Making Donations to Research Foundations: How to Avoid Getting Swindled

Have you ever wondered where your monetary donations to research foundations like the American Heart Association, the Breast Cancer Research Foundation, or the Lymphoma Research Foundation actually go? Have you also ever worried about charities misusing your hard-earned dollars? This article outlines how most agencies use donated monies, as well as what you can do to avoid being swindled.

Most foundations use your donations in two ways: for the creation of grants and for the payment of overhead costs. Research funding organizations are charged with collecting donations, creating grants from those donations, distributing the monies to qualified parties, and tracking the spending of those monies. There are also administrative and overhead costs to running the organization itself; staff salaries, building rent, electrical bills, etc. all need to be paid.

Ideally, a research foundation should have low overhead costs. Some organizations, like the Gateway for Cancer Research, uses only one penny from every dollar donated for overhead costs. Other foundations are not as thrifty; however, one good way to find out how much an organization is spending on itself is to actually go and visit it. Web sites and earning statements tell only part of the story; if, upon entering the charity organization, you see a lavish building, complete with oak-trimmed conference rooms and under-secretaries for secretaries, then you can very well guess that your donation isn't being used as intended.

Still, it doesn't hurt to look at a charity's expense report and find out just what is defined as a donation. For example, the United Way of America foundation has been known to count contributions that were raised by competing organizations in shared campaigns. This leads to "double-counting", where different organizations count the same contributions. By the artificial inflation of United Way's total contributions, expenses appear to be smaller than they actually are in reality. Furthermore, United Way has been known to direct its members to count as contributions the monetary value of a volunteer's time.