Dec 28, 2009

Stop the Obession With Percentage of Money Spent on Fundraising!

Here's an alarmist headline for you, from the Consumer Reports Money Blog: "What's a donor to do when a charity watchdog lowers its standards?"

The article expresses concern (if less outrage than the title would imply) over the BBB Wise Giving Alliance's recent announcement that, in considering whether to accredit a nonprofit, it will look at whether at least 55% of its expenses were used for charitable programs, as opposed to fundraising and administration. That's a reduction from the former 65% standard. Their reasoning was that the economy is making it difficult for nonprofits to fundraise. They also said that their standard for spending on fundraising will go to 45% of contributions, up from 35%.

Is this a "lowering of standards" that should make donors worry? I don't think so.

In fact, the very idea that there's something nefarious about spending money on administration and fundraising strikes me as inappropriate. What is fundraising, except an effort to raise community awareness and get people involved in a cause -- so that the cause can be supported an maintained? Why should we consider that activity divorced from actually doing the programmatic work? And even if the two are separate, do donors expect fundraisers to work for free? This might have been realistic in an era when board members had extra time to play with, but nowadays, everyone who isn't desperately looking for a job is working darned hard to keep the one they've got. Paid fundraisers are a must, and the good ones don't come cheap.

Sure, I get it that some organizations have let their top employees milk the funding while the programs suffered (though not as wealthy as corporate CEOs). But to punish every organization for the few who've gone too far seems like overkill. There's got to be a better way to judge which organizations are doing good work.