Give away your money more efficiently...

Many of us who support charities worry about whether or not our donations are doing all that they could. When the Red Cross was flooded with money after 9/11 or after the Tsunami last December, they took a lot of critical flak from pundits who second-guessed the trajectory of every dollar. And while even the most sparsely run charity needs a telephone line and a fax, many of these organizations shower their paid executives with largess that rivals that seen in corporate America.

On the other hand, sometimes paying more for strong, experienced leadership leads to an overall improvement in revenues, and therefore to the ultimate recipients of aid. Some of these organizations manage over a billion dollars a year in donations- a CEO who is a 1% more efficient fundraiser could add ten million dollars to the yearly take.

Pallota Teamworks was a for-profit charity services company (running the AIDS rides and other fundraising efforts), which collapsed in 2002 amidst allegations of high overhead and undercutting of smaller grassroots programs. However, by the time that the company went under, they had raised over 200 million dollars for AIDS and breast cancer groups. I participated in the last AIDS ride, and was incredibly impressed by the professionalism and community spirit so frequently lacking from events organized by non-profit organizations with primarily volunteere labor. Were they profiteers or saints? Maybe a little of each...

So the question is, where do you send your money? Do you look for the organization with the greatest efficiency (percentage of donations going to charity), or the greatest overall contribution to the cause? This is not an easy question, and there are a number of complicated intervening variables that make picking a charity difficult.

This is where Charity Navigator comes in. This site brings to the world of giving the in-depth data mining and "executive summary" reports typically seen on Wall Street's equity analysis Web pages. Charities are rated on efficiency, capacity, and ranked against other organizations in their areas. This type of information can really help extend your donation. You may have a favorite cause, which you have supported for years, only to find out that another group covers the same area much more efficiently.

The site is very easy to read and navigate, and the database is exhaustive and frequently updated. There are a bunch of great resources such as tax tips, personalized charity tracking lists, sector analyses, and a calculator to optimize your donations. They have a good deal of background information on charities in general, breaking news on humanitarian crises around the world, advice on how to deal with unwanted appeals, as well as some fascinating "top ten" lists- for example, the top ten highly paid CEOs at low rated charities!

This is what the Web should be- an elegant aggregation of useful data that is actually fun to use.