Wednesday, September 24, 2014

Charity – where does it begin? And end?

By world standards, most of the people reading these comments are wealthy. So, given that we have more than most, how much should we give as Charity? And what is our giving obligation: goodwill or guilt?

Charitable Opportunities Everywhere

Perhaps I have an unusual perspective because I was born in India and grew up with beggars on the street – people in various states of distress who intruded to solicit alms. Sometimes we gave them a couple of coins, but most often we ignored them. Indeed, they were so much a part of the scenery that I really didn’t notice them until much later, when I returned from abroad. Only then did I really see the old familiar faces of beggars that I had known since boyhood. I doubt if any of them knew me, because they gave me the same blank stare that they give any prospective donor. Perhaps I was noticed a bit more because I now had the aura of a more susceptible foreigner.

When I started giving out the local equivalent of nickels, my mother warned me to limit my benevolence to the local norms – pennies. I wondered what she meant till I was overwhelmed by a persistent following, including some who had already received their alms just minutes before. They were simply testing the limits of my foreign naiveté. Evidently, word had spread via the local grapevine. When I ventured out the next day, a beggar’s brigade greeted me. Uncomfortably, I had to end up being quite rude, to escape their attention.

The situation is not different in America, where I live now. Once you give to any charity, you become a marketing target for those who somehow get to know that you are indeed a donor – sharing of information between some, I suppose. You are inundated with junk mail and telephone soliciting which you have to fight off and discard until your information eventually dwindles to the status of a bad prospect.

How much? To whom?

So, what exactly is charity? (1) Is it an obligation, or does it stem from guilt? How much should I give and to who? And, who sets the parameters: Religion? Society? Family? Relatives? Work? Country club? Should I heed the pleas of the preacher, or simply keep up with the Joneses?

Religion is always the first bastion of benevolence. Who better to set the ground rules than the links with the Almighty? You go to church to feel righteous and peer pressure takes over: if your neighbor puts some coins in the plate, why not trump that with paper money? If they have already papered the plate, no one will notice your $ 10 bill, so it may be better to put in a few $1 bills instead.

The salesman – uh, the pastor or rabbi – stresses the rationale: if you give more, you’ll receive more; if you don’t, then you are selfish and you’ll get what you deserve. To test you to the limit, you are advised to “give till it hurts”. To make it easy for you (and for the bookkeeper) the concept of “tithing” was invented – give a percentage of your earnings, and in return you will receive the maximum blessings.

Plethora of possibilities

If you don’t go to church, then secular society has a plethora of possibilities to clear your conscience or goad your guilt.

You can donate to United Way, or the Salvation Army, or “The Y” – secure in the knowledge that your giving is in good hands and indeed is tax deductible. You melt when you see the pitiful, pathetic pictures of poor orphans in some far away place and hear the pleas for your generosity to help them survive on a paltry pittance that you can easily afford.

Does charity apply to humans only? How about those poor cats and dogs in the animal shelter? Perhaps children should be first; but would a starving adult be more charity deserving than a not-so-starving child? Well, you’ve seen that advertising too.

How much of your donation actually goes to Charity?

Perhaps you should know exactly how much of your donation actually goes to those orphans after the marketing and administrative salaries have been paid and the expenses for TV advertising and sales brochures have been deducted. Ask your favorite charity for that percentage. You’ll be surprised. 

You’ll find links below showing America’s worst charities and the salaries of the highest-paid executives of major charities (2) (3) and a regular updated charity navigator. (4) You’ll find similar sites on the web for wherever you live.

Tax deductible?

Most charities take care to remind you that your gift is tax deductible. (5) Does that encourage you to give more, or does it discount the value of your giving? Donating your time or giving to the homeless in the street is indeed charity – but it cannot really be documented and is not tax deductible.

Where do we begin?

The old adage – charity begins at home – is a good starting point. Does that mean just your immediate family, or should it include relatives and their extended dependents? Should you give more to the ones in need, or distribute your largesse evenly?

And where is home? Is it your own neighborhood, or the huddled homeless in the seedy part of your hometown? Should I donate to help people who are victims of all the catastrophes that are regularly on the news? Should I help the flood victims in America first because they are nearer to where I live now? Or should my first allegiance be to flood victims in India because of my origin? If I can afford it why not help both? I’m supposed to give till it hurts. So, how much should it hurt?

