MONEY charitable giving

How to Give Smarter in an ALS Ice Bucket World

Ice bucket challenge
Tournament Director Anne Worcester takes the ALS Ice Bucket Challenge with the help of Tennis players Simona Halep, (left), Caroline Wozniack, (centre), and Petra Kvitova, (right), during the Connecticut Open at the Connecticut Tennis Center at Yale, New Haven, Connecticut, August 17, 2014. Tim Clayton—Corbis

The viral success of the ALS fundraising campaign is raising questions about whether this is the best way to donate money. Here are some answers—and advice to help you make sure your contributions go to the worthiest causes.

As is inevitable with something as wildly successful as the ALS Ice Bucket Challenge—a stunning $62.5 million has been raised for the ALS Association from July 29 through August 23, vs. just $2.4 million for the same period last year—a bit of backlash is developing, and thoughtful voices are starting to raise concerns about the charitable giving campaign’s message and impact.

Among them: MONEY reporter Jake Davidson, who wrote an opinion piece for in which he pointed out problems with the way the campaign is crafted: Folks are asked to donate money to help battle ALS or pour a bucket of ice water on their heads; if taken literally, all those funny videos of celebs and Facebook friends would be of people who prefer being cold, wet, and uncomfortable to helping to fight the disease.

Davidson, whose father died of ALS, also questions how much the campaign has actually educated people about the disease since many of the videos don’t mention ALS or treat it as an afterthought to the main event, a point that Slate’s Will Oremus also made. And Will Macaskill, a research fellow in moral philosophy at Emmanuel College, charges on that such trendy fundraising drives ultimately end up cannibalizing giving to other causes.

Well, here’s the good news for those of you who have donated to ALS charities in the wake of the Ice Bucket Challenge: According to, which evaluates nonprofits, at least some of your fellow new donors are taking the time to learn more about the disease and the organizations that help fight it. Page views on its site for the ALS Association, the main charity behind the campaign, were up to 16,000 through the first 17 days of August, an 8,500% increase compared to the same period last year, reports Charity Navigator’s Sandra Miniutti.

You can also feel good about the organization you’re donating to: The ALS Association receives Charity Navigator’s highest four-star rating, and devotes about 72% of the money it raises to the programs and services it provides (the rest goes to administrative expenses and fundraising costs). (Check out the group’s page on Charity Navigator here.)

What about the charge that the money raised by the Ice Bucket Challenge for a relatively rare disease (30,000 affected in the U.S. by the ALS Association’s estimate) takes money away from groups working to fight more prevalent illnesses, such as Alzheimer’s (which affects 5.2 million patients in the U.S.) or diabetes (25.8 million)? Well, there’s a reasonably easy fix: Make a donation to charities that help battle those diseases as well. The Alzheimer’s Association, for instance, also receives a four-star rating from Charity Navigator.

Or give money to other worthy causes you’re passionate about. Among those groups that consistently earn a four-star rating or other top-notch marks from Charity Navigator: The Children’s Aid Society, Doctors Without Borders, the Navy Seal Foundation, Project C.U.R.E., and the United Nations Foundation, among dozens and dozens of others.

To make sure you donate to an organization that will use your money wisely, conventional wisdom is to look up your preferred group’s financials on or and stick with ones that limit their overhead expenses to less than 20% of their budget. Bear in mind, though, that expense ratios don’t tell the whole story since some nonprofits have higher administrative costs because of the nature of their work.

You also want to look at how well the charity works to support its mission. Two sites that can help you suss that out: pulls together experts to recommend and evaluate charities in 35 different causes, and offers crowd-sourced reviews of the work charities are doing, as told by volunteers, donors, and beneficiaries—sort of like the Yelp of the nonprofit world.

This story was updated on August 24 to reflect more recent donation totals.



TIME health

We Need To Do Better Than the Ice Bucket Challenge

Ice Bucket Challenge
Boston City Councillor Tito Jackson, right, leads some 200 people in the ice bucket challenge at Boston's Copley Square, Thursday, Aug. 7, 2014 to raise funds and awareness for ALS. Elise Amendola—AP

The Ice Bucket Challenge is problematic in almost every way. It's also raised millions for charity. How can we reconcile those two facts?

I remember the first time I heard about the Ice Bucket Challenge. It was a few weeks ago when photos and videos of people dumping water on their heads began appearing on Facebook. Soon, I started to see headlines on twitter mentioning one famous person jokingly challenging another. It sounded fun.

I also remember when I found out the Ice Bucket Challenge was started to combat ALS, the neurodegenerative disease my father died from 18 years ago. That was last Saturday. Initially, I was overjoyed all this attention was now focused on ending a disease that had caused me so much pain. My favorite hockey stars were participating, and Ethel Kennedy even challenged the president to douse himself.

