Archive for Charitable Giving

My take on another popular money guru


Confessional dans la cathédrale de Bourges
Confessional dans la cathédrale de Bourges (Photo credit: Wikipedia)

There’s a lot to like about Dave Ramsey’s program, but don’t drink the Kool-aid just yet. Recently a couple of clients have come to me after attending one of his programs. I’ve read several of his books before, but this time I took a good look at his website and promos. There are a few, er, issues there.

Ramsey is what I’d call a conservative Christian, and therefore a lot of churches sponsor his programs, or religious organizations use his group to present programs for employees. But, as generations of journalists have been told, “If your mother says she loves you, check it out”. Don’t believe financial advice just because someone is a friend, or a brother-in-law, or claims to be religious.  All scoundrels prey upon trust.

I’m not saying Ramsey is a scoundrel. I think he gives excellent advice on budgeting, and has a nifty tool on his website that takes your income and instantly assigns amounts to his recommended spending categories. His recommendation of 10% to charitable donations may be a little high for some people, but hey, it’s a good goal.

I have nothing but admiration for his method of getting out of debt (the “debt snowball”) and recommend it when clients have that issue. He has lots of good info on his website about purchasing a car for cash, managing a budget, etc. Or get one of his books out of the library: there are a bunch and they basically all say the same thing.

Gosh, the guy even emphasizes the need to work with a professional planner, which I gotta love, right? Um, not so much. There’s a tab called “Dave recommends” and, well, these folks are just plain advertisers. Maybe Ramsey likes them, but they’re paying for the endorsement. And what about the financial planners (he calls them ELPs—endorsed local providers)? They’re salespeople. How do I know? Because the first requirement is that the “advisor” be regulated by FINRA. FINRA regulates the brokerage industry. Fee-only financial planners are regulated by the SEC or the State (depending on the size of assets managed). If you go to a financial “advisor’s” website site, scroll down the page to the tiniest print you (can’t) see. If it says “Securities offered through [blah-blah]. Member FINRA, SIPC” well, you’re about to be socked with commissions or some dumbo wrap account. You are NOT looking at the website of a fee-only financial planner.

How in good Christian conscience Ramsey can recommend “advisors” who are going to cost his stressed or frugal clients huge management fees, significant commissions, and nightmares transferring accounts when they finally wise up, is beyond me. Look for advice from people who have no financial interest in selling you some crap (check out, for example), or who are paid by you and are legally obligated to work for you in your best interest (fee-only advisors).

Dave needs to go to confession.

Enhanced by Zemanta

The life you save may be your own


Haitian children attend school classes provide...

Haitian children attend school classes provided by Non-governmental Agency Partners in Health, at Ancien Aeroporte Militaire Individually Displaced Persons Camp, in Port-au-Prince, Haiti, Apr. 27, 2010. The camp houses over 40,000 displaced Haitians of which about 13,000 are children. (Photo credit: Wikipedia)

Feeling a little pressed these days? Maybe your retirement savings are, oh, half what you probably need. Or that secure job doesn’t look so secure. Or your kid is suffocating under college loan payments. I’m here to tell you you’re lucky.


If you live in the United States, no matter how poor you are, you’re way better off than most of the world. College bills? At least your daughter got to learn to read. High cost of health care? You can get cataract surgery rather than being a blind beggar by the side of the road. If you get hit by a car, an ambulance will come to pick you up. Losing half your assets in a divorce? At least you can get a divorce. No, I’m not trying to make you feel guilty. I’m trying to make the point that how we evaluate our financial situation is—compared to what?

I’ve had people look me in the eye and tell me they can’t possibly live on $300,000 a year, which is true if they keep spending at the level they’re currently at. If you’re feeling poor and live in this country, you need to adjust your standards and compare yourself to a more rational standard. You will feel really and truly filthy rich if you take my recommendation: go read The Life You Can Save by Peter Singer, a bioethics prof at Princeton. Or just check out the website.

Singer thoughtfully demolishes every one of my pathetic excuses on why I don’t give to charity (at least not enough). Wasteful administration, ineffective programs, too broke, don’t know what’s appropriate, don’t know where to find good charities, can’t decide what issues are most important? Singer addresses and gives sound and thoughtful guidance on all these straw men. If you’re not writing a check by the time you finish this book (or thoughtfully read the website material), well, your name must be Newt Gingrich.

