Generally speaking, the operating expenses of charitable foundations are paid from the income of the foundation. There are many kinds of income of foundations, the most basic of which is donations, and foundations can also do business activities of other general commercial organizations, such as investing in stocks and bonds. It depends on local legal restrictions.

If the foundation's income source is limited to donations, its daily operating expenses will generally be paid from donations. Most foundations are like this. Many countries have set a ratio, and some countries stipulate that more than 30% of all expenditures must be used for the direct purposes of the foundation (such as helping people in need), that is, the operating expenses cannot exceed 70%. The operating expenses of institutions such as the Red Cross are also close to 50%.

Therefore, donating to the foundation is often not the most effective way to help people in need, because you donate 100 yuan, and people in need may actually use only 50 yuan or even less. However, because foundations generally have special personnel to manage and use the money, they can allocate resources professionally and effectively. In the long run, this is the most convenient and effective method.

For example, in this earthquake, overseas Chinese appealed to donate most of the money directly to the Embassy of China, not to the Red Cross, because the money donated to the Embassy can be used for disaster relief immediately, and the Embassy will not spend its daily operating expenses here. If you donate to the Red Cross, just like other daily donations, it will be pointed out by the Red Cross as part of its daily operation.