Which charities have the lowest overhead

Everyone who tracks overhead calculates it a little differently. Either way, nonprofits focused on reducing overhead often skimp on these practices — and that makes them less effective. Nonprofits pay less than the private sector , and that has definite costs for their programs and employees.

Underpaid employees can lead to higher turnover , which can be exceptionally expensive for a business as it requires the business to more frequently deal with the expense of running a hiring process, making a hire, and training them. If a nonprofit is understaffed, overworking its existing staff, or failing to hire qualified people, it will probably be significantly worse at provision of services.

Another point worth considering is that not all charities are created equal. The latter charity might have higher overhead — but might also be offering a much more meaningful service. These charities are often among those where additional money makes the biggest difference as it can be make-or-break for the survival of the organization , but will typically score poorly on overhead measures.

None of the above are new arguments. It continued:. In fact, many charities should spend more on overhead. Overhead costs include important investments charities make to improve their work: investments in training, planning, evaluation, and internal systems— as well as their efforts to raise money so they can operate their programs.

These expenses allow a charity to sustain itself the way a family has to pay the electric bill or to improve itself the way a family might invest in college tuition.

Top charity watchdog Charity Watch pushed back, arguing that effectiveness is too hard to measure, so evaluators should stick to overhead. Their own A to F ratings for charities come entirely from overhead and fundraising efficiency.

Questions You Can Ask If you find the charity you want to give to has not yet been rated on any watchdog sites, you can do the legwork yourself.

Ask the following questions when you're researching to help guide you on your giving: Is the nonprofit actually a charity? You can find this out by searching for its form. This information is typically found on a charity watchdog site; however, you can also visit the Wise Giving Alliance at the Better Business Bureau to see if anything has been filed for your charity.

Note that religious institutions, such as churches and synagogues, typically do not have to file a Are there complaints against the charity's practices? Again, this information is found easily on the Wise Giving Alliance website. Do the charity's marketing materials clearly state the problem and explain what they are doing to help?

Be wary of charities who drone on about the problem but fail to state what they are doing to help it. Ask the organization what percentage of donations go to actually support the programs in lieu of overhead and administrative costs.

Be wary of a charity that says percent of donations go to support the cause. After all, there has to be at least some overhead. Informed Philanthropy Making informed choices is the best way to make sure your dollar goes to support causes you deeply care about. Top Charities. By Michele Meleen. Charities Administrative Expenses. By Mary Gormandy White. How to Ask for Charitable Donations. Salvation Army Donations.

By Cheryl Cirelli. Congenital Heart Defect Charities. Charity Holiday Cards. Charitable Donations on Corporate Income Statements. By Audrey M. Tree of Life Fundraiser. Band Booster Fundraisers. Food Taste Fundraisers. You can also look for top-rated alternative charities , typically smaller and lesser-known nonprofits, which are recommended by ratings groups such as GiveWell , GlobalGiving , and ImpactMatters.

Read more about vetting charity documents. Online giving platforms and crowdfunding websites often charge payment processing fees on donations, perhaps 3 percent or more, which reduces the impact of your gift. The charity may also be charged transaction fees if you send your payment via credit card.

To avoid those fees, consider giving by cash or check or direct bank transfer when possible. You also can ask the groups not to send you further appeal letters, email, or phone solicitations. Some low-rated charities have names that resemble those of high-rated ones. We respect your privacy.

All email addresses you provide will be used just for sending this story. By Penelope Wang. Updated November 22, Illustration: iStock. Their median administrative expenses percentage is higher than the median among all charities we rate.

Public Broadcasting and Media. These charities use expensive air time to raise money, requiring a higher investment in their fundraising efforts and thus raising fundraising costs. Among these charities, the median fundraising expenses percentage is higher than the median of all of the charities we rate. By managing long-term donor-advised funds, community foundations are able to raise large sums of money while spending relatively small amounts on fundraising. The median fundraising expenses ratio for community foundations is less than the median for all of the charities we rate.

Their median fundraising expenses fall below the median for all of the charities we rate. Because donated food is their primary revenue source, food banks also are able to devote far less of their resources to fundraising.

As compared with a median fundraising efficiency among all of the charities we rate, the median fundraising efficiency for community foundations and for food banks is much lower.

Because donated noncash goods are the primary source of revenue for these organizations, humanitarian relief supplies charities are able to devote far less of their resources to fundraising. As compared with a median fundraising efficiency among all of the charities we rate, the median fundraising efficiency for these charities is much lower.

As mentioned above, by relying on the use of expensive air time to raise money, these charities require a higher investment in their fundraising efforts, thus lowering their fundraising efficiency. The median fundraising efficiency for these charities far exceeds the median for all of the charities we rate. Example: Program Expense Growth of. Note: Any Converted Score exceeding 10 will receive 10 points for this metric.

Likewise, any Converted Score lower than 0 will receive 0 points for this metric. Overall economic conditions affect many businesses, including the charitable sector.

During recessions or other economic disruptions, some cause areas are impacted more than others. To accommodate for this variance, Charity Navigator analyzes the fluctuations in program expense growth and makes adjustments to converted raw growth scores used to calculate a charity's rating.

Each cause area is adjusted individually, based on actual reported data. These adjustments will only ever be an addition to the charity's raw growth score never a subtraction. Charities are encouraged to manage their organization under the assumption that there will be no adjustment to their cause.

The current adjustment factors above are subject to change per our receipt of more recent IRS Form financial data. When changes are made, Charity Navigator will notify affected charities via the charity's registered representative or via email to another contact at the charity.

If you do not have a registered representative for your organization you can learn more and sign up for one HERE. Determines how long in years a charity could sustain its level of spending using only its net available assets, as reported on its most recently filed Form Development and Relief Services.

Religious Activities. Religious Media and Broadcasting. Botanical Gardens, Parks, and Nature Centers.