How Charities Operate

Posted on Posted in 2014-2015
By Meeko Rustia and Josef Singson

Charities are just like businesses; they are legal organizations set up for the purpose of providing goods or services. However, this is done normally in exchange for nothing. They are non-government organizations that are non-profit. If they do ask for money in return, it is usually for fund-raising or awareness.

They earn money – sometimes, even millions of dollars – by various means, but that money is not profit. It is used to fund the operations of the charity and to help its cause, which usually involves a planned set of programs designed for the common good.

Not all non-government organizations (NGO) and non-profit organizations (NPO) are charities. NGOs may sometimes divide its profit among its members and may be organized for the benefit of a sector that is not marginalized. NPOs cannot consider funds as profit, and must use all of it for the purposes of the organization, but an NPO need not necessarily target the marginalized or needy. A charity, however, is usually both an NGO and an NPO that usually aims to help a needy sector of society (e.g. the sick, poor, animals, victims of war).

Given the many issues in the world, there are many different causes that charities aim to address. The Charity Navigator organization, a group that evaluates official charities around the world, lists 34 general causes in its website and divides them into the following categories: Animals, Arts, Culture & Humanities, Education, Environment, Health, Human Services, International, Public Benefit, and Religion. Most charities just focus on one element of these categories. For instance, there are hundreds of charities dedicated to alleviating poverty, but they are not identical. Some might address hunger while others might address homelessness. They’re both issues of poverty, but with completely different sub-issues and concerns. For health, some might address breast cancer, while others might focus on amyotrophic lateral sclerosis (if you did the bucket challenge but don’t know what this is, then it’s high time you did some research).

The methods that charities use to address their causes tend to vary as well. For instance, some charities dedicated to the environment might do hands-on clean up work while others might be more focused on awareness campaigns. Others might focus more on research, especially if the issue involves a lack of information. An example of that would be the recently trending amyotrophic lateral sclerosis (ALS) disease, for which there is no cure other than short-term treatment. Normally, a charity would have a goal or a set plan of action for addressing a certain issue, and it usually isn’t meant to solve an issue. Issues will, most of the time, always exist to some degree. The key is to simply lessen that degree. Of course, there are some that may be solved eventually (like finding a vaccine for polio, which today is practically non-existent as a result), but otherwise, many issues that charities address such as poverty, corruption and pollution can only be alleviated as of now, not solved.

One of the main things charities focus on is awareness. To get help for a cause, people need to know about the cause. For instance, people know there are lots of diseases in the world, but very few people knew about ALS before the ice bucket challenge went viral. A charity cannot assume that people know about the issues, and even if people know, a charity cannot assume that those that know care about it enough to get involved. Lots of people know that there are helpless people everywhere, but how often do they actually do something about it? Many of the issues that charities handle are not well known to the public. For this reason, charities try to raise awareness for issues and to convince people to do something, because otherwise, nothing will happen. It is kind of like advertising. Keep in mind that most charities are funded by donations and sometimes government support. Sometimes, they are also funded by private individuals or by the founders themselves, especially those set up by wealthy individuals like those of the Bill and Melinda Gates Foundation. In any case, charities are non-profit. They rely a lot on donations, and to get these donations, awareness must first be raised.

Another thing that some charities do is research. It’s easy to understand the benefit when it comes to cancer research or climate change studies, but what about other issues like poverty? Here’s the thing: issues are seldom as simple as they seem. People say that there are lots of starving children in the world, but what is their basis for saying that? It’s not false. Yes, there are starving children. But where? Africa? Where in Africa? And why? People tend to make assumptions about the issues in the world without any concrete facts or knowledge. That’s why lots of people end up oversimplifying problems, posting passionate status messages on Facebook about the ten things the Philippines should do to instantly become part of the First World, or that poverty can be solved merely by education, or that sending Filipinos abroad is necessarily the best thing for the economy. These might not be necessarily wrong, but sometimes the issue is not that simple, and acting on mere assumptions could result in disasters. Also, the issue may be different from place to place. Some places might experience hunger not because they lack education, but because they have no agricultural base. They may lack an agricultural base because of the climate, or because there’s a wild breed of insects in that area. Whatever the case is, charities need to do research – immerse themselves in the situation – before acting.

Transparency is very important for charities. Charities are often required to disclose information to the public as well, particularly to donors. In light of the Pork Barrel issue in the Philippines, it is clear why this is the case. Donations are given in huge amounts for the benefit of a particular cause, not for the pockets of the members and owners of the charity. To ensure this, disclosures are often asked for or required from these organizations. There’s a reason why they’re non-profit; the money is earned, but it is presumably used for the benevolent purposes of the organization. Furthermore, these purposes must be specified. If someone donates a million dollars, and three fourths of it goes to online campaigning, would that be worth it? Or if a charity is large but proposes projects that are short-term, would it still be worth funding over a different organization that has better projects? Would it be worth it to fund an organization that embezzles the money of its donors? The answer is, probably not.

Sources:
http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=34#.VBQX5S6SxCO
http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=1093#.VBP7Hi6SxCM
http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=470#.VBP7Ki6SxCM
http://www.bbc.co.uk/ethics/charity/against_1.shtml
http://nfpsynergy.net/building-trust-and-confidence-charities-what-should-sector-do-and-what-should-charities-do
http://www.alsa.org/about-us/
http://www.opencouchsurfing.org/2007/10/26/pickwick-difference-between-non-profit-and-charity/
http://www.chanrobles.com/republicactno9344.htm#.VBP6XC6SxCM
http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=7426&context=penn_law_review
http://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations
http://www.irs.gov/Charities-&-Non-Profits/Other-Non-Profits
http://www.irs.gov/Charities-&-Non-Profits/Churches-&-Religious-Organizations
http://www.irs.gov/Charities-&-Non-Profits/Public-Disclosure-and-Availability-of-Exempt-Organizations-Returns-and-Applications:-Charitable-Contribution-Disclosures
http://www.irs.gov/Charities-&-Non-Profits/Public-Disclosure-and-Availability-of-Exempt-Organizations-Returns-and-Applications:-Disclosures-to-Contributors-to-Non-Charitable-Exempt-Organization
http://www.courierpostonline.com/story/life/wellness/2014/09/12/horror-behind-als-bucket-challenge/15538419/
http://www.forbes.com/sites/dandiamond/2014/08/29/the-als-ice-bucket-challenge-has-raised-100m-but-its-finally-cooling-off/
http://www.ctvnews.ca/health/health-headlines/icebucketchallenge-how-did-it-start-and-where-will-the-funds-go-1.1975051
http://www.forbes.com/sites/dandiamond/2014/08/18/ok-the-ice-bucket-challenge-worked-now-where-will-the-dollars-go/
http://www.alsa.org/about-als/what-is-als.html
Texas ALS Patient Wants ‘Ice Bucket’ $ To Go To Research
http://www.lawontheweb.co.uk/news/2014/09/0630-alsa-drops-ice-bucket-challenge-trademark-attempt
http://www.slate.com/blogs/quora/2013/02/07/where_do_the_millions_of_cancer_research_dollars_go_every_year.html
http://www.differencebetween.net/business/difference-between-ngo-and-non-profit-organizations/
http://www.thefreedictionary.com/charity

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