Trust high in charities’ use of donations: poll

Almost three- quarters of Canadians are confident charities spend money responsibly, but most don’t know how much of their donations actually go to the causes they support, accord- ing to a poll by Forum Research.

The poll found about onethird of respondents, or 36 per cent, believe charities generally spend at least 80 per cent of donations on directly servicing the organization’s mission. But 36 per cent of respondents had low expectations, with just under a quarter saying they believe 30 to 60 per cent of donations go directly toward helping the needy, and 13 per cent said charities spend all but 30 per cent of their budgets on overhead.

On average, charities direct 72 per cent of their b udgets t o wards good works, with f undraising costs and overhead accounting for the remaining 28 per cent. Only 28 per cent of respondents said they expect 60 to 80 per cent of their donations to go directly toward the charity’s mission.

The public opinion poll randomly surveyed 1,281 Canadian voters.

Greg Thomson, director of research at the charity watchdog Charity Intelligence Canada, said it was interesting that a large majority of Canadians trust charities to responsibly spend money, even though about a third of respondents think they’re spending it less efficiently than they actually are. He encouraged donors to think about more than financial efficiency when deciding which charities to support.

“They should be donating because the charity is changing lives,” Thomson said. “And you can’t tell whether they’re changing lives just by looking at the overhead ratio.”

Financial Post Magazine’s annual Charities of the Year report card can help identify charities that are doing both: raising and spending money efficiently, and getting results by putting that money to work. For the fourth year in a row, we’ve pored over the tax returns of 86,000 charities to find the most transparent, accountable and efficient picks, with the results available in the December issue.

Thomson said he thinks it’s great that such a large majority of Canadians trust charities, but notes it’s still important to ask questions before opening your wallet.

“Even if 90 per cent of the money you donate is going to the mission, what is it doing?” Thomson said. “Is the mission a good thing for society in general, compared to other options for giving?”