But when I looked closer, I became uneasy. No wonder it took me weeks to learn the Ice Bucket Challenge was linked to ALS. Most of its participants, including Kennedy and Today’s Matt Lauer didn’t mention the disease at all. The chance to jump on the latest trend was an end in itself. In fact, the challenge’s structure seems almost inherently offensive to those touched by ALS. Here’s how the ALS Association describes the rules:

The challenge involves people getting doused with buckets of ice water on video, posting that video to social media, then nominating others to do the same, all in an effort to raise ALS awareness. Those who refuse to take the challenge are asked to make a donation to the ALS charity of their choice.

That means everyone you’ve ever seen dump water on themselves, per the rules, is not asked to donate. They may choose to, but the viral nature of this fad appears centered around an aversion to giving to money. “Want to help fight this disease? No? Well, then you better dump some cold water on your head.” The challenge even seems to be suggesting that being cold, wet, and uncomfortable is preferable to fighting ALS.

Ice Bucket defenders would argue this is all just meant to “raise awareness,” meaning those who participate are still doing good without donating. ALS needs all the awareness it can get, but somehow I doubt many learned a whole lot from contextless tweets of wet celebs smiling and laughing.

But here’s where my argument breaks down. Problematic elements aside, the Ice Bucket Challenge has raised $2.3 million since July 29th. That money will go towards treating people just like my father, and maybe one day, finding a cure. So do the ends justify the means?

After thinking long and hard about it, my short, reluctant answer is yes. I’m not going to stand here and try to stop a trend that is doing so much good. I’m also encouraged by an increase in the number of participants who I’ve seen at least mention ALS alongside their tweets and Facebook posts. I plan on participating myself, and I urge everyone reading this to join me. You can donate to ALS research here.

But at the same time, I can’t help but feel this challenge could have done so much more good if it were structured differently. Maybe people could dump ice water on friends who haven’t donated as goofy way of encouraging others to give, or dump water on themselves before promising to donate. Maybe helping ALS could at least have been presented as something other than a consolation prize.

Articles like this one, reductively titled “Stop hating on the ice bucket challenge — it’s raised millions of dollars for charity,” miss the point. In an age where hashtag activism and information-free awareness campaigns are becoming more and more common, we should be very conscious of how to make viral trends as useful as possible.

The Ice Bucket Challenge has done a lot of good. Let’s make sure the next one is even better.

MONEY Charity

How to Tell a Do-Gooder Friend You Can’t Donate. Again.

Have a pal who's soliciting for a pet cause every other week? Use these conversational cues to decline without coming off as callous.

Got a friend who fiercely invests time and energy in a charitable cause—and always hits you up for donations to it? Supporting an organization your pal cares about feels good at first, but you may not have enough funds or passion for this particular charity to keep shelling out for gifts.

Your friend may not realize that repeatedly soliciting contributions from you is making you uncomfortable. “What’s blinding your friend? Probably their enthusiasm,” says Maggie Baker, a financial psychologist and author of Crazy About Money. Of course, the fact that your friend’s request is heartfelt makes it all the harder to say no to him or her.

Here’s how to gracefully put an end to your donations without losing a friendship.

YOU SAY: “I am so impressed by all the volunteer work you’ve been doing. I admire your commitment.”

Open the conversation by applauding your friend’s dedication to the cause, says Baker. If you’ve made your friend understand how supportive you are before you decline a request for money, your decision won’t seem like a personal rejection.

YOU SAY: “I’ve run through my budget for charitable donations this year, so unfortunately I can’t make this a priority right now.”

You don’t have to tell your friend all the nitty gritty details of your finances—or even that you don’t agree with the philosophy of the non-profit or political candidate that he or she is backing. Explaining that you’ve exhausted your giving budget this year will reinforce that your “no” is not personal and help you avoid any unpleasant locking of horns about your divergent opinions.

Another diplomatic response: “It’s great you’re doing that, but I’m very careful about how I budget for charity,” suggests financial therapist and money coach Amanda Clayman.This allows you convey to your friend that you have other priorities when it comes to charitable giving.

What if you don’t have a budget for your charitable spending? This is a good time to create one. “It’s helpful to have a budget,” says Neal Frankle, a financial planner and author of Why Smart People Lose a Fortune. “When that budget is up, it’s up.”

Related: How do I set a budget I can stick to?

YOU SAY: “I hope you understand where I’m coming from. For now I won’t be able to contribute any more to this cause, but thanks for thinking of me.”

