cure…it’s called CANNABIS oil no jokes.

  • Mazarine

    Charities are definitely businesses.

    I’ve spent much of my life fundraising for charities, and written a book about fundraising, so of course, I have an opinion about this. I am one of those “overhead” and ‘marketing’ costs at charities.

    I have worked at corrupt charities. And the bosses got caught. Even though they didn’t get put in jail, they were fired.

    Here’s the issue with not giving to charity. Just because one or two are bad eggs doesn’t mean they all are.

    Just because you don’t like them spending money on advertising doesn’t mean they don’t need to do it. They have to compete for attention with everything else competing for your attention. if you don’t advertise your nonprofit, you don’t get the money to do the work.

    The work: The government is stepping away from providing basic services. This means that instead of having government heating assistance, government rent assistance, government education assistance, governments are now passing this responsibility on to nonprofits.

    This means that should you, god forbid, ever have to get any of these services when you get older, you will be depending on a nonprofit. Like millions of others without a safety net.

    We need to care how nonprofits do the work. How they provide services. Because we need to care about how the poorest in our society live. Because deeply unequal societies bring everyone’s standard of living down.

    http://www.equalitytrust.org.uk/resource/the-spirit-level

  • Amie Williams

    I agree!! Doing your homework on any charity group is the best idea. I think giving one’s time is even better. Finding a personal passion is the best advice. And then, take time to get out within the community and make a difference. Although our tax
    money is going to chartable allocations; I don’t believe in depending on the
    government or billionaires to balance the gap in need within our communities. It’s
    important to educateourselves and remain involved. Maybe we should dive deep
    within our life’s priorities to assume responsibility for our towns/cities, and
    what we want them to be. It’s not up to government. Getting involved can
    alleviate this problem.
    -Amie

  • Mark
  • Patrick Kelly

    James, I’m curious of your thoughts on this. It is a 15 minute talk. Does this change your perspective at all?
    http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html

  • teeth implants

    here is a feel good little micro cause that can put a smile on someones face – literally!

    http://www.youcaring.com/medical-fundraiser/my-dads-teeth-implants/64345

  • Verla Hatcher
  • Matthew

    This article overlooks the fact that most medical charities are outlets of major pharmaceutical companies, who use the donations for research they will overcharge you with. So it really is a gift to a company that has the money to do it anyway – it just wants to make more money.

    Cancer research has been going on for 50 years without a major breakthrough. Death rates for most cancers are the same. I’m also for efficiency – what is the most bang for your buck? What helps people and the planet the most?

  • Jennifer

    Hi there, I came across this blog and felt compelled to respond. Often it is easy to make blanket statements, but just like you can’t stereotype people (there are A LOT of surprises out there!), you can’t throw every large charity into the same basket. Before I go any further, I must disclose that I am a non-profit executive. I head up a local affiliate of one of the largest non-profits in the country. I work 60-80 hours a week because I KNOW that we make a difference in the lives of people facing this disease. I also know that we have 4-star charity rating to back it up, AND I have the background, education, and knowledge of solid program development, program evaluation, and program management. I deal with a lot of very small organizations that apply for grants. Often they talk a great game, and they seem like they are making a huge difference. What I see however, is that without the background in non-profit leadership decisions are made that waste resources. Case and point, a very charismatic head of a very small non-profit has been advocating for a mobile mammography van to go to a homeless shelter. She says there’s a huge need, what she neglected to observe is that there is a mobile mammography unit that regularly goes to the health department 8 blocks away. Paying for a bus ticket or cab would be much cheaper than having the unit come to them! When I started my career I had the distinct honor of working for a CEO who use to say, “these people who are doing ‘God’s work’ often aren’t making anything better, they feed children dinner Monday through Friday, but don’t think about what they will eat Saturday and Sunday?!” I continue to maintain the best leadership has the head of a business and the heart of a non-profit. Before you decide not to fund something, call them, get to know them, ask questions–many charities will spout rhetoric, but try to get beyond that and hear about the work and listen for the passion. Large isn’t necessarily bad, think about it- if the charity is doing great things, they can do even more with more money. I KNOW we are effective with the resources we have, and I look forward to the day when I have even more resources to reach more people and have an even larger impact. Thanks for your consideration and for reading this!

  • beccah

    alex at least has a cause and intends to help

  • luxjewelerious

    I have a personal donation going is called fighting ms the modern way http://www.gofundme.com/Fight-MS-the-modern-way this is very dear to my heart because it’s my own struggle. It’s not a business it’s a fight to help me keep on going and working and supporting my three children I hope this changes the minds of some. You see every dollar counts! At least to me anyway!

