Acid tests and red flags

William Borden's op-ed piece on how to evaluate a charity did a tremendous disservice by telling us to simply "ignore overhead." [“Overhead is a poor way to measure a charity’s effectiveness,” Opinion, Jan. 5.]

Certainly considering other factors beyond overhead would be a valid and fair point. There might be good reasons why one good charity might have a higher overhead then another charity. But unfortunately, this wasn’t his point.

In accounting there are various "acid tests” that provide a quick way to get a perspective on an organization’s financial health. Poor results from these acid tests do not necessarily indicate an unsound business but it certainly does raise red flags that require further investigation.

Overhead is one of those acid tests for charities.

As head of a charitable organization, there are many other insights and warnings — such as how telemarketers solicit donations by pretending to be associated with charitable organizations — that Borden could have outlined to help us better evaluate charities and thus increase our confidence and motivation to donate to worthy causes.

Unfortunately, he leaves us with the advice to simply "ignore overhead." It sounds a lot like the Wizard telling Dorothy to "ignore the man behind the curtain ..." We simply can't do that.

-- Gary Makowski, Bellevue

Online resources

Regarding William Borden’s op-ed, he failed to mention some online resources that attempt to evaluate a charity’s effectiveness:

Charity Navigator (http://www.charitynavigator.org/)

rates charities and educates donors.

Guidestar (http://www.guidestar.org/) “gathers and publicizes information about nonprofit organizations.”

GiveWell (http://www.givewell.org/) “Unlike other charity evaluators, which focus solely on financials (assessing administrative or fundraising costs), we focus on how well programs actually work — i.e., their effects on the people they serve.”

Network for Good (http://www1.networkforgood.org/) accepts donations for thousands of charities and accumulates a personal “Donation History,” useful for tax or other purposes.

-- Mike Ramey, Seattle