Sunday, October 22, 2006

BeadForLife

My wife asked me to look into BeadForLife, an organization she recently heard about on the news. She wants to know whether the organization is legitimate, since she likes bead jewelry and also likes the idea of helping other people, which BeadForLife claims to do. Its tagline is eradicating poverty one bead at a time.

Since BeadForLife is not tracked by Charity Navigator, I'll use Charity Navigator's framework for Evaluating Charities Not Currently Rated by Charity Navigator:

1. Is it legit? BeadForLife (all one word) is found in IRS Publication 78, listed as "A public charity with a 50% deductibility limitation." That's the same designation that 4-Star 501c(3) charities CARE, Children's Hunger Fund, and Stop Hunger Now received. In other words, BeadForLife is legit. It is located in Boulder, Colorado, very close to where we live.

2. Is it efficient? Charity Navigator suggests that efficent charities should spend less than 25% of funds to cover advertising and administrative expenses. In other words, 75% or greater should go towards program expenses. According to BeadForLife's web site, 26% of funds go toward United States administrative overhead, and another 11% goes toward Ugandan overhead. That leaves 20% for the Ugandan beader and 43% for community development projects in Uganda. Charity Navigator suggests using Form 990 to gain a sense of an organization's efficiency, but since the charity itself admits that 37% (26% + 11%) of expenses go toward overhead, I don't need to check Form 990 to conclude that Bead For Life is inefficient. That said, if someone were going to buy beads anyway, I assume BeadForLife invests more in impoverished communities than most stores or brands. For example, when you buy a red iPod nano for $199, $10 of the purchase price goes to fight AIDS in Africa. That's 5% efficiency for buying from Apple (and only on one particular product) vs. 63% efficiency for buying from BeadForLife.

3. Is it sustainable? Charity Navigator looks for growing revenues and expenses, as well as a 6-month cash hoard to weather any dearths of donor generosity. Here's where the Form 990s would come in handy. However, BeadForLife's Form 990s are not available at GuideStar.org, so I cannot determine whether the organization's efforts are sustainable. GuideStar gives several reasons why Form 990s might be missing. (As an aside, GuideStar appears to check IRS Publication 78, so legitimacy, efficiency, and sustainability can all be measured at Guidestar.org if Form 990s are available). Assuming that BeadForLife's jewelry is priced competitively and that demand for bead jewelry remains constant or grows in the future, margins appear to be high enough to make it a sustainable model.

4. Is it effective? To determine whether a charity is effective, Charity Navigator suggests that potential donors "contact the charity directly to assess its goals, accomplishments and challenges." Charity Navigator also lists 6 Questions to ask Charities Before Donating. Even without contacting BeadForLife, I can ascertain that its goal is to help eradicate poverty by creating jobs rather than giving handouts. By its own accounting, it has created jobs for 150 beaders, who now have average salaries of $100/month, as opposed to a more typical $25/month for many other employed Ugandans. Despite their relative "wealth," beaders live in mudrooms without electricy, windows, or running water.

5. Is it committed to the rights of donors? Charity Navigator states that many local and national charities sell names of donors. I did not find a stated privacy policy on BeadForLife's web site.

My overall assessment? If you're going to donate cash to a charity, other organizations are more efficient. However, if you're going to buy bead jewelry anyway, buying from BeadForLife helps Uganda to eradicate poverty through job creation rather than through handouts. It's the sustainable "teach a woman how to fish" philosophy, rather than the "give a woman a fish" philosophy, which feeds her today but not tomorrow.

3 comments:

maria esperanza georgia noel hale said...

Thank you for your review. It was helpful as I have just recently bought beads from them. Have a great day, Peace to you!

Anonymous said...

Thank you for your research. I am satisfied that this is a good way to help the Ugandan women involved. I follow a rather stricter than 25% but have come to see that it depends on the service provided. Just passing cash to people, making them dependent and continuing unskilled, as in American welfare, is easier and cheaper and more wasteful in the long run, for the agency, and tax payers / donators, than actually training people and transporting products they produce. Thank you. In Christ, Dorien and Cheryl de Lusignan

frykitty said...

Thank you for doing the legwork. BeadforLife was recently mentioned in Beadwork Magazine, and I was interested in passing on the word, if they proved legit.