Question

If you were investigating various charitable organizations to determine whether or not you wanted to contribute, at what items and data would you look? Do you believe it is better to find a charity that has less administrative costs? Why or why not?

Answer 1

While deciding whether or not to contribute to a particular charity, the first thing to look at would be their financials. This would help in ensuring that the funds are actually going to the right place and the charity is a legitimate one. It will also help to in checking the efficiency of the charity by getting an idea of social impact per unit of money contributed and would, therefore, ensure that the funds are utilised in the best manner possible. Another thing to look at would be the charity's achievements in recent years. This would help get a better understanding of the charity's activities and the overall dedication of the people working there to their cause. Another thing to look at would be the ranking and analysis of the charity on certain sites like GiveWell. Their analysis is based on multiple metrics and can be used to check the overall health of the charity.

The less administrative cost can surely be used as a metric to give brownie points to a charity as it would mean that the funds get utilised efficiently. But, in my opinion, they shouldn't be used as a qualifying criterion. Just because a charity has high administrative costs doesn't mean that it's not good. They just might require the funds more.