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Charity Donors Demand Low Overhead Spending

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Sixty-two percent of American donors feel a great deal or fair amount of confidence in public charities, and more than 80% consider their work to help people very good or somewhat so.

At the same time, a new poll commissioned by The Chronicle of Philanthropy found significant concerns about nonprofits’ spending. A third of respondents said they did a poor or bad job spending money wisely, and 41% said their leaders were paid too much.

Half of donors surveyed said they looked very closely for low spending on salaries, administration and fundraising before writing a check. Another 34% said this was a somewhat important consideration.

For the study, Princeton Survey Research Associates International surveyed 1,000 adults in June, asking several questions identical to those included in polls that Princeton conducted from 2002 to 2008 on behalf of Paul Light, a professor of public service at New York University.

The Chronicle said confidence in charities was nearly the same as in 2008, when 64% of respondents expressed a great deal or fair amount of confidence.

Other Findings

Researchers asked respondents about charities’ effectiveness and spending habits. Twenty-five percent said nonprofits did a very good job helping people, and 18% said their programs and services were run very well.

But only 13% approved of the way charities spent money.

Those who faulted charities on spending money wisely were asked what made for unwise spending. Thirty-seven percent cited salaries and other administrative costs, and 11% named advertising.

More than two-thirds of those polled said their giving was influenced by evidence that a charity’s programs were effective.

Fifty-four percent looked to favorable ratings from watchdogs, 50% wanted to see low overhead spending and 39% favored a charity whose cause was personally meaningful to the donor.

Seventy-five percent of donors in the study had a strong opinion about tax breaks: No donor should get a bigger one for having contributed to an organization that helps the poor; everyone should get the same benefit.

Researchers found some significant demographic differences in views toward charities:

  • 65% of millennials vs. 54% of respondents 65 and older were positive
  • 66% of women vs. 57% of men expressed confidence
  • 73% of college graduates vs. 56% of those with only some college were positive
  • 38% of Republicans and  27% of Democrats said charities did a mediocre to bad job spending money wisely
  • The view that all donations should get the same tax break was shared by 90% of those earning $50,000 to $74,900 vs. 70 to 79% for those in other income groups
  • 62% of those earning at least $75,000 and 43% of those earning $30,000 to $49,000 said low overhead spending was very important.

— Check out 10 Worst Charities in America on ThinkAdvisor.