GiveWell’s research aims to help donors by recommending charities we believe can put donations to use efficiently to save or improve lives. Our research focuses on maximizing the good donors can accomplish with their gifts by identifying where to donate effectively.
This is the first of two posts discussing another important aspect of giving effectively: how you donate. The second post will discuss how to maximize your gift (via tax deductions, employer matches, and other strategies) and to ensure the greatest percentage of your donation reaches the charity, rather than being taken up by fees. This post will discuss how to reduce the administrative burdens on charities by choosing your donation method wisely.
How you choose to donate—whether you write a check, fill out a PayPal form, or enter your credit card online—can make a huge difference for the charities that receive your gift. You can save charities time and administrative headaches by being strategic about your method of donation. Our advice follows.
- Give predictably. We’re often asked whether it’s better to give a recurring monthly donation or to give once every year. We don’t think one is inherently better than the other. We do think it’s important that you communicate with charities about your plans; this enables them to budget for your donation.
- Consider the fees and processing costs of your donation method. Some donation methods require more administrative work for charities to process than others. For example, check donations require multiple manual steps (such as mail retrieval, scanning, data entry, and composing a receipt), whereas online donations can be recorded and thanked automatically. The table below summarizes administrative burden and fees for donations made to GiveWell via the following methods:
Processing burden Fees GiveWell recommends for what size gift? Online credit card form Low 2.15% (3.20% for AMEX) + $0.28 on each transaction. GiveWell pays the fee. Under $1,000 Check High None for domestic checks. Currency conversion and vetting fees may apply for international checks. GiveWell pays these fees. Over $1,000 Wire transfer Medium Variable. Donor pays the fee. Over $1,000 Appreciated securities High Variable. For E*Trade and Vanguard, GiveWell pays the fee. Over $1,000
The fees associated with each method also matter. Online credit card donations generally have the highest fees, but the lowest processing time for GiveWell. Checks, on the other hand, have no fees but the highest processing time.
As a result, we recommend that donors giving under $1,000 make a donation via our online credit card form. For donors giving over $1,000, the calculus changes – we recommend giving via a check. Note that due to the high processing time required for each check we receive, we would advise donors giving via check to make an annual gift, rather than dividing their gift into monthly check payments.
- Tell charities where you heard about them and why you chose to support their work. Knowing how donors who use our research or support our operations found GiveWell and why they chose to make a donation is extremely helpful for improving our outreach and research product. We recommend giving charities this basic information. Supporters of GiveWell and our recommended charities can do this by filling out this survey.
- Keep in touch! Charities love hearing from their supporters. Ask them questions about their work, let them know if your giving plans change, and offer them feedback on how to improve.
A separate post will discuss how you can save money on fees and give tax-efficiently so that more of your charitable budget can go directly to the organizations you want to support.