One of the valuable lessons I have learned from serving on
the Board of Never Had a Bad Day is that not all charities are alike. Like any
organization, charities can be well-managed or mismanaged and either fulfill or
fail at their mission. Unfortunately, sometimes what you see in a charity's tear-inducing appeals or slick website is in contradiction with how donations are actually spent.
The Humane Society of
the United States – A Case Study for Donor Caution
Robin and I love animals. Whether cats or cockatoos we’re
always eager to donate a few dollars or lend a hand when it comes to abandoned,
abused or neglected pets.
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| Kennedy the cat and Zazu, feathered head of the Holmer household. |
We recently viewed a heart-wrenching Humane Society of the United States (HSUS) ad that featured rescuers wearing HSUS t-shirts and jackets carrying shivering dogs and cats off to safety. We were moved by the images of helpless animals and were ready to pledge our financial support so that the organization might continue this type of work.
Having been educated by my service on the Board of Never Had
a Bad Day, I decided to do a quick search of the Humane Society of the United
States. My starting point for researching
any charity is Charity Navigator, one of the most well-respected rating and
review organizations for individual charitable giving.
Just this year Charity Navigator downgraded the Humane
Society of the United States to two out of four stars with the lowest rating of
one star given for its finances. Charity Navigator’s analysis reveals that only
69.5% of all HSUS funds go to program expenses and fully 27.4% of all revenue
goes to fundraising.
What I learned from other sources was even more
disheartening. According to Humane Watch[1]
and the HSUS IRS 990 submissions, less than 3% of all Humane Society revenue is
granted directly to local animal protection and shelter activity. This seems
inconsistent to some with their fundraising efforts which feature dogs and cats
as the primary beneficiaries of their efforts.[2] To offer some perspective, the direct grants
to local animal shelters is apparently less than the organization reported on
Form 990, Schedule C, for Political Campaign and Lobbying Activities in 2017.[3]
By way of comparison, Chicago’s no-kill shelter
organization, PAWS Chicago, has a top Four-Star Rating with Charity Navigator.[4] Over 89.4% of all PAWS revenue goes to
program use and only 4.7% of revenue is spent on fundraising. Can you imagine
the number of animals that might be saved if donations meant to support local
animal shelters was re-directed from the Humane Society to PAWS Chicago?
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| Local organizations, like PAWS, offer you the opportunity to see your charity dollars at work. |
So the question is, when it comes to charities and donations, whom can you trust?
When looking to support a worthy cause, I think one should focus on
the consistency between a charity’s fund-raising and actions, financial
transparency, and most importantly, program effectiveness.
As is the case with the Humane Society, some charities are
criticized because their outward public appeals are inconsistent with their
actions. This is probably the most challenging criteria to research, as large
charities can create special interest political organizations, separate fundraising
entities and often pass money to other 501(c)(3)’s whose efforts might diverge
from the presumed intent of the giving charity.
The result of these large entity tactics is to effectively cloud where
dollars are flowing.
Donating to a local organization where you can see their work goes a
long way to insuring that your dollars are used for the intended cause. For example, rather than donating to the ASPCA
national organization, why not drop $20 into the donation box at the
Anti-Cruelty Society on Grand Avenue right here in Chicago? Rated four stars by
Charity Navigator[5], you can
visit the Chicago Anti-Cruelty Society and see first-hand how they fulfill
their mission of, “Building a community of caring by helping pets and educating
people.”
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| The Anti-Cruelty Society was founded in Chicago in 1899 and it's first permanent building, pictured above, was on Grand Avenue. |
Financial transparency is another measuring stick one should consider when selecting a charity. Useful financial metrics include how much money goes to administration, fund-raising and most importantly, core operations. You should also try to find out where financial assets are being invested as they may provide insight into the management of the organization. For example, the Humane Society of the United States has sheltered over $43 million in financial assets in Central America and the Caribbean. That’s well over 22% of reported investments. (Source: 2017 HSUS Form 990 and related documents.) Some wonder why a US based not-for-profit 501(c)(3) is stashing money in off-shore investment “havens”? According to the Humane Society, its overseas investments are “Consistent with its responsibilities and its objectives as a social change organization, HSUS invests its funds wisely to get the best returns…”[6] If this sounds like a reasonable answer, consider donating. If the HSUS answers give you pause for concern, there are other organizations that might be a better fit for your charitable donations.
Finally, and most importantly, measure the actual good that the
organization does. Not every dollar
spent has the same impact. While the metrics will differ depending upon the
organization, look for data that logically indicates success and level of
effort. For example, both PAWS and the
Anti-Cruelty Society identify the number of adoptions, surgeries, volunteer
hours, etc. These are measures consistent with the stated goals of the
organizations, can be compared against one another, and are verifiable.
Generalized, and hard-to-verify claims like “100,000 animals helped”, should be
a warning.
Follow Your Heart, But Use
Your Head
Charitable giving almost always starts with the heart. We’re moved
to action because of the needs of other humans, animals or the environment. While
not a uniquely American trait, charitable giving in the United States dwarfs
that of most other nations. In 2017,
charitable donations surpassed $410 billion.
As we think about the good that these billions can do, so too might
we consider how we can leverage the vast sum of money by taking just a moment
to insure that the money we donate is both well-intended and well-spent.
