June 27th, 2012
I have only one simple thought on this matter, so I won’t belabor the point. In my opinion, every charity that you contribute to, should have an open website, and should have its financial statements available for everyone to see. Not available by demand, not behind a login page, but just open to everyone, right on their website.
Recently I decided to renew my annual contribution to Nishkam, but when I went on Nishkam website, I couldn’t easily find their financial statements. Perhaps the website had been moved around a little. So, I sent them a nudge and told them that I would like to contribute, but I need to review the financial statements. And I got the response right away with the link to their financial statements, along with how to navigate to it. My bad, Nishkam’s financial statement was always there, but I hope everyone does this, there is no shame in asking for the financial statements.
December 12th, 2008
I am neither a prolific charity giver (I stay within my means), nor a very educated person on how to review charities. All I try to do is to give to two charities each year, and just research a little bit about them. I have made some simple observations that I share herein.
Most of the charities have detailed websites, where you can find all sorts of information about what they do, how they spend money, and their financial details. I simply refuse to give to any charity that does not have its full financial worksheets on the web. If they say you can request it, that is not enough – it should be on the public website, requiring no special request.
One of the charities that I have given to in the past is Nishkam. I like what they do, and I like that they have their full financial sheets online. However, I have noticed an interesting aspect. In 2007, essentially, Nishkam’s bank reserves grew quite a bit. That is, they made enough money, but did not spend it all. This itself may be OK for two reasons: (i) In India they can perhaps get good interest rate, and a significant bank reserve can lead to a very dependable interest income. (ii) Sudden increase in contributions could have lead to the increase in financials, but obviously creating new programs takes some time. But, this increase in bank balance has some unwanted side effects too. A larger bank balance is a good motivation for “better” investment strategies, potentially leading to riskier investments (think subprime). Also, a larger bank balance may be more attractive for fraud by one bad individual. Also, one can perhaps argue that the charity organization should have enough programs in place to use the money, not horde the money.
So, my conclusion is that I am going to continue with Nishkam for one more year. Next time, I am going to review their finances again, and if they have not managed to increase the programs, I am not going to continue contributing. If you have a charity that you think is very deserving, please leave me a note.