In North America, umbrella organizations exist to collect funds for local charities. These may be called the United Way or United Fund or some similar name. Jewish communities in North America have similar organizations, sometimes called the Federation or the Association.
But before contributing to any charitable organization, it is always a good idea to check Charity Navigator to learn how these umbrella organizations collect and disburse the monies they collect. Do they send most of their funds to other charities, or do they use large amounts of the money they collect for fundraising and administrative costs?
According to Charity Navigator, some of the Jewish charitable organizations are found to spend 77 percent or less of total revenue on programs and services. For one local umbrella charity, administrative expenses were 9.9 percent, and fundraising expenses were 13.6 percent of total revenue.
Data can usually be found in reports by the umbrella charity, or any charity, that covers each fiscal year. For United States charities, even tax filings are required and the form that the charity submits is U.S. Internal Revenue Service (IRS) Form 990. These forms are available at http://www.guidestar.org.
In examining these publicly available resources, one local Federation paid compensation of $625,180 to the Executive Vice President and CEO in a recent year. Other highly paid employees received compensation of $486,461 and $242,618. Again, this information is publicly available on the IRS 990 filing.
Is this where you want your money to go?
Each person who considers making a contribution to a charitable organization, including an umbrella organization, makes an independent judgment as to the purpose and value of his or her contribution. While these umbrella charitable organizations support many worthwhile causes, it may be better to contribute directly to individual charities. That way 100 percent of your money goes directly to the individual charity.