I don’t agree with all of Singer’s conclusions as to where to give, but my guess is he wouldn’t prevent you from donating to environmental causes rather than his preference—third world causes. Nothing prevents you from thoughtful giving to your own priorities. Singer does a terrific job, but I’ll add a few financial planner tips:

  1. Put your money where your mouth is. It’s a favorite leisure activity to complain about politics, how government doesn’t do such and such, ain’t it terrible, those people, etc. Donate to something you really believe in and BE the difference.
  2. Don’t scatter it all over the place. The only thing you’ll get is more junk mail. Give larger donations to charities whose mission you really care about. Maximize your investment.
  3. Just as in investing, put your money into things you understand. Take the time to check out the charity on Charity Navigator, GuideStar, or GiveWell, look at the charity’s website, or pick one where you or someone you know has worked or volunteered.
  4. Don’t be shy about touting your favorites. Singer says other people’s giving increases if they think all their friends are giving. And if you have a regular job, get that employer match!
  5. Give, but don’t feel guilty. Singer has a terrific suggested donation level scale on the website. For most of us, his suggested amounts could be accomplished without much pain on our part.
  6. Keep up with what the charity is actually doing. Many charities can be “liked” on Facebook or have an e-newsletter. Yeah, I get a ton of junk, too, but I make an effort to read about ones I’ve donated to or am thinking of, just as I try to keep up with other investments I’ve made.
  7. It’s not wrong to support charities by buying gift products or accepting membership bonuses. Of course, if you don’t need another coffee mug you can always turn it down and save them some money. But if a scarf or backpack causes you to donate more than you ordinarily would, I say go for it. Nothing wrong with feeling good while you’re doing good.

Since I can’t ever resist the temptation to give advice, I am going to suggest a few of my favorite charities—I don’t have any scientific evaluation process (other than following their activities and checking them out as above)—but you can use them to get started on thinking. Trust me, you’ll feel a lot better about your life and your financial situation in life.


The Fistula Foundation

What they do, and the condition they address, is astounding. Maybe don’t read about it before lunch if you’re a woman or have daughters.

Partners in Health

For even more information on this one, read Tracy Kidder’s book Mountains beyond Mountains. They provide critically needed community health care in many of the dirt poor countries of the world.

Village Health Works

Inspired by Partners in Health and others. Another Tracy Kidder subject—check out the book Strength in What Remains. How you can barely survive genocide and still want to RETURN to help the country that nearly killed you is beyond me. Luckily, others have more courage.


Flint Creek Wildlife Rehabilitation

They treat a ton of the busted, hurt, and otherwise impaired wildlife in this area. I don’t know how they do it with minimal staff and budget, but I’m glad they do.

WBEZ Public Radio

Okay, they’re not the poorest of the poor but I listen a lot. I’d sure miss ‘em if they were gone. Plus they give you a nifty discount member card.

Between Friends

They focus on helping victims of domestic violence. May you never need those services, but I guarantee you know someone who does.

So, I’m encouraging you to take the pledge at The Life You Can Save, and put charitable donations in your financial plan. You’ll save your sanity, ground yourself, and your life will most definitely make an impact on the world. Not such bad outcomes.


Enhanced by Zemanta

Charitable giving: It’s hard to do good

I feel ripped off, but in retrospect I saw it coming. My daughter and I had been gifted with the audio recording of Three Cups of Tea by a friend who had been inspired by Greg Mortenson and his tale of working to develop the Central Asia Institute, to bring education to the children of Pakistan and Afghanistan. It particularly touched our hearts because he focused on the most underserved—girls in these societies.

But, even when tears rolled down our cheeks, I heard a little voice inside me. Having worked in social services for a number of years, I’m always a little wary of selfless heroes with passionate obsessions. I’ve sometimes found, in the words of an old musical, that they care more about the bleeding crowd than about a needy friend. A person who appears to be immune to the creature comforts and needs that most of us have can also have an ego immune to criticism or input, and little sensitivity or tolerance for others’ human foibles. Also, such leaders (in my experience) give little attention to the daily requirements of running a responsible organization. Actually, Mr. Mortenson didn’t seem particularly sensitive, even in the book, to the needs of the women in his own life, and this nagged at me.

In my days in Washington I saw plenty of charismatic leaders who played fast and loose with the bookkeeping, not for personal profit, but because they had no training in accounting and because they were far too busy trying to promote and do good and there are only so many hours in a day. The best of them realized they couldn’t do everything and hired staff that could pick up those tasks. But with celebrity, often the money comes in so fast that there’s no time to get organized. Once, an organization in which I was working was featured in Parade magazine. We got thousands of dollars in donations from people who thought we would put them to use for children. Unfortunately, we were really an umbrella organization for local groups—essentially their advocacy group in D.C. And we had no staff to answer the thousands of letters. We detailed one already-very-busy person to it, but by the time he wrote all those letters, the donations about equaled his salary for the time. Really, none of the sincere donations did any good whatsoever.

So, what’s the point here—don’t give money to charity? Well, as the old newsman’s saying goes, if your mother tells you something, check it out. The problem here is that I DID check it out. The Central Asia Institute got a stellar rating from Charity Navigator, Mortenson’s salary was reasonable, and everything looked good. In fact, a respected journalist, Jon Krakauer, had donated a respectable chunk of change to CAI also. And he’s plenty mad about it, too. It’s also still important to remember that all the facts are not yet in, but really, it doesn’t look good and I’m sure I’m not the only one who’s thinking maybe there are other places to put money. The point is, no matter what investment you make (and charity is an investment), there’s always risk. You check it out the best you can, think about why you’re investing, and recognize that in some (hopefully few) instances, it’s not going to work out as well as you’d hoped. But you have to keep trying.