MAXIMIZING OUR TZEDAKAH DOLLARS
How Much Reaches Its Intended Target?
Are We Giving Wisely?
by Rabbi Eli Teitelbaum
One of the Torah's many commandments to help the poor would help us
avoid one of the costliest problems of our own complex society. The Torah
requires every field owner to leave the end of his field uncut and allow the
poor to enter and cut the produce for themselves. Imagine how much money the
needy would lose should the owner have to hire workers to do the harvesting,
packaging, trucking, storing and distributing. Just imagine the great savings in
administrative costs that this method provides! New York City, like all
governments, pays millions in administrative costs to aid the poor. Just imagine
how much more money would be available if it all went directly from giver to
taker, without any middleman. Nowadays, when money is so tight and individuals
and institutions need our every penny desperately, we must certainly make sure
that every bit of our tzedakah money reaches its proper destination and none is
siphoned off by unnecessary waste or middlemen. Yet, we often spend far more on
collection and administration fees than we can afford. In too many cases, only
10-30% of our tzedakah dollar ever reaches the coffers of the needy individuals
or institutions. The great waste in collection costs is absolutely astounding.
Here are some facts told to me by some of the honest collectors. If you have any
doubts, or think I am exaggerating, I invite you to investigate it on your own.
In this brief article I'll deal only with the legitimate meshulach (collector)
and legitimate institutions. I'm not at all touching on the frightfully vast
sums of money lost to the phony collectors, which never reach the institutions
at all. Nor am I discussing the huge losses to those who pose as poor people,
but who have substantial bank accounts. This is unfortunately a terrible drain
on our tzedakah dollars and is a painful subject in itself. Conservative
estimates of these losses probably reach into the hundreds of thousands. I am
strictly limiting myself to the legitimate collectors and the legitimate
institutions. At the outset, let me make it clear that both institutions and
honest collectors face a major problem. The sad fact is that the overwhelming
majority of people do not send checks unless they are solicited in person or by
phone. For institutions, especially those in Israel, this means finding people
who are willing to leave their families for extended periods of time to travel,
and to live in difficult conditions while they go from strange city to strange
city. Or it means hiring organizations to conduct telephone solicitation
campaigns or telemarketing. All of this costs money that would otherwise go
directly to the charity - if the public did not require expensive fund-raising
campaigns. Here's how the system works: The first thing the meshulach needs is a
driver who is familiar with all the names and addresses of known contributors in
the neighborhood where he is collecting. There are specialized car service
drivers who are pros in this field. They know all the worthwhile addresses and
even know what amounts to expect from each person. They keep careful tabs on
each person's tzedakah habits and trade this information among themselves. They
do this by making copies of all checks received and keeping exact records of all
contributions. For this knowledge they command a hefty fee. Generally they
charge between 40-50% of the day's proceeds. However, if the driver takes three
or more meshulachim at the same time, then the price goes down to only 33% of
the take. This excludes expenses such as gas and tolls. Unfair? Perhaps. But
what is the meshulach's alternative? Next goes the meshulach's commission, which
is usually a minimum of 50%. Some, mind you, take up to 75%. This is, of course,
in addition to deductions for expenses such as: airfare, hotels, food, and car
service. A simple mathematical calculation reveals at once how very little is
actually left for the legitimate mosad or yeshiva. If they wind up getting even
twenty-five cents on the dollar they're doing great! Another popular way of
fund-raising that has become very widespread nowadays is known as telemarketing.
While a few mosdos are able to get volunteers to make the calls, the vast
majority are made by specialized fund- raisers who are subcontracted to do the
job. These are honest people who are well-trained and can raise large sums of
money. One organization that used their services recently was shocked to find
how little they were left with. They paid 50% outright commission to the
telemarketing company. On top of that they had to pay office expenses, such as
telephone bills, printing the follow-up mail, postage, etc. When all was said
and done, they were left with only 20 cents on the dollar. The question here is
not the legitimacy of the operation, but the large expense incurred by the
institution. (Remember! This article does not deal with the hundreds of phony
letters that swamp our mailbox. That's a topic for itself.) The question here is
this: Can we afford and justify this heavy drain on our tzedakah dollars? At a
time when money is so tight and institutions need every penny so desperately,
can we afford to pay such high costs for these collection services? Some try to
keep collection costs to the bare minimum by hiring fund-raisers on a regular
salaried basis without any linkage to the amount raised. While this method
certainly seems preferable, it has one major drawback. Such employees do not
have the same drive as fundraisers who work on a commission basis. Naturally,
the greater the commission the greater the incentive, but shouldn't there be a
limit to how much comes off the top? While there are operations like Tomchei
Shabbos that work strictly with volunteers so that not even one dollar of
tzedakah money is lost in collectors' fees, most others just can't work this
way. Lest we throw the blame on the mosdos and accuse them of wasteful fund-
raising practices, perhaps we ought to fault ourselves. If, instead of waiting
for mosdos to come knocking on our door, we would take the initiative and send
in our ma'aser money on our own, things would be a lot different. Just imagine
how much money could be saved if there would be no need for Manhattan dinners,
no expensive journals, no car service drivers and no go- betweens! The savings
would be astronomical! Perhaps, this way, there would even be enough money
available to properly support all our institutions. But, of course, such a
suggestion is unrealistic. One can't change American tzedakah habits. This is
the way it's been for ages, and this is the way it's going to remain. If
yeshivos and institutions wouId wait for our "YOSHER" they would have
had to close shop ages ago. Yet we must give some serious thought to this very
difficult problem. We must learn to become intelligent givers and give in a way
that will count most! Just as we examine an esrog for every little spot and
flaw, so we must carefully analyze our tzedakah habits. We cannot afford all
this waste. The guidelines I have heard given by leading poskim is that
collection costs should not exceed 30-50%. We have gone far beyond these common
sense guidelines! The Gemorah says that if one is not zocheh then his money goes
toward unworthy causes. Certainly we must have great merits to maximize our
tzedakah dollars and see to it that the flow of Jewish generosity does not
dissipate into the receipt of a trickle of money. While some may use this
information as yet another excuse not to give tzedakah, I'm sure that sincere,
sensible people will use this knowledge to their advantage and learn to give
their tzedakah dollars wisely. After all, we must fulfill the mitzvah in the
best possible manner and not just haphazardly. It requires careful scrutiny and
great wisdom to know how and where to give. Our answer to these problems should
be to become more intelligent givers. Let's not wait for the needy and worthy to
come begging at our doorstep. Let's preempt them by sending in our contributions
before we're even asked. We all receive direct personal and mail appeals from
very reputable collectors that don't take one penny for themselves and give the
entire money they raise to worthy tzedakas. Let's seek them out and give them
our primary support. The great gaon and tzaddik Rav Moshe z.z.l. often
complained that he would get lots of questions on all parts of Shulchan Aruch,
yet nobody asked him any questions on hilchos tzedakah. Where is the best place
to send your hard- earned money? How should one divide it up? How much is one
required to give? Before we invest our savings, we do lots of research in order
to get the highest yield for our dollar. It is high time we do the same for our
tzedakah dollar. Perhaps we ought to consult our rabbonim on the wisest and best
way to give out tzedakah. The cost of continuing in our old ways is too high.
The need for constructive thinking has come. We must do better!
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