IDA's are a great IDEA

photo by Ingorrr

photo by Ingorrr

“You can give a man a fish and feed him for a day or you can teach a man to fish and feed him for life” – Chinese Proverb

How do you feel about giving to charities?

There is no better feeling than knowing that you have helped make someone’s life better. But when it comes to financial contributions I am always concerned how much of my donation goes to those that need it and how much is used to line the pockets of those that manage the charity.

I won’t even touch the outright scams, I am talking about legitimate charities that are simply managed inefficiently. For example, Charity Navigator an organization that tracks the performance of charities provides a list of the 10 charities that are drowning in administrative costs. Currently the top of this list is the American Tract Society with administrative costs of 68%.

The majority of our donations in the past have been to a few different cancer organizations, and The Make-a-Wish Foundation. The Breast Cancer Research Foundation was on the Charity Navigator’s list of Most Consecutive 4-Star ratings. None of the charities I recall were on the “bad charity” lists but not one of them is as efficient and I would think a charity organization should be.

For many, deciding who to donate money to is based on finding a cause that you are passionate about. It dawned on me recently that I could be much more passionate about an organization that is more efficient, a group that gets more dollars to those that can use it. To that end, I think I have found a program which will put 100% of your donations to work.

This is possible when you contribute to an Individual Development Account. Under the federally sponsored program, people that live in near poverty or below are provided education, guidance and financial support while working towards their goal of obtaining additional education, saving to buy a home, or raising seed money to start a business.

Participants are not simply handed money. They have to earn their charitable contribution! An Individual Development Account (IDA) is essentially a special savings account. If the participants meet certain goals and accept specific training and/or one on one support, each dollar they save is matched, sometimes 2 for 1, with your dollars and money contributed by sponsoring organizations.

Currently there are over 500 IDA programs in existence around the country today. A partial list of IDA programs can be found at the Corporation for Enterprise Development website. Program guidelines and criteria may vary from community to community. But in each case, your donations are tax deductible and are used 100% by people that not only have a need but have also demonstrated their commitment to improving their lives.

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5 comments to IDA’s are a great IDEA

  • This was an excellent idea for a post. I didn’t know IDA’s existed and I’ll have to spend some time looking through the list to find one I like. They’ve been pushing us at work to donate to the United Way but I think I like this idea better, because I have the same concerns as you about charities’ overhead.

    – David
    .-= MBAbriefs´s last blog ..Develop your own marketing plan – part 2 =-.

  • Didn’t realize there was an IDA thing either. Thnx for sharing! Kind of like the “Care not Cash” program for the homeless here in San Fran.
    .-= Financial Samurai´s last blog ..Someone Has To Give Birth! Why Women Shouldn’t Be Penalized For Being A Mom. =-.

  • The LeanLifeCoach

    – David, glad to share… it looks like a really good program to me. I’m also contemplating donating some time as a financial counselor

    FS – Care Not Cash also looks like an innovative way to help those that need it. I imagine SF has a line on some cheap properties that can be used. Seems to me these same people could be candidates for the IDA program. Check out the SaveTogether.org program in SF.

  • LeanLifeCoach – great post and thanks for the link to our organization – SaveTogether. We have savers from 6 programs across the country (Boston, Washington DC, Spokane, WA, and San Francisco).

    You can make a donation on our site and 100% of our funds will be used as a match to support a saver in one of partner programs.

  • The LeanLifeCoach

    Dylan

    It was my pleasure. I just wish this young blog could reach more people. What you have is great program.

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