If You Want To Give Money To Charity, Donate Locally

Massive charities have become hedgefunds for the rich.

A charity is allowed to hold money and reinvest it in ways that allow the charity to operate in perpetuity.

Charities take money and put it into stocks, annuities, and even hedgefunds.

This is typical of most massive charities, and there’s nothing wrong with saving some money in case of emergency. On a smaller scale, as middle-class Americans, we may have a few thousand in our savings accounts just in case our car’s transmission shits the bed and we’re stuck with $5,000 surprise bill.

Similarly, if there was ever a risk of Shriner’s Children’s Hospital going belly up, having $1b in investments may be able to save the national hospital chain.

Now, I’m not going to attack children’s hospitals in this blog. Because even though they may apportion a suspicious amount of their revenue to multi million dollar salaries, marketing campaigns, and conferences, at the end of the day these hospitals are saving the lives of children for free.

And you may say, well, exploiting moral responsibility and gaslighting individuals into thinking they’re the reason a child will die if they don’t add one measly $1 to their Walgreens purchase, is part of a shady marketing tactic baked into their business model.

And to that I say – screw it, I don’t care.

If someone waves a sickly puppy or dying child in front of my face, I’ll pay the damn dollar.

I stayed in a Ronald McDonald house once and one of the kids there died. I can’t imagine the feeling of leaving a hospital after you learned your kid just died, that first step onto the sidewalk pavement, the walk to the car, the drive home to your kid’s empty room. Being unable to even make funeral arrangements because you’re physically in shock.

It’s a horror that makes you question the existence of god. And for that reason, I have no beef with non-profit children’s hospitals. (but for the record they engage in shady business)

How Do Non-profits Work?

Non-profits are businesses! Make no mistake, they are very profit oriented. They give out loans to other organizations and charge interest, they rent properties, they hold ownership interests in for-profit companies, they keep money in off-shore accounts, they invest in hedgefunds, universities, and other non-profits that engage in the same profit-making activities.

It’s not always an inherently bad practice, they need money to support their charity work.

But today, non-profits are more concerned about operating in perpetuity (hoarding wealth), rather than addressing the urgency of their causes.

Non-profits also utilize “Donor-Advised Funds” which are another wealth hoarding mechanism used by the rich to promote personal aims. The IRS recognizes the abuse of DAFs and has recently pledged to crack down on them.

So if you had a choice to donate to ASPCA, where almost a quarter of their revenue is spent on marketing and their top earners are making over a million dollars… or a local non-profit that helps rehabilitate cute animals and wildlife in your OWN community…

I’d say in that situation, eff the ASPCA.

Why donate to another vehicle of the rich? Just because they waved a mange covered puppy in your face?

There are plenty of mange covered puppies in your neighborhood who need the money more.

What About Large Local Non-Profits

Don’t donate to any large, state specific non-profit.

These non-profits get 99% of their revenue from government contracts, and 1% of their revenue from you. What you give is a drop in the bucket.

You can always google a non-profit’s “990” filing and see where they get their money and how it’s spent.

In Springfield, Gandara and CHD are two of the biggest non-profits. Literally like 90% of their revenue is from state contracts (i.e. YOUR tax money.) You already donate to them every week when the state of Massachusetts takes out $200 from your paycheck. Why donate more?

And if they ever had a budget crisis, the state would simply give them more money and increase your taxes.

The Bottom Line

It’s your money, donate to whoever you want to.

But if you are being charitable PLEASE don’t overlook local non-profits who could really benefit from the money. Giving $5,000 to Gandara or CHD is a drop in the bucket for them that’ll be spent on some intern’s summer job as a social media specialist.

$5,000 to a local animal rescue can be world-changing.