Philanthropic center says donate cash, not cans

Give of Money

With the holidays fast approaching, people across the country will be donating canned goods to schools, clubs and religious organizations to help support area food drives.

This year, even more kind-hearted Americans may feel compelled to contribute food, especially after the U.S. Department of Agriculture announced that in 2010, 48.8 million residents lived in households struggling to feed family members.

But, according to the School of Social Policy & Practice’s Center for High Impact Philanthropy (CHIP), while the intention of donating canned items is admirable, food drives could be much more effective if people donated money instead.

CHIP Executive Director Katherina Rosqueta recently co-authored an op-ed article about this very topic in the Los Angeles Times.

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Katherina Rosqueta, executive director of the Center for High Impact Philanthropy.

“If donors gave money—instead of food—to a charity serving the hungry, they will get more bang for their charitable bucks,” she says, explaining that organizations have much more buying power than individuals.

When a donor gives money to a charity that feeds the hungry, “three things can happen,” Rosqueta writes in the L.A. Times. “First, instead of going to the store to buy food, the charity takes the donated funds to its area's food bank. There, for every dollar a donor would have spent to buy cans of food, the charity could draw about $20 worth of food. That's because food banks serve as nonprofit, wholesale-like clearinghouses for the food industry's surplus food, charging only a nominal handling fee for food drawn by charity agencies. So a $10 donation ends up leveraging as much as $200 worth of food for the charity to distribute.”

Rather than assembling food into standardized boxes, Rosqueta says charities can display items on shelves, just like in a supermarket, and allow disadvantaged families to choose what they need. This practice is called “client choice.”

Additionally, if the donor claims a charitable gifts tax deduction, his or her after-tax cost for giving $10 could drop to as low as $7.50. By promoting fund drives instead of food drives, Rosqueta says a community can reduce the cost of addressing hunger by an additional 25 percent—simply by taking maximum advantage of available tax benefits.

CHIP reports that for the same amount of money a person would spend buying cans for a food drive, that donor could feed up to 20 times the number of families by donating cash.

Originally published on December 1, 2011