026 DGM – Are There Too Many Charities?

Are there too many charities?

Welcome. This is the podcast that helps you do good even better — regardless of which charities or causes you support. 

This is Ed Long. Each week on this podcast I talk about charities and provide actionable tips to help donors and volunteers to take their philanthropy to the next level and do good even better.

Give smart from your heart, because doing good matters.

We’re building a community of caring people who want to make the world better. And are willing to spend time and energy to make it happen. And to find and support strong charities doing solid work.

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Episode sponsor

  • Today’s sponsor is the number 1,538,860.
    • Our sponsors don’t pay us anything. But they give us a way to talk about a different charity-related concept each week. And help you and me grow our understanding of nonprofits and charities
    • 1,538,860 is the number of nonprofits recognized by the IRS as of April 14, 2014. That a somewhat surprising 121,519 (8.6%) increase from the March 2014 number (1,417,341).
    • At CharityCheck101.org you can find the location and tax-status of every nonprofit recognized by the IRS.

Main topic

  • Are there too many charities?
    • Background
      • Are there too many charities?It’s not unusual to hear or see people say that there are too many nonprofits and charities, and suggest that the IRS should make it harder to become one. And, as today’s sponsor shows, there are more than 1.5 million nonprofits in the U.S. right now. About 70% of those are charities, so that means there are more than 1 million charities out there.
      • Are there too many? I don’t think so.
      • I think the concern about charity numbers comes in part from people feeling overwhelmed by sheer numbers and the seemingly-unending list of charity choices. And I fear that at time it leads people to throw up their hands, assume all charities are the same, and give indiscriminately.
      • I think there are too many donors who feel overwhelmed by the mountain of charity choices.
      • If you’ve ever felt overwhelmed by the mountain of charities, you have plenty of company.
      • My suggestion is that we get beyond the mountain of charities, and forget about the numbers.
      • Instead of focusing on the mountain, let’s focus on the simpler task of finding a golden charity for you. A golden charity is a strong charity working on what you care about most.
  • Find gold in the charity mountain.
    • Step #1. Reduce 1,000,000+ to 300,000.
      • About 300,000 charities have finances significant enough for them to file detailed annual information with the IRS. They do that on Form 990 or Form 990-EZ, and all that information is public and available to each of us.
      • Let’s focus on the 300,000 who make detailed information publicly available. Unless you’re an insider in one of the 700,000, I suggest you take it off your radar.
    • Step #2. Reduce 300,000 to 8,100.
      • Figure out the cause you care about most. We covered this in much more detail back in DGM Episode #06.
      • Match the cause you care about most to one of the 37 mission categories provided by CharityWatch.org.
      • The CharityWatch.org top-rated charities page provides a handy list of 37 mission categories.
      • 300,000 divided by 37 = 8,100.
    • Step #3. Reduce 8,100 to 2,700.
      • Recognize that in the mission category you choose
        1. one-third will be strong charities
        2. one-third will be weak or “clunker” charities
        3. the remaining one-third will be some where in between.
      • Focus only on the strong charities
      • 8,100 divided by 3 = 2,700.
    • Step #4. Reduce 2,700 to 1.
      • Don’t try to find the absolute best of the 2,700 strong charities in your top mission. That’s a waste of your time.
      • Pick just one. Get to know it. Direct most of your giving to it. Ask it the Six Eye-Opening Questions from DGM Episode #13.
        • Fewer is more — focusing on one charity gets you more knowledge, more connection and more satisfaction for seeing your support matter. See DGM Episode #10.
  • Your smart and easy assignment for today
    • Figure out the cause you care about most. Then match it to just one of the 37 mission categories from the CharityWatch.org list.
    • Select a top-rated charity in that category. See DGM Episode #24 for more on how to do that.
  • A big part of giving smart from your heart is ignoring the overwhelming mountain of charities to find a golden charity. 
  • Had experiences? Have feedback? Share your thoughts  in the Reply / Comment section at the bottom of the page. Or email me at ed[@]seriousgivers.org

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About Ed Long, the podcaster

Podcaster Ed Long has been preparing more than 40 years to do this podcast. He knows charities and the rules that apply to them. He’s analyzed charity finances and operations.  He’s founded and run charities, and volunteered for them. He’s helped the public and law enforcement fight fake charities, and has served as a philanthropy educator and coach. Before all that he worked as a partner with a major Wall Street law firm. Ed is the founder and CEO of SeriousGivers, which itself is a charity. Ed knows the great work that strong charities can do with the resources entrusted to them, and is passionate about helping others find and support strong charities.