Music & the Arts

Some people seem to take pleasure in the recognitions they receive for their public donations to music and the Arts. Personally, I don’t see how helping to pay the salary of the cellist should be considered charity. If the ardent patrons of the arts want so much to hear the symphony, let them simply pay more for their tickets.


Anyone who is truly passionate about any charitable cause can tell you it’s not purely a selfish endeavor. But self-interest does have a hand to play, though perhaps an unconscious, instinctive one. We give because we see a need in the world, and we continue to give because filling that need fills a related need inside of us.

Cynics point out that charity brings its own rewards. The good feeling you get when you serve the needy is itself the benefit you derive. Anyone who has his or her name posted as the benefactor of the new library or hospital wing already receives the benefit of recognition. Still, it is called charity and is tax deductible in the bargain.

Charity is something within

I have come to the conclusion that charity is only charity when you give goods, services or money without personal gain, benefit or recognition of any kind. True charity is anonymous. It begins and ends within your self.


  1. The Meaning of Charity:
  2. America’s Worst Charities:
  3. Top 25 Compensation Packages for Charity Executives:
  4. Charity Navigator: Guide to Intelligent Giving:
  5. Tax benefits of giving:
  6. Giving as Receiving - The True Rewards of Charity:
Jim Pinto
24 September, 2014


  1. Jim,
    I really have pleasure and a good feeling with Kiva (
    Almost every time a loan is paid back. I just add a small amount everytime there is a repayment. So the amount is almost automatically grown bigger and you can loan more and more. So, it is not giving but helping.

    1. Thank you, Ary. I got a good feeling too when making a Kiva donation. What a wonderful idea!

    2. There is an absolute marvellous movie explaining how it works on

  2. In the early 1960's I lived in Oxford and the main charity was OXFAM. It ran with volunteers, mainly students, and used about 95% of the proceeds for the charitable purpose. Then I came to the USA and one of my engineers wife was a professional fund raiser for a church. They used most of the money collected for raising funds and paying fund raisers, less than 20% went to the charitable purpose. I was disgusted...
    After the San Digeo fires of 2003, which burnt 270,000 acres, 2200 homes and caused 14 deaths, the Red Cross raised lots of funds for relief, so much so the head of the organization had a bonus of 100% of her salary which was over $120,000 per year. Most charities are run by CEOs with their only interest is increasing their take home pay and successive governments allow it continue because no one cares. Americans may think they are generous but it is one big con and through each election cycle they allow it to continue..
    I have stopped giving to most charities, they are a fraud. The Salvation Army might be the only exception.

    1. Take a look at the salaries of the top-25 highest-paid executives of major charities - link #3 in the blog.

  3. You really cover the field, Jim. Stimulating, thought-provoking always.

    1. Jim

      I came across a TED talk recently that relates to this. It's entitled " The way we think about charity is dead wrong."

      I and get his point: a high-performing charity has higher costs, but it's worth it because the needy get more. He proposes the charity as any other business, and maybe it is, but accepting that 'fact' changes my relationship with the charity 'economy'. Suddenly I'm a 'prospect'. I 'get' that a high-performing CEO extracts more out of the masses, and arguably that is a good thing for the intended result.

      I'd like to bring it back to another level, however: in my (myopic?) world, there is no limit to how much an entrepreneur who creates a successful business can be paid. But there SHOULD be some limit on what a hired hand (no matter how 'good') is paid. Pick a 'multiple' number - is 50 x average national salary enough?

      I can accept that rewards are in some relationship to risks taken and results delivered. However to leave the selection of the multiplier up to the hired hand is folly. And that goes for any business, including the business of charity.

      Are the 'hired hands' just getting a bit greedy - especially in North America? Am I just being envious?

    2. I visited your TED link - "The way we think about charity is dead wrong."
      I'm copying the text intro here:

      Activist and fundraiser Dan Pallotta calls out the double standard that drives our broken relationship to charities. Too many nonprofits, he says, are rewarded for how little they spend — not for what they get done. Instead of equating frugality with morality, he asks us to start rewarding charities for their big goals and big accomplishments (even if that comes with big expenses). In this bold talk, he says: Let's change the way we think about changing the world.

      Thanks much!

