Feeling Generous This Holiday Season? Remember Not All Charities Are Created Equal

After the chaos and turmoil this year has brought, “Giving Tuesday 2020,” which took place Dec. 1, was projected to yield more than $605 million in charitable donations — more than $200 million more than the year before. Yet, while the holiday season inspires philanthropy for many, not all charities are created equal. Some of the U.S.’s best-known philanthropic organizations have found themselves entangled in scandals that have revealed corporate greed, employee exploitation, and a history of being unethical and hypocritical behind closed doors.

In 2013, NBC revealed that Goodwill Industries — an organization worth nearly $6 billion — was paying some employees with disabilities “penny wages.” Reports on actual wages varied but the figures were incredibly low across the board — from $4 an hour in some instances to as little as 22 cents an hour in others. The public was rightfully outraged and confused as to why an 80-year-old law, which allowed organizations to pay employees with disabilities less than minimum wage still governed an organization claiming to do charitable work. Protests and petitions demanding change circulated widely, but nothing was done on a corporate level.

Tainted by the ongoing scandal, CEO Jim Gibbons resigned in 2018 to “pursue new opportunities.” Gibbons, who also has a disability and had helmed the company for more than a decade, was said to be making $730,000 a year when he left his position. And even after his departure, little has changed to right that despicable pay gap. Still, legal experts are chipping away at it. In November 2019, Goodwill Industries of Greater New York and Northern New Jersey settled a workplace discrimination lawsuit for $65,000 after a former employee with a disability said he was let go for making mistakes after not receiving the training he needed.

Goodwill is not alone in these kinds of scandals.

In 2018, The Salvation Army reported earning more than $4 billion in revenue. The organization, which describes itself as “an evangelical part of the universal Christian Church with a message based on the Bible” has been known to widely discriminate against LGBTQ individuals rather than offering them aid. They’ve historically rallied around the world against LGBTQ rights, and have shut down their services in areas with anti-discrimination laws despite saying they do not discriminate and advertising services for LGBTQ people. This, even as LGBTQ youth make up 40% of the U.S.’s homeless youth population, according to True Colors United.

In 2017, a homeless transgender woman posted a Twitter thread that went viral. “As a homeless person staying at a salvation army shelter … Please don’t donate to the salvation army,” she said. She went on to outline rampant bullying and verbal abuse; condescending treatment by RAs; women being kicked out for standing up for themselves; women with mental illness symptoms being thrown out; and residents being forced to live in unclean conditions.

The American Cancer Society has also come under fire for potential charitable misdeeds. In 2018, the group’s executive vice president and chief medical officer, Dr. Otis W. Brawley resigned over concerns that the organization’s fundraising partnerships, which bring in $728 million a year according to Forbes, were promoting questionable health practices.

According to a 2013 CNN article, the Kids Wish Network — which raises millions of dollars in donations to help grant wishes to dying children and their families — spent less than 3 cents for every dollar donated actually helping those in need. The report of America’s 50 worst charities CNN referenced was originally published by the Tampa Bay Times and the Center for Investigative Reporting.

In 2016, the Cancer Fund of America, which also ranked high on that list of “worst charities” agreed to shut itself down due to its abhorrent financial practices in which more money went to lavish vacations for higher-ups within the organization than to sick people who needed help.

These are just a few examples of the rampant abuses that exist within some parts of the “charity” sector. While Americans donate an estimated $449.64 billion to charities each year, some of the largest charities are plagued by grifting and dishonest behavior.

Knowing that, deciding what charities are ethical and worth donating to can prove to be a minefield. Fortunately, certain resources like Charity Navigator can help givers make more intelligent, well-informed decisions. Charity Navigator also allows users to type in the name of any American charity and get numerical ratings on its practices. The database uses data to evaluate the charity’s financial health, accountability and transparency.

The Kids Wish Network, for example, received a zero rating on Charity Navigator. It should be noted that the site cannot rate some organizations with religious affiliations — such as the Salvation Army — because they are exempt from releasing data under the Internal Revenue Code from filing the Form 990.

Charity Navigator has also compiled a list of highly-rated nonprofits providing aid to communities in the midst of the COVID-19 pandemic and organized them into areas such as medical help, education and local organizations.

Between the pandemic and protests against white supremacy and police brutality that defined 2020, donating to small organizations, collectives and even individuals instead of giant charitable groups has also grown in popularity. During the height of protests in June 2020, for example, community bail funds throughout the country received such a surplus of cash that many — like the Brooklyn Community Bail Fund — briefly stopped accepting donations and encouraged people to send their money elsewhere. Mutual aid (or giving money or services directly to community members who are struggling) has also continued to grow in popularity. Sending help from neighbor to neighbor, rather than to large corporate charities, can help to cut out the middlemen during crises, reducing the risk for fraud and increasing the good your charitable dollars can do.

Fair360, formerly DiversityInc has alliances — through both donations and advertising — to dozens of diversity-related charities and organizations. Conexión, one of the organizations Fair360, formerly DiversityInc currently works with, has 4/4 stars on Charity Navigator and is well-respected for its work in assisting Latin American families.

Some other philanthropic organizations Fair360, formerly DiversityInc works with are not rated on Charity Navigator, either because they do not make enough money to be considered or because there is not enough data available on them.

However, the best ways to holistically evaluate the ethics of a charity include seeing if financial information is made transparent, identifying leadership and board members, identifying main supporters (and possible conflicts of interest) and doing research on the results of the charity’s work. It’s a small extra step in making your donation but it can also be the key to making sure the charities you choose to support are really making the greatest possible difference for the people they serve.