Thursday, January 10, 2013

Picking Efficient Charities – Comedy Central Edition

Lest we take ourselves too seriously...

In this, the inaugural installment of picking efficient charities, we compare the two titans of Comedy Central, Jon Stewart and Stephen Colbert.  The goal is to examine the charities endorsed by each person and see who picks charities that are more efficient.  In terms of how to measure success, we will compare the most recent year’s program expense ratio (percentage of funds directly spent on the organization’s mission) for each of the five largest charities endorsed by each person.  The charity endorsements were obtained from Look to the Stars; the financial data comes from the respective charities’ annual Form 990 filings and/or from Charity Navigator.  This exercise comes with loads of caveats about interpreting efficiency measures, but we will save those for another day.  For now, let the comparison begin. 

The graph below shows the program expense ratios for the five largest charities endorsed by each individual.  Jon Stewart’s charities are in blue, Stephen Colbert’s are in red (naturally), and those endorsed by both are purple.  For context, note that the Better Business Bureau considers a 65% ratio to be acceptable, while the common rule of thumb is a bit more stringent at 75%.

The conclusions:
(1)  Both Jon Stewart and Stephen Colbert are quite good at picking efficient charities to endorse (Autism Speaks is the main one that appears less efficient, but this too requires a longer discussion another time).
(2)  If there must be a winner, it is Stephen Colbert.  I am sure he will accept this victory with humility.

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