Readers React

Judge a charity by impact, not overhead

To the editor: Dean Karlan is right: When it comes to charities, at the end of the day, it is the results that matter. ("Here's how to determine if that charity is worth your dollars," Op-Ed, Dec. 17)

But Karlan's use of a financial overhead calculation as a proxy for waste is problematic. Some of the most effective charities have high administrative cost ratios because the costs of their programs are relatively low compared to what it takes to run and fund their efforts.

So what do we do about waste? Karlan's second step is a good place to start: Take some time to convince yourself that the charity is making progress based on evidence. If you don't see it, don't give. If you still like them, dig more and look for the audited financial statements on the website.

Send an email to the CEO or other officers (the addresses should be on the website) saying you want to give but need to know what the auditors wrote in their letter to management. That's where you will find your first signals of how well the organization is run.

Bottom line: Judge a charity by its impact, not its overhead.

Eric Walker, Vashon Island, Wash.

The writer is an advisory board member at the Charity Defense Council.

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To the editor: While Karlan makes two excellent points — that fear of being duped by the few truly bogus organizations is a poor reason to avoid being charitable, and that effectiveness should be the primary measure of any business or charity — perhaps his suggestion that 30% overhead is "acceptable" seems reasonable in his world of multimillion-dollar budget charities.

In my world of small, highly focused and highly effective charities with budgets of tens of thousands of dollars, overheads of even 5% seem both onerous and wasteful. But then again, the small charities garner a mere 6% of this country's donations.

Charity has increasingly become big business.

Richard Geist, Rancho Mirage

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