[yuliyp]

"only 8 cents of every dollar shows up as direct aid and grants"

That's an extremely misleading statement. For instance, a food bank giving away food to a pantry does not count as "direct aid and grants" (at least, if they're defining that as "Grants and other assistance to domestic individuals." from the I-990" ). The salary for the warehouse worker operating the food bank is also not counted in that 92%.

Other cherry-picked statements like "32% of donors trust charities less today than they did five years ago" (not giving the percentage that trust charities more, or any other way to contextualize) make it clear that this is just a hit piece.

[cowsandmilk]

I don’t even get the point of this site. They say:

> Most of this spending isn’t waste. Hospitals need staff. Universities need facilities. Even small charities need people to run programs. The problem isn’t intent. It’s that the reporting system was designed to satisfy the IRS, not to show donors where their money went.

The complaint seems to be that the form filed with the IRS has the information the IRS is interested in, not the information whoever made the site wants.

The reality is that I know how the places I donate my money and time to use their money because I’m not relying on their IRS filings to get that information. I would suggest others do the same and donate to places where they understand what the org is doing and where the money is going.

[sinkasapa]

Having a detailed and auditable report of how money is being used is really helpful for creating the understanding you are talking about. That is what accounting is for and why it is so essential to modern life.

The site is obviously just an advertisement for a weird camera surveillance system, but the concern about incomplete accounting is very real. In many places one might want to contribute to non-profit efforts, IRS information isn't even available. In my work in Ecuador, I have seen a lot of fraud, and half-baked charities. Some rich NGOs sometimes walk in on some field trip that donors have paid for, make some statements about all they are going to do and disappear without follow-up. Basically they are just tourists on a free vacation taking publicity photos. There is a specific organization that comes down to build environmentally safe toilets. Not only are these built by young middle class volunteers that know nothing about building anything but their CVs, the communities they are helping don't even need new toilets. The building supplies tend to be repurposed after the volunteers are gone, every single year. I'd like to know if I paid for that. There are seeds of merit in the program, but also unnecessary waste.

Despite negative examples, there are many worthy things that are done, and could be done in the region. Northern money can go very far in the areas I work. It can do a lot to not just improve but transform people's lives. So you suggest that an answer to money misuse is to have personal experience with any organization you donate to. How many people who have the money are going to spend any real time in Amazonian Ecuador? They aren't there now. What is going to change? Since there are few people with money who can be personally involved, does that mean that no effort should be made to better people's lives there? Obviously, that is what accounting is for. I think the article is absolutely right about that. I find their solution to be creepy and invasive. Maybe just having better auditing and reporting standards makes more sense than pointing cameras at hospital patients, but what do I know?

[master_crab]

In a similar vein if anyone thinks this is an incorrect viewpoint (it’s not):

For every combat soldier in the Pacific Theater in WWII there were roughly 4.3 support soldiers. I don’t think anyone questions the fact you needed all those people for support and not direct action.

[mtweak]

Fair point. I updated the article. The 7.7% is the "Grants and other assistance" line on the 990, and it applies to the $500B charitable nonprofit portion, not the full $3T. A food bank distributing food shows up under program expenses, not grants. The original framing was too easy to misread.

The bigger issue is that even the program expenses line doesn't tell you whether the program worked. A food bank spending $2M on operations could be feeding 50,000 people or 5,000. The form doesn't say.

[drecked]

That’s not a misleading statement for what they’re trying to say.

They wouldn’t disagree with what you say. The point they’re making is we don’t know. Maybe 92% of the remaining money is being spent usefully towards programs and 0% as overhead. Or maybe 0% usefully and 92% as overhead.

The IRS disclosure requirements are not sufficient to know. And yet we will give those donating to both organizations the same tax breaks.

The argument is to increase disclosure requirements for organizations through which so much money is passing so that we have a better idea as to how nether those tax breaks we’re giving are actually giving us any value in return.

[Retric]

The problem is there is no guarantee the warehouse worker at a food bank is doing anything of value. So we can’t assume such things are productive without direct evidence.

[bilbo0s]

I think the material point of HN User Yuliyp's comment is that the organization claiming to be providing us with "Charity Sense", for some reason is not providing us all of the data we need to make sense of charities. Even worse, it seems to be deliberately disingenuous in presenting the data it does give us.

At least provide explanations of why certain things are included or excluded from the numbers they're presenting. Why are hospitals and universities lumped in with the food bank in the first place for instance? When you remove them, the numbers and percentages radically change. Not only that, it doesn't feel like the average person sees a food bank and a university, or a hospital, (and certainly not a university hospital), as the same sort of "charity". When you start digging deeper into the numbers, it just looks like they were lumped in to make the less resourced charities like food banks look bad.

Maybe there was some other reason they had for using this amalgamation? But they should be forthcoming with what that reason was.

[Retric]

> Why are hospitals and universities lumped in with the food bank in the first place for instance?

Ask the IRS / congress, this isn’t some arbitrary grouping it’s what charity means in the US.

I do think it’s worth asking that question, but ask it of the people who can do something about it.

[bilbo0s]

The people claiming to be making sense of charities are the people who are supposed to be teasing that data out.

[Retric]

If you’re making sense of something you need to include everything in that category.

It’s perfectly reasonable to create different subdivisions / buckets based your own definitions or NTEE code etc, but all those sub categories combined must add up to the same thing as how charities are defined.

[bombcar]

> Why are hospitals and universities lumped in with the food bank in the first place for instance?

Because if you don't have shareholders and like to raise money that's not from VCs, it is convenient to have the donors get a tax deduction.

Otherwise you can run a business with little to no tax without being a non-profit.

[bilbo0s]

The question was not why did the IRS amalgamate those organizations.

The question was why did Charity Sense amalgamate those organizations.

What value is it adding if it does nothing other than report data we could get from the IRS in any case? Saying, "Hey man, we just re-post the data we get from the IRS." Is the same thing as saying, "We didn't really do any analysis."

[relaxing]

Because they’re pushing an agenda that they mean to profit from.

[mtweak]

Yes, non-profits is a superset of "charitable non-profits". The IRS puts all 501(c)(3) organizations under the same filing framework. Hospitals and universities are in there alongside food banks and shelters. Breaking them out by NTEE code gives a more granular picture is a great idea.

[Retric]

501(c)(3) is just one of 29 types of non profits defined by the IRS. Many non-profits aren’t charities and some of them can even distribute profits.

501(c)(7) IE non profit social club for example could be just about anything from knitting circle to a S&M sex club. Have that club buy property and then at some point in the future sell that property at a profit which is then distributed to those members.