How To Give Wisely To Charity

The holidays are a popular time for making donations to charities. Donors often want to know where their money will go furthest and do the most good, and which charities to donate to.

Here & Now's Peter O'Dowd talks with Amy Costello, founder and managing editor of Tiny Spark (@tinyspark_org), a podcast that reports on philanthropy and nonprofits, about how to figure out where your donation will do the most good.

On where people are donating

"The thing that has struck me most about this sector is the fact that I interviewed one guy who headed up Charity Navigator, which is the largest charity valuator in the country. And he said that 85 percent of the money flowing through the non-profit sector goes to about 1 percent of the nation's charities. And what that means is that the vast majority of small non-profits doing good work in this country — working on the ground, in the communities where your listeners live — have a very hard time attracting donor dollars. And so another thing to think about is, is there are non-profits right in your neighborhood, you think is doing work? Chances are they really need your money, and that most of those dollars are going to more well-known national organizations, like the Red Cross and others."

On "effective altruism"

"I think a lot of us who are gonna to write a check to a charitable cause, you want to know, 'How much impact is this going to have,' and, 'Can my dollar do the most good with certain organizations or other ones?' And 'effective altruism' basically says your dollar can go furthest if it is given to a cause in a developing nation, to children who are hungry, to children living in poverty in Africa or Latin America. That will do much more good than donating to a U.S. cause, such as maybe a homeless shelter here in Detroit, because your dollar just simply doesn't go as far there, and the people aren't really as in need as maybe a hungry child in Malawi."

On asking charities what would happen if they went out of business

"One of the guests I interviewed said that that's a very useful question to ask a non-profit. And I think what that says is how meaningful are they really in the lives of the people that they're trying to help. And so a good sign of an organization is one that is working in very close partnership with the community, tackling problems that the community itself has identified as something they want to tackle."