What charities do with your money

Where is your charitable donation going?

What charities do with your money

Australians who donate to charity have a right to know where their money is going, but not many people actually do.

A recent CHOICE survey found that 81 per cent of respondents who had made charitable donations didn’t know how much of their offering went to overhead costs – and how much actually benefited a charity’s beneficiaries.

An investigation in 2013 found that some of Australia’s largest charities have been known to spend almost half their donations on fundraising, with organisations spending from five to 40 cents for every dollar on fundraising overheads.

In 2012, The Make-A-Wish Foundation of Australia received more than $12.8 million but spent $5.2 million on fundraising, marketing and communications. About 54 cents for every dollar went to granting sick children’s wishes.

In the same year, the National Heart Foundation spent $20 million on fundraising and a further $8 million on research out of its $51 million of donations.

On the flip side, global charity World Vision spent just 11 cents for every dollar, the McGrath Foundation only nine cents and the humanitarian arm of the Red Cross spent as little as four cents.

Australians are a generous people. According to CHOICE, almost nine in 10 Australians donate annually to a charity.

So, what’s the best way to donate?

It’s a fact that charities have to spend money to make money, and fundraising is an integral part of their ongoing work. There are four main methods that organisations use to raise funds:

  • direct monetary donations
  • recruiting volunteers
  • charity events: dinners, galas and balls
  • street fundraisers and telemarketers

Your choice to support one charity over another should depend on which causes matters to you most. Usually, it’s a safer bet to donate to Australian charities as it’s easier to verify their legitimacy.

To ensure your donations have the biggest effect, opt for giving directly to the charity or volunteering your time. These methods have the most direct impact on the cause, while other methods incur a lot of expenditure on overheads.

In most cases, you will be able to claim charitable donations on your tax return, as long as the charity is registered as a Deductible Gift Recipient (DGR) by the Australian Tax Office.

Find out if an organisation is a DGR with the ABN Lookup.

Read more at choice.com.au





    COMMENTS

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    Bookworm
    18th Dec 2015
    10:32am
    It infuriates me the number of "freebies" I receive throughout the year from various charities. Pens with my name engraved on them, address labels, etc. And particularly towards Christmas, sets of card and envelopes. How many of the thousands of people who receive them, actually make a donation to that charity? The cost of the items and postage would be better used for their particular cause.
    jackie
    18th Dec 2015
    10:35am
    I agree and their CEOs don't help with the salaries they give themselves.
    FrankC
    18th Dec 2015
    11:15am
    You're right, Bookworm. Every time I get these "packages" as you describe them, I think how much has all this cost, pens, printing, postage on items that are larger than the standard sized envelope. And the thing is, most people use email nowadays, like me, and therefore have little use for address labels. And even when I print out the address to businesses on envelopes, I have my name and address automatically printed in the top left corner of the envelope.
    missmarple
    18th Dec 2015
    11:36am
    I'm with you Bookworm, I shifted earlier this year and the charities followed me, showering me with all sorts of things and I have to admit I don't donate always, 1- I am a pensioner and can't afford it, 2- I'm not sure how much does get to what ever charity, it is the same with the OP shops (2-3 that I know of ) they get goods donated sell but after Admin etc get their payment how much is left
    olive
    18th Dec 2015
    11:01am
    I agree with bookworm and I just mark the envelope 'return to sender' and put it back in the post. A lot of people confuse the Lions and Rotary clubs with charities also and I would like to point out that 100% of funds raised are returned to the public. We actually pay out of own pocket for our Administration costs.
    saxon
    18th Dec 2015
    11:31am
    The older I get the more cynical I get. It began 50 years ago when I learned that the head of a major British charity had a Rolls Royce as a company car. If donators to Charities really knew where there money went they would think twice about how they donated. There is another charity in Melbourne that I visited some years ago, I thought I had walked into the Taj Mahal. It's marble lined foyer must have cost a fortune.
    Recent times have seen the rise of third parties used as fund raisers who naturally earn more the greater amount they raise. This can result in the use of pressure tactics which have been well documented especially in Britain. Once a donator has been flagged as 'generous' or unable to say no they pester them to the point of crippling their finances. Older people who may not be thinking as clearly as they once did are targeted mercilessly.
    Although not a charity Readers Digest use similar tactics and we have had to intervene with one of our relatives to prevent damage to her pension income.
    Unfortunately many charities have been turned into ruthless businesses and if people want to help the less fortunate a better way is through personal volunteering where you are in control.
    DJ
    18th Dec 2015
    11:43am
    It's hard to imagine how the Heart Foindation can justify spending $20 million on fundraising and only $8 million on research, out of $50 million collected. What did they spend the balance of $22 million on? Administration? Maybe you could request a detailed breakdown and report back to us. In the meantime I don't feel very inclined to make any further donations. Hopefully they will be able to provide a satisfactory explanation
    particolor
    18th Dec 2015
    8:29pm
    Rollers aint Cheap Ya Know !! :-)
    Young Simmo
    18th Dec 2015
    12:02pm
    What really put me off giving to Charities, was the New Years Day Tsunami. I can't remember the exact numbers but the Red Cross raised something like $2Million, and about half of it went to Red Cross Administration.
    particolor
    18th Dec 2015
    8:32pm
    And the rest built a BEEEootiful Mosque in Bandy Arhay !!
    particolor
    18th Dec 2015
    8:34pm
    Look it up on Google !! :-)
    Young Simmo
    18th Dec 2015
    11:49pm
    Yes particolor, years ago I set a rule for myself that I would only ever donate to The Surf Life Savers if the opportunity arose. As far as I know they are all volunteers and do a fabulous job.
    Radish
    19th Dec 2015
    10:29pm
    Young Simmo that tsunami fiasco was the turning point for me.

