Merry Christmas and Remember to Share Your Wealth: here's how

Christmas is a time of giving, not just to friends and family, but also to strangers who can use our help. Helping strangers can be direct one to one or through the many fine charities out there.

As with most things today, there is a way to give online. In Canada, a charity portal has emerged - CanadaHelps.org. Itself a charity, it funnels funds to charities, electronically, when the charity has registered with CanadaHelps, or manually by cheque in the mail when it isn't. CanadaHelps takes its list of charities from those registered with the Canada Revenue Agency so at least one can be assured that the charity is real and eligible to produce a tax receipt, which CanadaHelps does instantaneously for all charities.

That doesn't mean every charity is equally worthy. That depends on one's preferences and, in my view, on the efficiency and effectiveness with which it carries out its stated goal. Some supposed charities chew up all their donations in overhead and administration. You still need to check them out before giving.

Which brings me to CanadaHelps itself. As a charity, is it worthwhile, effective and efficient or does it subtract rather than add value in helping the ultimate intended beneficiaries? CanadaHelps contacted me the other day touting their website and hoping I would do this post. I asked for and promptly received their audited financial statements. A positive sign, though I wish they would just post them on the website as well for everyone to see. The total expenses of CanadaHelps amounted to 4.8% of donations in the year ended June 2009, up from 4.2% in 2008. It seems mainly due to professional consulting fees rising faster than donations. Tha financial statements do not explain why that happened. One would hope that the online model would allow scale economies and donations to rise faster than costs.

The 3% fee that CanadaHelps charges compares reasonably with alternatives that a charity might have, like PayPal, which charges 2.9% + $0.30 per transaction to receive money. Most of the 3% (about 2.1% per the financial statement) gets absorbed directly by bank fees to make payments. VigetAdvance talks of other charity websites which charge 4.5-4.75% to accept donations. Of course, there is the old letter ($0.54 stamp + envelope) and personal cheque method.

Given that CanadaHelps also allows one to donate shares and thereby avoid paying capital gains on those donated shares, it looks like a good service, convenient for both individuals and charities alike. Whichever of Canada's 160,000 or so charities you choose, have a Merry Christmas all.