Donate to local charities, not the American Red Cross

Donate to local charities, not the American Red Cross

As you may or may not know, the American Red Cross spent one-quarter of the money donors gave for earthquake relief in Haiti in 2010 on internal expenses. What is even more disturbing, is that the organization has not publicly announced how much of every dollar donated will actually benefit the victims of Hurricane Harvey.

Now, don’t get me wrong – the American Red Cross is on the ground and allegedly, they have spent over $50 million in shelters and other resources for victims of the storm. That being said, your money would most likely be better spent by other local charities who do not have unusually high administrative costs.

Hopefully, airlines giving you 10 miles per $1 donated will not deter you from maximizing your donation.

Suggested organizations to donate to (yes, some are not local but have lower admin. costs than the ARC):

Source : NPR & U.S. Senate Report

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  1. I’d like to present a counterpoint to your argument, specifically, why donating to charities with higher administrative costs is not necessarily a bad thing. Charities, much like any other business, rely on their people to make them work. Many smaller, local charities rely on volunteers to perform many of the same functions that paid employees do for larger non-profits (i.e. the Red Cross). What this means is that larger organizations, which would consequently have higher operating and admin costs, have a larger pool of resources and talent, with connections around the world, as compared to local charities. These connections and the availability of resources and knowledge mean that while they may spend more money on admin, those costs are going towards obtaining an understanding and working out complicated logistics for where the money could do the greatest good.

    A charity with a 0% admin rate could achieve that rate by simply handing off the money to a local family, whereas a charity with a 30% admin rate could use those funds towards arranging for medical care, rebuilding homes, etc. all of which would be literally impossible without paying for the attorneys, managers, and skilled workers who know how to do such things.

    An efficient charity is not always an effective one, and when considering who to donate to, it is wise to look at both factors.

  2. With all due respect, the constant idea that nonprofits should have the lowest possible administrative costs is unrealistic an counter productive. 25% is a little on the high side, but it’s not unreasonable. It’s pretty hard to get below 15% and the very infrastructure that allows for rapid response means higher administrative costs. Give locally if you prefer — there are lots of great local organizations. But it’s irresponsible to vilify the Red Cross for not having an answer on hand to a question that I doubt anyone could accurately answer at this point in time.

  3. Way back when, I volunteered for the red cross. They told me that they got a ton of money for hurricane Andrew. They put it in a fund for hurricane Andrew relief efforts. They didn’t spend all of the money. But because it was earmarked for hurricane Andrew relief, it couldn’t spend the money for any else, either. When do asters happen, the red cross is usually one of the first on the ground and also the first charity people think of to donate to. They can’t predict how much people will give or how much people will need – other charities and the government also step in and provide varying levels of help. The red cross is a worthy charity.

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