How to choose which charities to donate to (it's not how you think!)

Have you ever wondered how to know if your donation to charity is doing the absolute most good that it can? At some point you've probably heard that you can tell that a charity is "good" if it spends as little as possible on something called "overhead" right? Wrong. Some incredible research actually shows that organizations that spend too little on that thing called overhead, aka, infrastructure, actually make LESS of an impact than those that sufficiently invest in that infrastructure. That's n

o good! We give our money so that we can see a big social impact to be made. We want to see social problems ultimately solved, not perpetuated or dragged on forever, don't we? So in this video I want to talk to you about a much better way to judge if a charity is deserving of your financial donations and how to tell if they're making the biggest impact possible and doing the most good that they can for as many as possibly are able. Welcome back! If this is your first time to my channel, my name

is Amber Melanie Smith, and I am a founder and non-profit executive director, speaker on social impact, service, and leadership, and I make these youtube videos to help aspiring changemakers with tips and strategies to help you change the world while living a life of impact and purpose, so welcome back! I have worked in the nonprofit field for years and have heard so many people casually say "well I don't want to donate to this charity or that charity because they have a high overhead!" but what

overhead actually is, is widely misunderstood. And the idea that it's a bad thing and should be minimized has truly hurt society's ability to tackle big social problems. As Dan Palotta asks in his popular TED talk, The way you think about charity is dead wrong, if charities have been putting so much into programs and so little into overhead because of this public perception of what overhead is for so long then if it were effective why wouldn't we have ended homelessness or found a cure for canc

er yet? Just think about how fast companies and the private sector can move in developing new technology and having space tourism and so many crazy huge huge changes to society, because they're investing more in that infrastructure, that overhead, that they need to have a strong foundation to tackle these big problems. But we're not allowed to do that for charity. You would think that all of the billions and trillions of dollars of donations that we've made over the past century to charities wou

ld have made a dent in some of these big issues right? Unfortunately our mindset about how to choose which charities to donate to has really limited our ability to make a dent in these issues because we are focusing far too much on the unimportant thing - overhead - and far too little on the most important thing - impacts. The reason the public came to care so much about overhead and how much charity spends on it a history of a couple of bad seed organizations committing crimes that poisoned pub

lic trust for the whole rest of the nonprofit sector. But what we really should be angry about is things like corruption or scams or fraud or a lack of transparency but those things don't equate to having a low overhead those things are just about a charity being honest with the public and we can do that just fine and invest in our infrastructure so that we can make a bigger impact so let's talk briefly about what overhead is and why it's not actually the bad thing that we think it is when most

people think about overhead they assume it is something that pulls funding or resources away from what the true mission of an organization is or its programs but this perception is called the overhead myth so some of the things we tend to think of as overhead we're talking an office space or workspace or staff or marketing or advertising or professional development or Dessay equipment equipment these things are not unnecessary superfluous things these are the things that are going to lay the fou

ndation and create the infrastructure for a non-profit to be able to scale and meet a large-scale social problem head-on and solve it sure some organizations claim that they can accomplish their mission without some of these critical pieces of infrastructure but the fact of the matter is and the research backs up but these organizations will not be able to scale and grow and will not be able to ultimately end the social problem that they have set out to tackle and that's because ending a major c

omplicated social problem requires a strong foundation and strong infrastructure as Dan pilota once again explains nobody bats an eye when a business says that they need a workspace or an office or staff or equipment in order to operate but if a charity says they need these things they might be considered immoral or inefficient and that attitude prevents charities from being a stable and sustainable enough to actually do what they need to do here's another way of thinking about it let's say that

your household is a charity so your top mission your program is to make sure that your family and your kids have enough to eat that they get an education and that they're healthy and happy right now using this metaphor if your household were a charity the same way the public thinks about charities in general then some examples of what your overhead would be could include your house your car your technology your utilities electricity etc water and you as the CEO or staff of your household now im

agine one year that you are struggling to pay your rent or your mortgage and keep your electricity going keep your lights on and your family and friends come along they want to help you it's just awesome but they say okay we're gonna get all this money together and we're gonna help you but you can only spend it I'm directly feeding your kids only the food that goes in their mouths is what we will allow you to spend money on so they all rally together and raise all this money for you and they giv

e it to you and now you can feed your kids which is awesome but you just lost your house and you just lost your electricity which makes it kind of hard to feed those kids anyway and accomplish the rest of your mission so your house you your electricity these things aren't really overhead are they they are what you have to have in order to fulfill your mission of keeping your family healthy and happy and fed and educated they're not separated and unnecessary those things lay the foundation for yo

