From the Washington Post, follow the link for complete article. Of course it refers to American organizations but Canadian charities are not substantially different.
1. Charities are principally dedicated to serving the poor and needy.
“…hospitals are the largest component of the U.S. charitable sector, but they are more likely to be profitable than for-profit hospitals and aren’t much more likely to serve the needy…”
2. Donors should reward charities that have low overhead.
“…But charities need to spend on research, training and financial systems, all classified as “overhead,” to be effective. Those that shortchange these investments — and many do — are less likely to achieve their goals…”
3. Tax incentives are critical to charitable giving.
“People with income in the lowest quintile give a higher percentage of their earnings to charity than do more wealthy Americans. This pattern persists despite the fact that low earners have less disposable income and rarely take advantage of itemized tax deductions for charitable donations…”
4. Nonprofits are not profitable.
“In 2010, U.S. charities reported more than $2.7 trillion in assets. …many lesser-known charities have substantial war chests. In 2007, Ascension Health, a large Midwest charity hospital chain, reported reserves of $7.4 billion, more than twice the cash on hand at the Walt Disney Co…”
5. It is easy to find a good charity to support.
“In fact, it is enormously difficult…”