Five years ago Marina Glogovac’s son Luka was a member of the Toronto Lynx Juniors, a team in the professional United Soccer League, which acts as a feeder to the top pro league in North America. But at the age of 17 he started to suffer extreme thirst, extreme weight loss and other symptoms.
A visit to the doctor threw his future in sports into question: Luka had type-1 diabetes. “He was crushed,” says Glogovac. Luka thought his diagnosis would prevent him from being able to play sports at a high level again. If he could, would he excel or even be allowed to push himself?
In Canada there are at least 20 charities that focus on diabetes, but none seemed particularly well suited to help Glogovac’s son get back into sports until they found one run by a former Olympian who also helps people cope with the disease. “It was life saving for us,” she says. Luka just graduated from Ryerson University where he was an Ontario all-star on the Ryerson Rams soccer team.
It was life changing for Marina, as well. Shortly after Luka’s diagnosis, Glogovac went from consulting with venture capitalists and start-ups to head up CanadaHelps, a not-for-profit social enterprise that facilitates donations for any Canadian charity.
In Canada there are more than 86,000 charitable organizations. Many are like the one Glogovac’s son turned to—small, niche operations run by passionate people doing admirable work on a shoestring budget. But when it comes to donating to a cause, most Canadians focus on the largest and most recognizable charities.
For the past seven years raising the profile for successful charities across the board has been the inspiration for our annual ranking of the largest charities in the country—the MoneySense Charity 100.
There are so many great and inspiring organizations worthy of attention, so this year we’re expanding our ranking to include all organizations that raise a minimum of $1 million a year to our report. Even at this modest sum only a little over 400 organizations meet the threshold. In fact, four out of every five charities in Canada collect less than $500,000 in revenue each year and 86% of those organizations have less than five staff. (We graded the largest 100 organizations, but you can find a full searchable list that includes approximately 300 additional charities online.)
A closer look at some of the smaller organizations offered up some insight into how efficiently run they are versus the larger charities. Our survey found that in aggregate, smaller organizations scored more As for charity efficiency (a measure of how much goes directly to the cause) than their larger counterparts.
That fate doesn’t surprise Glogovac. “Small organizations are living in this endless fear that their admin ratios will rise and they will not get any money,” she says. That’s not always the case at the larger charities, which Glogovac says can struggle to remain effective as they get bigger in size. But she doesn’t mean to be overly critically of larger charities.
She points out that these charities are tackling larger problems and need their infrastructure—but there is room for improvement. It’s not unlike a big corporation which doesn’t always spend money in the most effective way. Case in point, some of the larger charities have bloated marketing departments, a luxury few large businesses can even afford these days.
When it comes to charities, bigger isn’t always better. “You can have big charities that are great and terrible and you can have small charities that are great and terrible,” says Mark Blumberg, a partner at Blumberg Segal LLP who specializes in non-profit and charity law. Judging charities solely on ratios can create a false perception.
Consider the health-care charities, which some refer to as “the Hunger Games of fundraising” because they are fighting for attention in a crowded marketplace. Competition drives up costs. “If you have a disease where a lot of people are afflicted, you are more likely to be successful with fundraising. But if you have a totally incapacitating illness that only affects 100 people a year you are probably going to be far less effective at fundraising,” says Blumberg.
In some ways, there is an argument to support smaller charities that are struggling to get the funds to achieve their mandate. Blumberg presents the following quandary: Should you give to the biggest charities, because they are already well-funded or would you be better off giving to a smaller organization and help them to actually turn from mediocre to great?
Thanks to CanadaHelps, smaller organizations are now able to draw on some of the same fundraising tools that large organizations employ to make it as easy as possible for people to donate to their cause, such as accepting donations of stocks, hosting events and setting up regular payments so you can better manage your giving throughout the year. CanadaHelps is a not-for-profit social enterprise that operates as a sort of one-stop shop for Canadians to discover, donate and fund-raise for any charity in Canada.“We’re like Shopify for small charities,” says Glogovac. This year it will process $140 million in donations.
Before you make your next gift, here are a few key factors for consideration to help you evaluate whether your money will be put to good use.
Most donors would like to think charities are run by volunteers who work in donated spaces. The truth is it costs money to run these organizations. They have to pay for staff, buy equipment and secure office space before they can even try to deliver on their mandate. Some even manage millions of dollars, so paying for top talent to get the most out of your donation dollar is a no-brainer. But those costs still have to be reasonable and the lower these costs are, the better.
That’s where charity efficiency comes in. This is a measure of how much of your money actually goes towards supporting the organization’s mission. For organizations that don’t run programs directly, such as hospital foundations, we award top marks to those that pass along 90% or more of donated money to the charity or institution being supported. But one important note: Some charities by their nature are just more expensive to run, so when you are researching a charity it’s important to compare it against an organization with a similar mandate.