When Donations Go Astray

This holiday season, Americans will dig into their pockets for good causes. But these gifts will sometimes benefit charlatans or extremists, or simply be wasted.

Partly that’s because religious giving — and a good deal of casual secular giving — isn’t vetted as carefully as it should be. Researchers find that religious people on average donate more of their incomes than the nonreligious, and Christians, Jews and Muslims alike write checks to charities that they assume share their values. Dangerous assumption.

Some well-meaning Christians will support Feed the Children, a major Oklahoma-based Christian charity that describes its mission as providing food and medicine to needy children at home and abroad. By some accounts it is the seventh-largest charity in America.

But the American Institute of Philanthropy, a watchdog group that also runs Charitywatch.org, lists Feed the Children as “the most outrageous charity in America.” The institute says that Feed the Children spends just 21 percent of its cash budget on programs for the needy — but spends about $55 to raise each $100 in cash contributions.

Feed the Children also has been the subject of troubling litigation and investigations. The Oklahoman newspaper says that in 2007 the charity spent $1.2 million on a house used by the founder’s daughter, a charity executive until she was fired this year. It also said that Feed the Children once lent $950,000 to a framing business headed by the founder’s son, and that the charity has sued the son for allegedly helping strip a warehouse of $5 million in materials. The son has denied the allegations in the suit.

In addition, the institute says that Feed the Children inflates the value of food and medicine to make it seem as if it does far more than it actually does.

Tony Sellars, a spokesman for Feed the Children, shrugged off the accusations as a disagreement about methodology and said that the lawsuits were being resolved. “We’ve helped 200,000 families in America this year alone,” he said. “The opinions we value are those of the people we’re helping.”

Meanwhile, American Jews sometimes support nonprofits that actually make peace for Israel less likely. A few days ago, the Hebron Fund had a gala fund- raiser in Manhattan, and some of those who attended probably thought that they were supporting Jews trying to live peacefully. In fact, the Hebron settlement is notorious for extremism and violence against Palestinians. (The settlers disagree, saying that the problems arise because Palestinians want to kill them.)

Similarly, some Muslims support Islamic charities in Gaza — some of which are manipulated by Hamas. The money ends up bolstering Hamas, oppressing Palestinians, and undermining Palestinian hopes for peace.

One of the most admirable Muslim practices is zakat, or alms-giving, whereby the wealthy often give 2.5 percent of their assets to the poor each year. But prosperous Muslims often donate in a very unbusinesslike way; if the money were used to support schools or proven poverty-alleviation programs, it could have far greater impact.

There are many reputable religious charities. For Christians, there are groups like Medical Teams International, World Vision and Catholic Relief Services. Jews can look to American Jewish World Service or Rabbis for Human Rights. Muslims can consider Islamic Relief Worldwide or smaller groups like the Afghan Institute of Learning.

And of course there are many large secular organizations with strong track records, like CARE, Save the Children, Mercy Corps and Heifer International.

Philanthropy has made huge strides in the last couple of decades, with far more emphasis on cost-effective interventions that are scalable to bring about change. The Bill and Melinda Gates Foundation has helped lead the way, and Web sites like Givewell.org guide small-time donors. CharityNavigator.org ranks organizations partly by administrative expenses, which are less important than a charity’s impact on the needy, but it is trying to develop more useful information about impact.

Today, however, much giving remains impulsive and inefficient. When people get a call out of the blue asking them to donate to firefighters, they may imagine the caller is a volunteer; instead, he’s probably a paid fund-raiser, who will take much of what you give.

“Chuggers” — short for charity muggers — who stop people on the street likewise often work for fund-raising companies that swallow much of any donation. When people receive address labels or a key chain from a charity, they’re more likely to write a check — but that’s a terribly inefficient way to raise money.

Look, I’m nervous about this column, because I don’t want to discourage giving. But donations could accomplish far more if people thought through their philanthropy, did more research, and made fewer, bigger contributions instead of many small ones that are expensive to handle.