Donating money? How to choose the right charity

TORONTO – Canadians are generous: People around the country donate approximately $15 billion to charity each year.

However many people don’t know how much of the donation is going to the intended cause, according to an organization that tracks the finances of registered charities.

“The most important thing is what is the change the charity is able to bring about,”  said Greg Thomson, research director at Charity Intelligence Canada. “If, however, it is costing them 40 cents on a dollar to raise the funds then they don’t have their donors best interests in mind.”

Charity Intelligence Canada is a private watchdog group that tries to help Canadians make decisions about which charities to choose. It analyzed the financial records of more than 450 Canadian registered charities and found many spend quite a bit of money on fundraising and administration.

For example, The Leukemia and Lymphoma Society of Canada spent 35 per cent of their donations on fundraising in 2013, a drop from 37.7 per cent in 2012. However, the charity’s administration costs last year saw an increase of 0.2 per cent to 7.7 per cent as compared to the year before. In comparison, the Terry Fox Foundation allocated more than 82 per cent of all donations to cancer research.

But Toronto lawyer Mark Blumberg, who specializes in charity law, says you can’t judge a charity’s value entirely based on the bottom line.

“In some cases, some groups are being a bit deceptive,” said Blumberg, who says some charities don’t declare the full value of administrative costs when filling out required forms with the Canada Revenue Agency.

“I wouldn’t rely on the information charities file with the Canada Revenue Agency as being the Gospel truth.  In some cases it may be accurate in other cases it may be less so.”

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He says donors ought to do their research and confine their donations to fewer, rather than more charities.

Greg Thomson of Charity Intelligence agrees that Canadians shouldn’t feel pressured to make donations on the spot without doing some checking first.

“The key is to find a charity you are passionate about and is able to demonstrate to you they are making a difference.”

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