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Efficiency
Ratings vs. Effectiveness
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On the whole, ratings are a
good thing. But when choosing charities to which
you're going to donate money, be aware that the efficiency
ratings assigned to charities by watchdog groups can be
misleading. More important is a charity's
effectiveness in getting aid to victims.
For example, Charity A may
dedicate 95% of received donations to direct material aid
and only 5% to administration and fundraising, which is
supposedly a good efficiency rating. But a good
efficiency rating means nothing if 5% isn't enough money
to get the other 95% to victims where and when they need
it. The 95% has to be not only raised to begin with,
but properly administered, properly managed.
Otherwise it simply sits in Charity A's bank account,
perhaps collecting interest, but definitely not providing
water, food, medicine, clothing, shelter, counselling, and
other aid to the victims, immediately and directly.
Charity B, on the other
hand, may dedicate 20% of your donation to administration
and fundraising, but that 20% may very well be
competently, efficiently providing the other 80% of your
donation to victims within a day after you've given it, or
even within hours, in the form of water, food, medicine,
clothing, shelter, counselling, and other aid.
Charity B's so-called efficiency rating by a watchdog
group may not be as high as Charity A's, but Charity B is
a much more effective provider of aid. And,
arguably, the more effective an aid group is, the more
efficient it actually is, too, watchdog ratings and their
definitions notwithstanding.
Take Oxfam, for example
(with which we have no affiliation, by the way). You
may look at efficiency ratings for Oxfam and scratch your
head skeptically. Yet Oxfam is clearly and provably
among the best relief-and-recovery aid organizations in
the world, and it has been for decades.
Therefore, don't
automatically dismiss charities because their so-called
efficiency ratings aren't as high as others'. Judge
them also by their histories, reputations, and overall
effectiveness. Finding out what's an effective,
reputable charity is homework quickly and easily done.
There are an awful lot of terrific aid organizations doing
wonderful and effective work even though they don't meet
the standards of what Watchdog X or Watchdog Y considers
efficient.
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