Wednesday, December 30, 2009

2009 Religious Humanitarian Charities Research

Each religious charity claims to provide aid in Christ’s name. In other words, they claim to use gospel principles designed to provide help to those in need. Each claiming the same way Christ would give aid if he was here right now. There are vast differences in the principles each charity currently uses when giving aid and helping the needy. Although helping people in need is a great cause regardless of what service you provide, some methods and principles are much more effective and inspiring than others. This report attempts to explain a few of those differences using five of the largest religious charities in America for 2008.

Note, this is written by a member of the Church of Jesus Christ of Latter Day Saints and is biased toward that church.

This graph below shows the actual size of each charity in income for 2008. This includes the donations from members of the church or charity. Other income in the form of fundraisers and so forth is not included in this graph.

The first principle is Administration Costs
Every non profit organization or charity has administration costs associated with their work. Employees work for the organization when providing charity to others. However, most charities view administration costs as fair and feel justified by using the actual charitable donations from people for their own salaries. This adds up to hundreds of million of dollars each year spent solely on administration costs rather then actually helping the poor. The greatest argument I’ve seen is when I present a way for these organizations to be able to operate just as well by having 0% administration costs but they brush it of as impossible or it’s not important.

The LDS Humanitarian program is the only charity I have ever found with essentially 0% administration costs. They rely heavily on volunteers to perform their work, including over 4,000 humanitarian missionaries who use their own resources and money to support themselves while providing aid for others. They operate several key services including bishop storehouses which provide direct food to the needy. One key principle they include here is self reliance. So all food given to the needy is grown, packaged and given solely by the LDS humanitarian program. This involves farms and volunteers to tend the farms, volunteers to package the food products and resources to ship the products to the needy. A few paid employees manage the farms or ship the products to the storehouses add to a total of 2.2% administration costs. However, using the principle of all donations go directly to the needy, the charity uses the profits from several key businesses to pay for all administration costs. Administration costs include salaries, shipping expenses and even the costs associated with store rentals and capital investments.

Below is a graph demonstrating the amount of donated income goes toward their own salaries. This has improved greatly from 2007 when LWR (Lutheran World Relief) and ADRA (Adventist Relief Agency) had administration costs over 15% each. CRS (Catholic Relief Services) has been steadily at the lowest from 6.8% in 2007.

Not shown here but one more principle is the amount administrators earn while working for their charities. Several managers of charities often earn $150,000 plus a year. This might be discussed in greater detail after more research.

The second principle is government grants
Another common choice made by religious charities is the concept of receiving free money in form of government grants. However, no money from the government is ever free. It is money earned by individuals and taken in the form of taxes without their choice. So in logical essence, individuals who might not have any desire to donate money to these specific charities are forced to simply because the charity requested it by filling out the proper forms.

Below is the dollar amount given to each charity in 2008 from the Federal Government. This adds up to billions of dollars a year.

In addition, some charities now rely heavily on these charities just to stay in the black and continue to operate and pay their employees. Below is a chart of how much of their donations come from government grants as a percentage of the total income. CRS is the largest at 42% of their income comes from the government.

The LDS Humanitarian Program follows the principle of self reliance again and the principle of separation of church and state. No one should be forced to pay for their charitable work and the charity does not want any influences from the government or any other entity over them. This has proven to be a very good principle to follow.

The LDS Humanitarian Fund is the only charity to use these two principles when giving aid to the needy. Several other key principles are not discussed in this report. Such as, how effective is the aid given to the needy. And does the aid given to the needy create self reliance or only dependence? Which charity is more effective and successful when comparing the principles they follow?

References Seventh Day Adventist 2008 Annual Report Lutheran World Relief 2008 Annual Report Catholic Relief Services 2008 Annual Report Salvation Army 2008 Annual Report LDS World Service Fact Sheet 2008 for LDS Humanitarian Program

Last updated: December 30, 2009


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