Be polite but firm. Avoid over-apologizing for having different financial priorities. “Don’t try to manage other people’s feelings,” says Frankle. “If you approach someone with honesty and compassion, hopefully they’ll reciprocate.”

Though this might seem like an uncomfortable conversation, financial psychologist Brad Klontz says it will likely benefit both parties. “Being really honest with your friend is a test of the strength of the relationship,” says Klontz. “The person may be mortified that to find out he’s making you uncomfortable.”


Make Your Charitable Giving Go Further

Not knowing how their money will be spent causes some people to hold back from giving to charities. Photo: Adam Voorhes

Most of us feel generous in December, the top month for charitable donations, reports the Atlas of Giving. But regardless of when you give, you want to make sure that the funds are actually used to do real good.

“Not knowing how their money will be spent sometimes holds people back from supporting a charity,” says Jason Franklin, who teaches nonprofit management and philanthropy at New York University and is executive director of Bolder Giving, a nonprofit focused on helping Americans give more effectively.

Meanwhile, recent news reports that major charities employ telemarketing firms that eat up more than half of funds raised may not have inspired confidence to open up your wallet.

Use this guide to make sure the maximum amount of your donation is going toward a deserving cause.

Sharpen your focus

A 2012 study from the Chronicle of Philanthropy reports that the median amount American households donate to charity each year is $2,564. That’s a nice chunk of change, but not if you’re divvying it up among dozens of organizations.

“For every gift, there are fixed costs associated with stewarding and tracking it,” adds Patrick Rooney, director of the Center on Philanthropy at Indiana University. “So the smaller the gift, the larger the percentage that goes to transaction and administrative costs.”

Related: Tighten up Your Holiday Spending Budget

Don’t want to limit your donations to one or two organizations all year? Franklin suggests using the 50/20/30 rule: Half your giving should be focused on one charity — the gift you’ll spend the most time thinking about. Then set aside 20% for small impulse gifts and the final 30% for institutions you support on a regular basis, like your alma mater or your church.

Get with the new thinking

For the past decade the conventional wisdom has been to look up your preferred organizations’ financials on or and stick with ones that limit their overhead expenses to less than 20% of their budget.

But expense ratios don’t tell the whole story — some nonprofits have higher administrative costs because of the nature of their work, says Fred Setterberg, co-author of “Giving with Confidence: A Guide to Savvy Philanthropy.” (Note: Anything above 25% should still raise a red flag, says Franklin.)

Today, organizations that vet charities are increasingly focused on figuring out which ones are doing the best work to support their mission, says Sean Stannard-Stockton, a Burlingame, Calif., financial adviser who specializes in charitable giving.

Two sites can help you suss that out. (recently acquired by GuideStar) pulls together experts to recommend and evaluate charities in 31 different causes. offers crowd-sourced reviews of the work charities are doing, as told by volunteers, donors, and beneficiaries — sort of like the Yelp of the nonprofit world.

Also dig into the organization’s website yourself to see how it frames its goals: Specificity is important, says Jacob Harold, who formerly led grantmaking for the Hewlett Foundation and is now the CEO of GuideStar.

Related: How do I set a budget I can stick to?

A charity that says it’s going to train 10,000 people in East L.A. and ensure that 4,000 will get jobs between now and the end of 2013 is likely to spend your donation more carefully than one that says it’s “going to end poverty.”

Pay the old-fashioned way

Credit card and other processing fees can eat up as much as 5% of your donation to a charity — so when you can, write a check or issue one through your bank’s online bill-paying system.

A charity you love phones to ask for money? It’s best to say no — the telemarketing firm will get a cut of what you donate. The exception: Telethons that are run by universities or public broadcasters typically don’t eat into the funds raised, but it’s still best to send a check directly to the organization.

Once you do, get a receipt to deduct contributions. For donations of $250 or more, you also need a note from the charity stating whether goods or services were provided in exchange for the gift. After all, ’tis better to give and receive.


Tell the Billionaires Where to Give

As you’ve probably heard, billions of dollars will be flowing into charitable organizations worldwide in the coming years, thanks to the Giving Pledge, a project spearheaded by Warren Buffett and Bill and Melinda Gates.

Thus far, about 40 U.S. billionaires have agreed to give away at least 50% of their wealth, according to the Giving Pledge. And while the Giving Pledge hasn’t released a tally, estimates that America’s wealthiest will give away an additional $120 billion or more in the years to come.

Considering that the total charitable giving in the U.S. has been hovering at about $300 billion per year for the last few years, according to the Giving USA Foundation, the amount pledged represents an astounding increase. While many billionaires will continue to give to causes they hold dear, perhaps some will be open to suggestions.

Speak up!

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