    I will only donate to charities who have little admin costs. Red Cross took a dive in their reputation over that Tsunami thing.
    Peterrj
    20th Dec 2015
    7:22am
    Young Simmo, glad to see you back on your horse.

    18th Dec 2015
    12:29pm
    Everyone with their arm outstretched and palm up - gimme, gimme, gimme. The Salvos will get my donation and the Red Cross my blood and the rest of them are S.O.L.
    particolor
    18th Dec 2015
    8:33pm
    The Salvos got Mine !! :-)
    Sundays
    18th Dec 2015
    12:40pm
    Agree if you do donate, do it directly . Those people in the streets of major cities who try and sign you up are on massive commissions!
    KSS
    18th Dec 2015
    12:51pm
    Not so much the people on the street but the companies they work for certainly take the lion's share. It was reported just recently that some of these fund raising companies only hand over 2% of monies collected to the charity they are meant to be helping. Those stopping you in the street will mostly be backpackers on a very low 'wage'.

    Like others if you want to donate, do it directly and never agree to hand over a credit card on the street!
    KSS
    18th Dec 2015
    12:52pm
    Anyone else sick of having to run the gauntlet of tin cans outside every supermarket everyday every week?
    tisme
    18th Dec 2015
    12:54pm
    i once worked for a well known charity as a volunteer , we were taught by the bosses that it was a business not a chairty yet they claimed cheep rates on thier bulidings etc
    HarrysOpinion
    18th Dec 2015
    1:52pm
    “Australia’s largest charities have been known to spend almost half their donations on fundraising, with organisations spending from five to 40 cents for every dollar on fundraising overheads”

    - By fund raising overheads I presume you mean this also includes the Charity executive’s high-income wages that pay for their high mortgages, personal investments and luxury cars.

    “So, what’s the best way to donate?”

    - Sure donate some but don’t leave huge sums of your estates in your will to Charities. It only gives the charity executives a higher income while the poor get poorer.

    “Research”

    - For all the billions of dollars that have gone in to research the productivity is very small. Business wise it makes sense, why would you declare a cure for cancer, diabetes or alzheimers if it means the end of research dollar donations and discontinuity of the Charity executive’s high income. Once there is a cure donations stop. So research by design, will not and can not produce a cure because it will be detrimental to the charities future existence but at best they will produce pain-reducing remedies of sorts and some at extremely high cost to sufferers.

    “Are the Charities there for YOU when you really need charity?”

