As global fundraising efforts for victims of the earthquake in Haiti gain momentum, some people are asking how much of the money collected will end up in the hands of those in need.
The website smokinggun.com said last week that some donations to the Yele Haiti Foundation, founded by Haitian-born singer Wyclef Jean, went to Jean's own projects, an allegation he strongly denied over the weekend and again on Monday. The organization says none of its funding is diverted from the people who need it.
"One hundred per cent of all donations go to support earthquake victims in Haiti," Yele's official website said Monday morning.
At issue is the percentage of donations that goes toward administration costs. Different organizations have different levels of overhead.
World Vision's 2008 annual report, for example, says 82.1 per cent of its revenue supports programs that combat poverty and help children and communities in need; 11.9 per cent is allocated for fundraising and six per cent for administration costs.
On average, 88 cents of every dollar donated to The Salvation Army is used directly in charitable activities — exceeding the Canada Revenue Agency's guideline of 80 per cent "donation efficiency."
Canada Revenue Agency guidelines for charities
More than 80,000 chariaties are registered with the Canada Revenue Agency. To qualify, an organization must be Canadian and meet several requirements apart from the Income Tax Act. An organizations must:
- Devote all of its resources to charitable activities, involving one or more of the following categories: the relief of poverty, advancement of education, advancement of religion, or other purposes that benefit the community in a way the courts have said is charitable.
- Not use any part of its income for the personal benefit of its members, shareholders or managers.
- File the annual registered charity information return, maintain adequate books and records and make them available for audit upon request.
CanadaHelps.org, a charitable organization that sets up online donation applications and provides the public with a list of charities registered with the Canada Revenue Agency, cautions that this raw number isn't the only figure people should use to evaluate a charity.
Owen Charters, executive director and CEO of CanadaHelps.org, says people should calculate the rest of a charity's numbers themselves to get a fuller picture of its activities.
"The best thing to do, but not what anyone really wants to do, is treat giving the way that an investor would treat investing and actually look at financial reports, look at the publicly available tax returns that are on the CRA site," Charters said. "They are available for every single charity."
Money is already flowing into organizations with the goal of helping the vicitms of the earthquake in Haiti. Canadian Red Cross spokeswoman Katie Kallio said that in the first 24 hours after the disaster last Tuesday, the organization raised $1 million for disaster relief.
By Monday, Salvation Army Canada had raised $120,000 via mobile texts alone, accounting for nearly 10 per cent of the charity's total amount raised for its Haiti campaign since the devastating earthquake, national spokesman Andrew Burditt said.
For those who are planning to donate but first want to check into the numbers, here's a breakdown of how some of the major charitable organizations involved in Haiti relief efforts say they spend donations:
- UNICEF Canada: According to the 2008-2009 financial report, 80 per cent of revenue is allocated to creating new programs, with fundraising and administrative costs taking the remaining 20 per cent.
- Plan Canada: Its website says that on average, more than 80 per cent of the money raised goes toward planning and implementing programs that benefit children and communities. About 20 per cent is spent on operations and fundraising activities.
- Canadian Red Cross: The agency's annual report says it allocates almost 90 per cent of revenue to services and programs. The remaining funds go towards fundraising and administration.
- Oxfam: The organization says 80 per cent of funds support running and monitoring its programs. This number is broken down further, with 72 per cent allocated for overseas and seven per cent for Canadian programs. The remainder goes to fundraising and administration.
Charters recommends that those planning to make a donation also look beyond the numbers to see how effective a charity is in terms of delivering on its mandate.
"I think the biggest thing people need to look for is actual evidence that the charity is doing what it says it's doing more than anything else," he said. "And that's not always a factor of dollars and ratios and finances."