How nonprofit organizations spend your donations

Every time you donate a dollar to a special cause somewhere in the back of your mind you wonder where that money is going. Fortunately, all not for profit and nonprofit organizations are required to post information about where the money they collect is spent. Before you donate, you should carefully review all information to find out just how much of your donation is going to real people and how much is going out in other expenses. Let's take a look at some of the typical expenses incurred by various causes and how they spend money.


There is no doubt that most organizations need to spend money to let you know they are looking for money. Advertising is not generally free and many causes will spend money advertising for your dollars. Even though a number of causes can obtain free advertising from a variety of sources, there are still expenses incurred.


Like it or not, various causes do have substantial salaries to pay. Salaries are incurred for CEOs, CFOs, grant writers and others. Regardless of the size of the group behind a cause, money is almost always spent on salaries in one form or another.


We have all seen major fund raisers for causes such as "$100 a plate dinners", "Walks for...", "Phone Drives for..." and other such fund-raising methods utilized by some of the most popular causes. These events do not run themselves nor are they without their costs. Often there are event managers who are
hired to run these events, hotels that must be rented and paid for, advertising, and other expenses including token gifts to participants.


Many causes have monthly magazines, mail out full color glossy coated annual reports and also provide pre-printed envelopes for donations. The cost of printing this material is not small. The argument could be made that mailings, annual reports and other such items are not needed with the internet. The fact of the matter is however, that many worthy causes feel that if something is sitting in your mailbox you are far more likely to respond to their slick advertising promotions than to an email plea.


You might be shocked to realize how much money various causes will pay for fundraising. The numbers can be upwards of 30 to 40 cents on each dollar that a professional fundraiser is able to secure in donations. Fundraising professionals will often put on shows including charity wrestling matches, concerts and other similar events. The irony is the charity that elects to do this type of fundraising is generally doing it because they do not have a sufficient local base of donors that would give otherwise.

Unfortunately, administrative costs of one type or another can mean that your hard earned and sincerely donated dollar turns into pennies when it comes to actually helping someone. Understanding how your favorite causes spend money is a responsibility you should take seriously. Many charities operate with very low administrative budgets while some can take upwards of one third or more of each dollar donated. Check out Charity Navigator to find out how well your favorite cause uses your donations.