  • Alice R

    I think this article voices the concerns of thousands of people. We want to do good, but throwing money at any which charity just doesn’t seem to be an effective strategy. We want to be altruists, but how can we be effective? There is a movement for people who feel this way: Effective Altruism. Charity evaluation is a fast-growing field with researchers, academics and other professionals working on the question: if I want to do as much good as possible with my resources, what should I do? I do take issue with several points in this article however, which seem to be perpetuating myths. First off, the size of a charity does not necessarily relate to its effectiveness. Secondly, administrative costs are not a good way to judge charity effectiveness – things like, testing to see if an intervention actually works will count as admin costs, and this is essential to effectiveness. Thirdly, if you are worried about fraud, why not give to a charity that has been thoroughly vetted by experts (GiveWell seems to be the best organisation doing this kind of work). Fourthly, if you look at the statistics, governments aren’t giving all that much in overseas aid. The US government gives 0.19% of GDP – so suppose you paid $5000 in tax last year, you effectively donated $10 through your taxes, which I’m sure you’ll agree is hardly generous. If you’re serious about wanting to do good effectively, I urge you to check out GiveWell and Effective Altruism (Google it) to learn more about the rational, scientific approach to charity.

  • Chiara Searle

    There are a ton of great charities worth donating to, it’s just a matter of finding one to support that spends the donations it receives properly (so at least 80% or more is going directly to the people who need it) and that has a simple and achievable goal.
    I suggest checking out some top-rated charities at charitynavigator.org or guidestar.org – they tell you exactly what percentage of donations each charity receives go where so you can make an informed choice.

  • Jose

    You are a fucking fool

  • Naushaba

    when someone in financial crisis ask her how she is facing and what is her mental condition?you are in comfort position so you guys can easily write whatever you feel..most of the time the result is “Zero”.when I am reading this I laugh because I know what’s happening.

  • Mary Kilderry

    I 100% agree with point 7 of your article. I always advise my clients now against ever making a Bequest to a big charitable organisation, not unless they want their relatives, other beneficiaries and Executor/s treated like dirt and taken to the cleaners both financially and psychologically by the expensive high end legal teams that charities use to pursue every last cent they can squeeze out of an Estate. I have pretty much never had one Big Charity express either gratitude or appreciation when calling to tell them of a bequest, even when I called six well known charities recently that they had each been ‘gifted’ $2m each. Recently I had a charity tell me they were considering suing the Executor, a frail 85 year old man for negligence because he supposedly sold the shares in an Estate at the ‘wrong’ time. They then used that threat to prevent him receiving any commission as Executor, to which he was fully entitled for all his work administering his brother’s Estate – this represented @ $50k after they had been gifted nearly $8mil from the man’s brother’s Estate. I have numerous appalling stories of the rapacious greed of big charities and cannot be more adamant that you should NEVER make a Bequest to any of them. You might as well give the money to the Government or a Big Company for all the good you will do. Find an individual in your life who would benefit from your ‘gift’ and who deserves it and give your money directly.

  • el

    is tax deduction the main reason people in america do charities?

  • Mheart12345

    I hear the fish analogy all the time, but you have to teach the man how to fish, then how to clean the fish, then how to sell the fish, he has to have a fishing pole and bait to catch the fish and insurance so when some law suit happy clown claims that he stepped on one of your rusty hooks and will loose his leg unless he gets a million buck, and that all takes money to make happen. As far as administrative overhead you find me any fortune 1000 company that only has a 10% overhead. You talk about welfare for charities coming from Uncle Sam and though some charities take on and have contracts to do various jobs and services that is no different than you bidding and getting a contact with the government. I have 30 women and their kids all have been homeless because of abuse or just dad plain ole run out on them. I make 19,000.00 bucks a year, uncle sam get about 5 grand of that, my health and car insurance get about 4 grand of that so for 10 grand a year I bust my ass to get the families back on their feet and let me tell you this we know how to make a dollar go far and then some…So before you go and try and justify why you to selfish to help why don’t you come and take you head out of your ass and see what some of these charities really do and the postive impact they have on everybody.

  • Bob

    I found this hilarious. Is this kid serious? http://igg.me/p/755280/x/7143378

  • moya

    Hi James. really liked your article. Just wanted to say that I wholly agree with you that most of your donations go on keeping people in jobs and on admin costs. I have always thought that if you really want to help do something your self or give to a group or small volunteer organisation so you know that 100% goes directly to the cause. I have always been a keen supported of animal rights and have been horrified by the profits made of such large organisations such as the RSPCA and IFAW etc. I have been a lifetime doner to these groups until a few years ago. I now donate and volunteer to a small animal rescue group who use every cent they get or fund raise to go to the vet bills for the animals.

  • Jules

    Hello Everyone,

    I am helping a friend of mine raise some money to pay bills after a long period of no work. He made a blog, please stop by and help out a bit. Every little bit counts.

