December 20, 2022Money Education Financial literacy Good reads Monthly update
Not All Charities are the Same
Charitable giving is a popular topic during the holiday season. Giving back is one of the most meaningful things you can do for those around you and your community. When selecting where you direct your donations, always research before you start writing cheques. There have been many less-than-positive stories over the years of misappropriated funds and inefficiently managed organizations, so try to do everything possible to avoid rewarding these charities.
In the spirit of giving, here are some criteria to cover when making donations and to add to your due diligence process. For Allan Bush Investment Team, the top of our list is whether our donations are having an actual impact. Now, this statement is quite broad and includes several areas:
- Charity’s focus and overall strategy
- Percentage of funding to cause vs admin costs
- How transparent the charity is with its books
Historically, finding this information took quite a bit of investigative work, but not long ago, an organization was created to do all of the legwork for you. Charity Intelligence Canada was founded in 2020 and actively researches Canadian charities. Their website posts free reports on over 800 Canadian charities and in-depth information on philanthropic sectors like Canada’s environment, cancer and homelessness. They perform independent research and strive to help Canada’s charitable sector be more transparent, accountable and focused on results.
This resource can be extremely useful in helping target charities that work in desired areas that you specifically want to focus on with your donations. Their 5-star rating system is very effective for scanning prospective charities quickly and weeding out the ones you may want to avoid. The areas of focus for the rating are:
- The openness of activity reporting
- Transparency of the financial books
- Financial health
- Percentage of donations getting to those in need
- Social impact
Since over $18 billion was given to charities by Canadian donors in 2021, this isn’t inconsequential. We agree with the philosophy of putting money to work in the areas with the highest impact. This isn’t the only criteria, but if you want to spread out your donations, it may be an excellent place to start.
Here is a link to the published Top 10 Impact Charities summary. You will find additional links to other summaries focused on specific areas, including your local geography.
The leader of our team, Allan Bush, CIBC Wood Gundy Waterloo, makes charitable giving one of the most meaningful ways he connects with his community. For Allan, finding a charity that focuses on an important area to him and his family is an essential first step. Then, ensuring that there’s a layer of due diligence to ensure that the charity is effectively run is next on the list. If you’re looking for ways to put some of your wealth to work for those around you, let us help you develop a year-end plan that also helps as an important tax strategy. With this and all other financial planning ideas, we’re always here to help.