Perry, that perspective is always curious to me.
I guess I'm coming at this with the thought that when it comes to impacting poverty, $50 in the hands of an organization like World Vision or Heifer International is going to be used in a way that's much more effective, in the long run, than anything I could do with that $50 directly. My efforts will be haphazard, decisions made emotionally, with little understanding of the actual realities of the situation. Their efforts, on the other hand, are ongoing, sustained, pragmatic, and hopefully effective.
There is an infrastructure cost to doing things well, whether that thing is building a car or impacting poverty. I consider the institutional cost to be the price of professionalism, which I place a high value on, even in charitable organizations.
What level of institutional cost is acceptable? I don't know. 10%? 15%? Charity Navigator is an organization that audits non-profits and gives you a breakdown on how they spend their money. For
World Vision, a group our family has supported for a long time,
they spend about 86% directly on programs, about 5% on administration, and about 8% on fundraising. That seems very reasonable to me.