Charities’ Administrative Costs

My wife and I support several charities. Usually, in December of the previous year, to each charity, we issue monthly post dated cheques for the following year. Still, monthly, they bombard us with paper. Yearly we become more concerned about the volume of paper we get monthly: (1) standard thank you letter, (2) self-addressed envelope, (2) standard form for future donation (they have our cheques for one year), (3) receipt of the month’s donation (thankfully, some have switched to yearly receipts), and (4) other advertising material. Sure, I could let each charity withdraw monthly amounts from our bank account, but I do not wish to give them this control; we want to maintain maximum flexibility.

Perhaps our biggest concern is when some of these charities use our donated funds to give us thank you gifts! Why not use all funds in the charity?

Periodically, I ask for and get these charities’ annual audited accounts. When reviewing these accounts, as with all accounts, I look at the “notes” and account item descriptions. For example, normally, “development expenses” refer to marketing expenses. But the item that concerns me most is their administrative costs.

In the December/January 2010 issue of MoneySense magazine, they reported administrative costs of several Canada charities⎯most disturbing! They showed the Heart and Stroke Foundation with administrative costs at 50% of revenue; Multiple Sclerosis Society of Canada (48%); Canadian Cancer Society (Ontario Division 43%), B.C. and Yukon (42%); Canadian Brest Society (38%), World Vision Canada 18% (not included in the magazine article, shown at MoneySense); Mennonite Central Committee Canada (Relief & Development) 4%.

I pray the recession forced charities to look at themselves and that they will realize they get funds from folks who believe in their causes, but who expect them to be good stewards. Donors shouldn’t tolerate waste or lavish spending. Donors, review your charities’ accounts. Look at how they are stewarding God’s money. Demand better stewardship!

Managing God’s Money is about learning to be better stewards in all areas of our lives.

Michel A. Bell

Michel A. Bell is a former senior business executive, author of six books (including Business Simplified released in 2018), speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel is a Fellow of the Chartered Certified Accountants (UK), holds a Masters of Science in management degree from Massachusetts Institute of Technology and a Doctor of Business Administration honoris causa from Briercrest College and Seminary. He is founder and president of Managing God's Money.

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