Accounting for Charitable Contributions

A look at the financial structure of charity organizations and to what extent these are effective in supporting intended objectives. This paper takes a look at the financial structure of charity organizations and at what extent these are effective in supporting intended objectives. The author argues that often charities spend donations not in connection to their stated mission, and in many cases the money goes not where it is most needed. Americans are a very generous people, reaching into their pockets again and again to provide their personal and corporate dollars to support what they believe to be worthy causes they may not have the time to personally volunteer, but most are willing, at least occasionally, to write a check to support those that do.The U.S. has 1.4 million tax-exempt organizations. Its probably a safe bet that most are well-intentioned and honest. But a lot of them are simply inefficient they spend donations meant to help people in need on staff salaries or direct-mail marketing. Some do not even put donations to use toward their stated mission (Forbes, 1999).