Yes and no.
Large charitable organizations may have overhead… but so do smaller organizations. For those big organizations that run effeciently, overhead is a smaller percentage of costs because they pool resources.
So say there are 5 medium sized charities and one big one. Let’s compare. The five medium sized charities still need a CEO or Exec. Director, they need human resources department, payroll, communications and marketing, a finance department…
In the larger organization you have the same but often, they have LESS staff than the administration staff of 5 or so medium sized charities.
The bigger the charity, the more likely they are to get sponsorship funding from corporations – sadly, corporates want to sponsor a charity that is going to help them with their sales and marketing (yes, there are a few corporate exceptions out there)
So there’s my YES answer
On the No side: Larger charities usually have so much risk exposure that insurance companies demand more risk management practicies. So in some large charities (not all) you end up with staff that spend all of their time making sure that the form is in the right format and that the manual on manuals is updated and distributed, trained and re-trained. You get the idea (yes, I worked for a big charity that had a manual on manuals). They’ve got forms for creating forms, guidelines and schedules – some of it creates efficiency, some of it just creates more work and more need for administrative assistants and data entry clerks to keep all of this tracked and recorded. Again, not all big charities end up creating a bureaucratic nightmare but the risk is higher that it will happen the bigger you get.
Smaller organizations usually have more active volunteers than they do staff. And the volunteers are more active in day-to-day operations. Small organizations can still manage risk without adding a huge bureaucracy because their scope and number of volunteers and programs is that much more manageable.
Smaller organizations are usually local – so if you donate to them, you can see that your dollars are going directly into the community.
However, that said. Our society NEEDS both types of charities. We need large charities who can carry a big stick to lobby government, to create awareness about a health risk or an environmental issue. Picture the next earthquake or tsunami without the Red Cross for example – how many small charities would you need to do the same? How many small charities would be ready to operate immediately?
We need small charities to help locally with individual needs and day-to-day strife and to give a voice to little known conditions or issues.
Also remember too that big charities used to be small charities. And every charity, regardless of size has the potential to grow.