u to be able to do the rest of the work so just like for a charity that you care about we need to start viewing these things these critical pieces of infrastructure staff office equipment marketing professional development as not superfluous or unnecessary things but things they're gonna allow them to accomplish the rest of the mission that you want them to accomplish so if I were a donor I would much rather donate a portion of money to the organization's direct over - their infrastructure knowi

ng that in doing so I'm going to be able to actually amplify their entire ability to make an impact I think of it like this if I'm going to be a donor and donate a hundred dollars for example I can either insist that the organization's spend it only on directly providing food to the hungry clients that they serve or I can allow that organization to invest it in let's say an ad or a marketing campaign that's going to allow them to raise a thousand or ten thousand dollars and thus be able to feed

way more people than my single $100 donation could feed that's way more compelling to me as a donor because I'm all about results we want to give and support in order to see these problems solved side rant next time you see a social media post or something talking about the overhead ratios of charities please pass it by or speak up or do something because not only are most of these posts factually wrong they are perpetuating this attitude that is causing us to starve the organizations that reall

y need the critical infrastructure so that we can do huge amazing things okay so at this point you're like I get at amber if overhead is not the right way to think of how a charity might be deserving of my donation then what is and that answer comes down once again to the most important thing you need to know about any charity and that is what kind of an impact are they actually making so it's really exciting that over the past couple of years a couple of charity watchdog sites and financial inf

ormation websites that study charities have kind of banded together to tackle this overhead myth that I mentioned and to offer the public a new and more valid way of understanding whether a charity could be deserving of your charitable donations they've seen the negative results of perpetuating this idea that overhead is a bad thing that needs to be avoided on our ability as a society and as a nonprofit sector to tackle these really big problems so hats off to them for you know standing up and r

ealizing these errors and try - right the ship so that we can get some good work done so the focus is finally starting to be on what it should be and that is results and impacts things like how many people are escaping the cycle of homelessness how many acres of land have been preserved from deforestation how many people's lives have been changed these are the things I personally care a lot more about than what someone's specific overhead ratio is so if you want to learn more about a charity spe

cific impact so you've got a couple of options you can look at that nonprofits website and hope that they are articulating those impacts very well on that site you can also go to one of the websites that I mentioned a lot of these sites are coming together in this network and putting an impact information section on the profiles of each charity in their database so let's take Charity Navigator as an example if you go to Charity Navigator org you can search for any registered charity across the c

ountry using the search bar at the top of the site so just type in the name of the charity that you want to learn more about or if you you can just browse all the charities if you want and keep in mind that these websites are just now starting to roll out this impact information section across all of them and so not all charities across the whole country have this section yet in these databases so just be patient check out the ones that have it so you can kind of get a feel for what they're tryi

ng to demonstrate by showing the results of these organizations not just their financial overhead ratios so I did a search for a charity called families forward they received a lot of high marks in terms of their financial transparency and accountability which is awesome like I said overhead not important but things like accountability and transparency definitely important keeping that public trust is really critical for any organization but as you can see on the family forward page or families

forward page that they have this impact section down below and it's really actually very inspiring to see so look at that I can see as a donor the most critical piece of information to me which is what did they actually accomplish in terms of their and I can see that in 2018 they were able to work with 233 households to keep them out of homelessness and in a stable home for at least six months or more that is super compelling information to me so in summary it's that impact information that you'

re really after because if we are spinning our wheels high overhead low overhead not accomplishing anything it doesn't really matter what your overhead is if we are stuck in a world that still has the problems that had a hundred years ago so if you're thinking about supporting a charity in your community or anywhere in the world you've just got to ask them one question how have they changed lives what have they accomplished in the past year or past several years what's their vision for the futur

e and how they plan to grow their impact to ultimately solve the social problem that they were created to solve then decide if you're going to be an investor in that kind of future that's it I really hope that this has given you something to think about when considering where you'd like to donate your hard-earned money to a charity this year or in the future once again my name is Amber Melanie Smith and I make these videos once a week here on YouTube sometimes more you're lucky and on topics lik

e social impact charity nonprofits leadership service and more basically everything related to how humans can make the world a better place please don't forget to subscribe give this video a thumbs up and ring the bell to get alerts on my next video finally if you're on Facebook don't forget to check out my Facebook group change the world or bust myself and other changemakers are having great stations out there on how we can all work together to make an impact so I hope that you can join me than

k you so so much happy donating happy volunteering happy making the world a better place and see you next time you