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Choosing Charities

By Larry Fine

Giving money to the poor has been a Jewish trait for centuries to the point that if someone refuses to give any money to anyone we suspect that he is not Jewish. Together with the Jewish tradition of giving money has come a new phenomena; the top heavy charity organization.

Originally giving money to charity really meant helping out poor and needy people. The poor would either come to homes to request money or sit in streets begging for alms. A person who was scrupulous would separate a tenth of his money and give it to poor people. Even better, he would look for those who were experiencing difficulty and pass the money to them in a manner in which they did not know from where the money came.

Today there are very few genuine poor people, meaning that they do not have enough money for even two meals, instead we have people who are relative poor. They are people who live below the recognized standard of living.

Do we have an obligation to help them? Definitely! We are instructed to extend our hand to the poor and downtrodden Jews, and also to help gentiles in order to promote peace.

Things have changed. There is today the concept of a professional money raiser which has become a reality in our time. Jewish schools and 'help' institutions that provide food and clothing for needy Jews employ professional money raisers and administrators who, while raise much money, take for themselves quite a large slice of the money that is raised.

When I donate my money to an organization, I want the largest percentage possible to go to the charity, not to support the workers who do the administrative work. I assume that you feel like-wise.

What happens with the money that you donate to a Jewish cause? How can you tell if the institution is honest and the money is well spent?

I went on the Internet and looked up several interesting sites to see what is necessary to become a bona fide non-profit in the eyes of the U.S. Government. Surprisingly, a bona fide non-profit is not a organization that gives all of the money collected to those for whom the organization is set up to serve, rather just the opposite, the organization is generally a self serving device to generate large salaries to those who run such institutions. When the U.S. Government (and all others, also) give an institution a non-profit status, this only insures two things. One, that they have certain tax requirements and two, that they can give receipts that you can use to deduct from you income taxes. It does not at all insure that the organization is honest or actually does what they tell you that they do!

According to the data that I dug up on the Web, the average wage earner takes home about $60,000 a year. The wages of administrators of charities was generally much above that, although there were several noticeable exceptions. The following was a small table that I compiled based on public information that I got on www.charitynavigator.org which is based on information from the 2004 tax return.

Below is a sampling of several of the many organizations that you can find at this web site:

I found this sampling interesting and I urge you to consider it. First note that in most cases the head of the organization is getting a large income. Secondly it is important to note that percentage of the chief administrator's salary in relation to the charity's income be small, considering that his salary does not include other expenses such as an office staff, rental and other expenses.

Also interesting was Hineni which split up the earnings between the Rebbetzin, her husband and her son, which came out to a large $350,000 dollars and an even larger 16% percentage of the total earnings. I do not want to detract from the good work that is done, but the point is that when so much money is siphoned off for administration costs, perhaps your charity dollar will get a better run for its money somewhere else. When you donate money, you want to help the poor not the rich!

When donating money to a charity what should you look for?

First and foremost try to find some one who needs help. Organizations may do great work at convincing you that they do great work, but many plain people are still suffering with no big organization to back them up.

Is the organization slick? You do not want your charity dollar to go to a top heavy organization; you want it to go to a person who is suffering. When pressed by a slick selling organization representative who has been trained in extracting your money from you, tell them that you are interested but you want to consider before you sign over a large sum. Do not give on a basis of a great speech, investigate the organization first. Are they efficient in doing what they do?

If you are only giving a dollar, it is not worth your time to make a grand investigation, but if you are considering a large chunk of money, then it is worth contacting the institution directly and asking some tough questions. How big is their budget, how many people on the payroll, what the salaries are, and how much is going to the purpose for which the charity is set up? If their answer are wishy-washy, then put your money some where else. Know that charities are required by law to provide copies of their three most recent filings to anyone making a request in person or in writing.

Know also that the people who come to you and are raising money for the organization (the actual fund raiser as opposed to the administrator) are taking anywhere between 25% and 85% before it even gets into the organization! When you decide that this is the charity that you want to support, then cut out the middleman fees and send them a check directly.

According to Charity Navigator, the average CEO's compensation is roughly $140,000. When you find the administrator's salary is large, think: do you really want to help this fellow buy a new BMV or is your purpose to help some needy family.

Not all who collect for charities are collecting for the charities. In many cases people represent themselves as agents for a particular charity. I had a case when I was approached by a person purporting to collect for an organization that helps poor people. I had my wife call them up and tell them that she was needy and could they help her? They replied that they only help out members of their family!!

The famed non-profit status 501(c) (3) does not guarantee that the organization is straight. The 501(c)(3) only allows them to give you a tax receipt. Granted that is this day and age, it is important to get a tax credit, but remember here you are trying to help some one else, not just yourself. It cost about $1000 to get the 501(c)(3) status. The government is very lenient in giving it out and therefore it does not imply a 'straight' organization.

When investigation large charity organizations, I recommend the following:

Reference guides for you to use: http://www.guidestar.org/ has a simple search for users who want to verify a nonprofit's legitimacy, learn whether a contribution will be tax deductible, view a nonprofit's recent Forms 990, or find out more about its mission, programs, and finances. GuideStar Basic is available at no charge to users.

www.charitynavigator.org helps charitable givers make intelligent giving decisions by providing information on over five thousand charities and by evaluating the financial health of each of these charities. We ensure our evaluations are widely used by making them easy to understand and available to the public free of charge.

A millionaire, Larry Stewart, who died this month (Jan 2007) would give money to people at random who he saw needed the money. I do not recommend this, there are plenty of struggling Jewish families who are sinking in debt, both in Israel and outside who would welcome your help. However you must make a move to help them.

Another wealthy man that I know set up a fund for impoverished families to help train them to have a profession that they may go out and support their families in dignity. What greater charity is this!

Not every one is capable of doing this but the idea is there. Many people take a tenth of their salaries and make it into a free loan fund which they administer. Their load fund increases with time, they loan it to needy people who repay it. They make certain that there are guarantors who guarantee that the loan is paid back.

Look around your home area. Notice the people in your synagogue; see if someone looks as if they are having difficulties. There are those who have problems with children, illnesses, etc. Generally they do not dress well, etc. Look into the matter. It may be that they are struggling with a difficult situation and they feel embarrassed about their problem which prevents them from asking for help. Try sending them an anonymous envelope with some money in it. You will most certainly help a family in need.

Most people who donate are concerned that they will get their tax contribution receipt, but perhaps something just as important, or perhaps even more important, is the mitzvah of giving. If you give to an organization and get only a tax break but no mitzvah, you are missing the essence of giving.

Know that it is a mitzvah to help a poor person, since it is written in the Torah, "You shall surely open you hand unto him." (Deut. 15:8) and "..that your brother may live with you." (Lev. 25:36) Know also that giving charity to the poor is greater than bringing sacrifices to the Temple,

Not only is it a positive mitzvah to help a poor person, but if you ignore his petition and do not help, there is a sin, "You shall not harden your heart nor shut your hand from your poor brother." (Deut. 15:7) Realize that no person ever became poor by giving charity. Just the opposite, the wealth that you possess do not really belong to you. It was given to you as a trust from G-d so that you may execute the will of G-d which is to help the poor.

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