    - Some charities are there to help YOU in a small way but some are simply “users”, “ bludgers” who jumped on the Charity wagon to benefit from the government subsidies such as GST tax exemption on purchasing motor vehicles for… mainly personal use…

    It’s also good to learn that - “On the flip side, global charity World Vision spent just 11 cents for every dollar, the McGrath Foundation only nine cents and the humanitarian arm of the Red Cross spent as little as four cents.” It’s also good to learn that finally the government has woken up itself and purged the unworthy charities or is in the process of purging.
    john
    18th Dec 2015
    2:24pm
    we are given information in abundance by, law on some products so how about charities having to display, by law, percentage break down of donations
    HOLA
    18th Dec 2015
    3:11pm
    If I get any pens or Christmas cards or labels with my name on them, I immediately send them back. Where do they get our names and addresses from?
    Adrianus
    20th Dec 2015
    1:35pm
    HOLA is that a ruse to get donations to the PO? They will try anything?
    Cooky
    18th Dec 2015
    3:52pm
    OLIVE, how are they "returned to the Public"?
    Everyone else, you might find not Very Much is received by the people that need it> the CEO's,
    ETC, of these so Called "charities", receive MOST of the donations made by US.
    Cooky
    18th Dec 2015
    3:55pm
    WE could ask "Malcolm Turnbull" our "Prime" Minister to offer our Taxes to Charities
    Cooky
    18th Dec 2015
    3:58pm
    Fast Eddie.. haven't you heard about "THE SALVOS"? They are NO better than the rest of them.
    Anonymous
    18th Dec 2015
    5:26pm
    No, I haven't heard anything bad about them, as I have about the Red Cross with cash donations, Lady Nell Seeing Eye Dogs, CARE, Cadbury, Hari Krishnas, etc, etc. I don't give a brass Razoo to any of them, but the blood I can spare.
    Cooky
    18th Dec 2015
    3:59pm
    Fast Eddie, and again, You don't know where YOUR Blood is going to either.
    meow
    19th Dec 2015
    8:41am
    pens are nothing they only cost a few cents, but recently charities have been sending waterproof bags, this really drives me mad. When i get one the whole lot goes straight back. when they send addresses I keep them for christmas cards as they are no good to anybody else and sent the rest of the package back. I am a pensioner and I do give to animal charities when I can manage it but now lots of charities demand monthly payment of anything from $25 up way out of my league!
    Radish
    19th Dec 2015
    10:27pm
    Friend was in local shopping centre...charity stall was there...offered to give them a donation...it was refused...they wanted her to sign up to give a certain amount each month.

    She put her money back in her purse and walked off and will never donate to them again.
    Peterrj
    20th Dec 2015
    7:28am
    Yes radish, I went to buy a raffle ticket from what appeared to be a charity thinking that one ticket could cost up to $5 or say 3 for $10.

    But I was gobsmacked when they were selling tickets at $20 each!!!

    Needless to say I did not buy a ticket!!

    I am now going to do voluntary charity work for St Vinnies.

    My labour will be my donation.
    Peterrj
    20th Dec 2015
    7:50am
    Peterrj
    20th Dec 2015
    7:48am
    remove reply It's a tough world out there and running a charity does cost money which we don't like to think about. Provided some of the donation goes to where it should then that's a positive. I have recently been reading about our Warnie and his charity in the News Papers and Warnie has denied the allegations made against his charity.

    But we don' like to be conned out of our money for a charity do we.

    Which reminds me of a great con job in the City of Love, Paris. The last time we were in Paris two young girls approached us with clip board and biro In hand. They asked us to sign a petition to save babies dying of hunger'. Who could resist signing the petition???

    But you just new that was a con job .... So where is the catch???

    If you wanted to sign you had to make a 5€ donation to the charity!!!!! Such fact was only revealed a millisecond before you actually put pen to paper!!!!

    Needless to say that was one charity that missed out on our donation.

