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

Written by ameliath



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