  4. John:
    The url works - if you simply cut and paste into the web browser.

  5. I buy Christmas and other gifts, and personal items from I can select rainforest, pets, literacy, etc. as beneficiary. Most items are hand made globally. Stacey Edgar's Global Girlfriend's is one of the many organizations providing goods through this site. For Christmas, a tote and scarf helps preseve the rainforest and assists women rescued from sex traffickers who are being educated as well as receiving economic benefits from sewing goods.

  6. Thanks for shedding much needed light on this important topic. I believe that church comes first because they couldn't exist without support. Then I donate to the charities which return the highest percentage to their cause. This is complicated because I'm not sure how much executive compensation is warranted, and I admire certain charities regardless of overpaid executives i.e. City of Hope, Shriners, St. Jude. I also donate to Doctors without Borders, Operation Smile, Special Olympics, Heifer International, Wheelchairs, and Salvation Army simply because I believe that they do great work. I should include Red Cross not because they are efficient but because they often do vital work. The poor souls in India and elsewhere or on the street deserve a buck or two ("There but for the grace of God go I"). Some say that many of these wretched folk are happy as they are, but I don't agree with that for one second. Nobody chooses poverty or homelessness or tragedy if they're in their right mind. And those in that last category also need our help, perhaps most of all.

  7. Hi, Jim,
    I like the blog idea for several reasons. With Charity one must give as they choose.
    I know that my father struggled with the idea for tithing to church. We had a small dairy in Texas, and 2/3 of milk income had to go to pay for cow feed. Then there were other non-increase expenses for family, land, maintenance of equipment. So it was very confusing. Since the cows and facilities were cared for with milk income, the calves which were birthed were truly increase unless you had veterinary bills and need for feed. I do agree that some charities seem to only be in business to pay the fund raisers and administrators. J. B. Lovell

  8. Some time ago I read an article on how much of donations actualy went to real charity. Salvation Army won with 75% to administration and 25% reach the poors. You decide.

  9. Excellent post.

    There's an interesting chapter in "The Millionaire Woman Next Door" about charity. The rationale "if you give more, you’ll receive more" is actually true, to some extend - the economists looked at a large group of people with household income over 100,000 a year. Those who gave more than 10% of their income to charity had a significantly higher net worth than those who gave less than 1%. It seemed odd... how do you increase your net worth by giving money away, they asked? Turns out these wealthy people had to budget and plan carefully to know how much they could give, and that budgeting lead to fiscal responsibility. They also received satisfaction from being generous, so they didn't need to buy material things for themselves. Most Americans thought that if they were rich, they'd be happy because they'd have all the STUFF they wanted, but the mentality of people who are actually wealthy is very different.

    Personally I support my church and a few favorite charities, with the highest percentage going to Amnesty International and Doctors Without Borders. They are all on auto-bill so I don't even think about it, it sounds lazy but it's the best way I found to achieve my goals.

  10. Your recent piece about charities was great and I hope such dialog continues. I've been so annoyed by phone calls and packages of unsolicited mailing labels the past few years that I've decided that the offending charities will not be getting my support this year, ditto any that insist on knowing my phone number. The only thing that will stop charities from squeezing harder on their existing supporters with such practices is when they stop working.

    The worst example so far this year is Greenpeace sending unsolicited, non-recyclable, non-compostable, non-shredable, identity fraud-baiting mailing labels. The worst example last year was Oxfam's ultra-aggressive door-to-door sales person who wouldn't take several polite no's for an answer. She wouldn't stop pitching and countering my objections, even after I explained that I was already a modest annual Oxfam supporter and would have to decrease support of another charity in order to increase support for Oxfam.

    Perhaps the best solution would be to give smaller amounts anonymously and forgo the tax deduction.

  11. In my opinion religion is always the first bastion of benevolence as you mentioned and then comes the secular society that has a plethora of possibilities like United Way or Salvation army. I recently came across a couple of sites that take care of donations and charities like this charity site called GiveWell look at which charities use money the best and need money the most. GiveDirectly is another charity site that spends money for a good cause by fighting poverty in Kenya and Uganda cold, by giving hard cash with no strings attached.

    Here is a brief article referring to those two sites I mentioned above:

    1. Lachen: Yes, there are indeed many possibilities. Thanks for the mention of GiveWell and GiveDirectly - and the link to the article.