    Charity??? I guess people have to make a living somehow???
    particolor
    20th Dec 2015
    12:23pm
    Give Till It Hurts !! OWCH !! :-(
    Adrianus
    20th Dec 2015
    1:55pm
    Recently I had a lady knock on the door from Red Cross. Said they were collecting so that they could by breakfast for school kids. When the kids turn up to school they get breakfast which apparently they don't get at home for whatever reason. The state school was way out of my area, but that didn't bother me.
    When I explained that I would like to help but was cash poor, the nice lady said they would accept anything, it doesn't need to be money. As I pointed to some valuable tools, which I no longer use, she could have, she immediately declined the offer. They wanted a regular monthly contribution deducted from my bank account. The Periodical Payment form was on the clip board and the pen was in my hand before I knew it:) Cash flow is the life blood of any organisation but more so for charities who give away what's left over. Or do they? Charities seem to get bigger. How do they achieve this?
    carmencita
    20th Dec 2015
    4:05pm
    Charities spend millions to make millions. How much of it really goes to recipients who are in real need not just to the lazy ones who can't be bothered to do something to help themselves. How many charities are genuinely out there to help- creating a foundation as a way tax evasion? I have witnessed quite a few recipients who seemed not to be able to extricate themselves from a kind of mental conditioning - example, 3 generations of family kept coming for emergency relief regularly- that is grandmother, daughter and granddaughter.
    Young Simmo
    20th Dec 2015
    4:26pm
    OK my problem is slightly different to everybody else. For the last 40 or so years I have been buying lotto tickets every week and can not stop. They are essential to my well being, and I can not afford them any more. Does anybody know of a charity that will buy my weekly dose of tickets to save my mentality?.
    Peterrj
    20th Dec 2015
    5:13pm
    Sorry Young Simmo I can't think of such a charity. However you do have a gimmick that others don't.

    Street beggars in Europe all have a mandatory animal such as a cat, dog, bird, rat or even a rabbit.

    I was thinking that you could make a claim for a street corner in Paris and sit your horse down beside you for the day. I am sure you would make a motza. Hence, you could then afford to buy the mandatory Lotto tickets and maintain your mentality!

    When you win Lotto can I get a cut of the action!
    Young Simmo
    20th Dec 2015
    6:05pm
    Yes Peterrj, you just have to wait till after I make a major decision, do I buy my wife a new broom or new rake for Xmas. I have to have my priorities in order.
    Peterrj
    20th Dec 2015
    10:03pm
    Mate, I am not going to be drawn into that decision!!!!
    PlanB
    21st Dec 2015
    9:26am
    After donating to Oxfam with what I could afford, some months later I was rung and asked for more, I told them in no uncertain terms to be thankful as I gave what I could and to take me OFF their list as next time I would donate one on one.
    I also got Xmas cards sent from a site for people with no arms, I do not send cards and I sent them back and told them not to try and guilt me into things. I also send all thing like that back as it makes me sick that they use this sort of thing,

    Also when I donate I do not need to be able to WIN things I say put that money into the charity
    PlanB
    21st Dec 2015
    9:31am
    Also if you do sign up for a raffle as my friend did they pester you all the time because they have your details.

    Another Friend used yo give $50 a month and then they rang and asked her for more as it was not enough !!!!!!
    maxchugg
    21st Dec 2015
    12:08pm
    I am fed up with phone calls wanting me to buy raffle tickets to such an extent that as soon as a charity identifies itself over the phone, my first response is "You're selling raffle tickets - right?"
    Next I tell them that because of the number of phone calls I get, as a pensioner I can't support them all, so I treat them all equally and support none. (Not strictly true, I do provide some direct support, which is none of their business).
    I understand that currently there are around 60,000 registered charities in Australia, which is clearly ridiculously excessive and unsustainable. And, make a single donation to any of them and you are swamped with begging letters for the rest of your life.
    PlanB
    21st Dec 2015
    12:24pm
    Yes Max same here, NOT interested --if I can afford to and can give directly and know that the charity is getting it, all yes I will gladly give what I can

    6th Jan 2016
    6:02pm
    If there ever was any organization that needs to be more than accountable with its finances, it would be the charities. Businesses have to be accountable with their shareholders, but they provide a product to their customers and that it pretty much it. Charities have to worry about all these people who have given them money for nothing in exchange save for good feeling, of course they must be more vigilant about how it is used!


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