In my latest on HuffPost Impact I discuss MoneySense Magazine and their 2015 Charity 100 and how it’s crap. It is well meaning in trying to help donors evaluate charities and while unintentional, it’s still crap. Here’s an excerpt:
MoneySense recently came out with their 2015 Charity 100 under the title “A Smarter Way to Give,” where they assign letter grades to the 100 biggest charities in Canada after assessing four areas: program spending efficiency, fundraising costs, governance and reserve fund size. This seems like a good thing right? A reputable, financially focused magazine doing an analysis of charities to help donors make smarter decisions. What’s wrong with that? It’s not about impact.
It’s about accounting. It’s about cost control. It’s about financial outputs.
The biggest problem here is that “charity efficiency” is measured by how much money an organization spends on programs compared to its total expenses and not by how much impact it creates compared to its total expenses.