    Thanks Everyone..

    Here is his blog: http://donatemoney-helpsomeone.blogspot.com/

  • Kiplin

    People love the idea of volunteering to help in Africa for a month but guess what Africa has in abundance? PEOPLE… They don’t need people that can pickup bricks, they need architects, engineers, and other PROFESSIONALS that can guide the local labor.

    A girl that wants to add “Volunteering in India or Africa” to her transcripts is worthless to the Red Cross… What is she going to do? Expose the people in need to Justin Bieber? She can hand out food and medical supplies, but can she sucher wounds and diagnose disnetary or know what medications to try when an infection is proving to be antibiotic resistant? Can she draw up blueprints on who to build quick shelters so people don’t die of exposure?

    The only groups looking for unskilled people to travel to other countries are theistic groups looking to hand out Bibles and the Book of Mormon to the poor.

  • Michel
  • Marcey

    Avoid donating money to large charities and stick with small local charities that positively impact your community. Donate clothes to a local women’s shelter, volunteer your time to walk dogs at your local animal shelter, offer a listening ear and a sandwich to someone living on the street. Put your hard-earned dollars and time into groups that create positive change in the community you live in, rather than giving money to large charities that pay their CEOs hundreds of thousands of dollars each year. :)

  • .

    Yeah lots of fraud.

  • Anonymous

    Author has stayed away from far more controversial reasons to not contribute to charity – one of which is that certain mega charity organizations such as World Vision, have a budget more than the budget available with the governments of dozens of third world countries in Asia and Africa. Some of the popular charities here are accused of forcibly converting people’s faith in exchange for food and other necessities. While some Americans wont mind this, but it is unethical if the donor is not aware of the religious overtones of the charity, which otherwise appear secular in our own country.

  • fi

    All charities will have some overheads, not donating because of these is a cop out and uncaring. 70c out of a dollar could be the difference between life and death to a starving child. If the overheads go towards getting more people donating, then that has to be beneficial for the recipients. Wateraid is a good charity that gets 3rd world communities sustaining themselves improving water and sanitation so that they don’t have to continue relying on charity.

  • Lentex

    Try donating to your (a) church. They support orphanages, hospitals for the poor, food banks and missionaries that provide fresh water, ways for indigent people to learn to support themselves with what they have; ie: weaving baskets to sell, packaging coffee, sewing small gifts etc. Churches also care for the poor in our comunities. If they need health aid (crutches, wheelchairs, braces etc.) the church will furnish them. The list goes on and on. The best thing you get out of that is GOD’s blessings.

  • Nadia Radzyminski

    I DO NOT believe in the concept of CHARITY.

    FUCK CHARITY.

    In America, Wealthy People create non-profit organizations that DO NOT have to declare income above the minimum of 10% of all of the money that a charity has earned in a given TAX YEAR.

    I DO NOT give money to ANY CHARITY.

  • Nadia Radzyminski

    I do not believe in sad or happy social causes that steal money from people who are NAIVE.

    Organizations such as “The Salvation Army” or Bob Geldof’s AIDS cause are a Scam.

    Save your money and NEVER give it to a charity. EVER.

  • Nadia Radzyminski

    Anyone who is gullible enough to be convinced that giving money to Non-Profit Charity is simply a FOOL.

  • Nadia Radzyminski

    Organizations such as The United Way, The Salvation Army, or even Goodwill have huge budgets that allocate millions of dollars of profit for the people that hold positions of Authority in many Charity Funded Organizations.
    I do not Respect charity at all.

  • Charity

    For years I gave to ‘large charities’ – but once they got my number (literally) they began to call in between campaigns asking if I wanted to make additional donations and (this get’s me) include them in my Will (seriously?). When someone form the American Cancer Society became annoyed and abruptly hung up on me (because I told them I had just donated at work for the same Breast Cancer Campaign – and it wasn’t chicken feed either), I started to take a deeper look and do some internet research. At the same time there were articles in my town newspaper about local families, neighbors, that were going through tough financial times. So I started to be a Microcharity (who knew?), and funnel my charitable dollars to a family who’s son had brain cancer, another one who came back from Afghanistan an amputee and finally I looked even closer and saw that a good friend of mine was struggling because her husband had cancer. I agree 100% with your comments, in fact if I was a writer, I could have written your article myself. We are really funding charities that say they are looking for a ‘cure’ but in reality, we are funding treatment for the disease which has become ‘big business’ and sometimes that treatment is so expensive those that truly need it can’t afford it – how ironic. When are we truly – as a society – going to start putting that same power behind really finding a cure and not the next pill to dispense after the fact.

  • umblondie

    I didn’t know it had the name microcharity, bit its fun to give directly to someone who has a need. Also, I love to volunteer my time, and I always get back way more in joy than I ever give. :)