I’m a her. Thanks, Munch. Glad to have another nonprofit nerd on board.
My only problem is when this is concealed in their statements as some kind of spending on actually helping people. Because it isn’t, it is Fundraising.
That and having worked in the list processing business before, as well as having ordered a lot of stuff from catalogs back in the 90’s, I’ve seen what happens when companies get so convinced of the efficacy of fundraising or sales via mailing that they basically spend themselves into bankruptcy. Gurney was sending me over a dozen mailings per year, when I ordered once every spring. When I ordered a muzzle loader from Cabela’s in the 90’s, they most definitely spent more money sending me catalogs after that than my entire purchase. NOT cost effective.
Could you give us an example of this happening?
By the way, I asked my events lady what our typical overhead is on our largest fundraising event of the year. It’s 20%. We’re talking revenue of hundreds of thousands.
My problem is one that Give Well addresses. It’s not enough for a charity to have efficient admin and fund raising (what Charity Navigator measures). It’s also important that the charity’s activities actually make a difference. That’s a lot harder for me to determine, at least for social causes. If it were up to me I’d only donate to the Against Malaria Foundation and Deworm the World, but Mrs. Ispolkom insists on supporting local causes as well.
One thing I agree with the OP on: I despise charitable pitches that rely on pity or compassion. Show me how your program solves that problem.
I let my membership lapse, so I can’t deeper dive, but if you look at Susan G Komen for example, they’re only rated 2 stars (not good) on their financials. They spend 45% of their ‘Program’ funds on “Education”, which includes “raising awareness”.
78.4% of income went to Programs in 2016, 21.6% to “Overhead”, which is more than United Way. So basically, 36 cents of every dollar goes into “raising awareness” and pamphlets. Don’t get me wrong, education is a good idea, but “Raising Awareness” is just another name for Marketing.
If you purchase a Susan G Komen related item from someone else, intended to fund raise, you might be sending Komen as little as 1-2 cents of your purchase price, depending on who you get it from.
Why does the Susan G Komen group need to spend any money on “raising awareness”? Is there anyone in the US who has not heard of breast cancer?
Well, I’ve heard a lot of criticisms of the Komen foundation, for many reasons, so I guess that doesn’t surprise me. 36 on the dollar seems high to me. But I’m not even clear on what they actually do other than pass out pink ribbons and sell other pink stuff. Do they give to research? Run support groups? Educate newly diagnosed women? I haven’t a clue.
Which… Should tell you a lot about their messaging. I have personal feelings about that particular organization so I don’t want to assume all the worst accusations are true.
I would argue that “raising awareness” can be many things other than marketing. But I would also argue that “raising awareness” in many cases is probably not terribly effective. It’s a very vague term that could mean anything. At my org it would probably mean travel expenses for survivor speakers, or something. We have a speakers bureau where women publicly share their experiences of sexual assault and domestic violence, so maybe Komen does something similar? We have an entire Prevention Education team that delivers its skill-based primary prevention curriculum to over 14,000 people a year in local high schools and colleges, as well as educating law enforcement, attorneys and other professionals who deal with victims in their daily work. Calling that marketing would be flat out wrong. You can’t assume you know unless you really dig. (And nonprofits should be as transparent as reasonably possible. I don’t think we have an awareness raising budget category.)
I completely agree! I want to know what you do, and how it helps. I’m somewhat tolerant of reasonable overhead. I expect executives, lawyers, etc. Working for charities to earn a bit less than their commercial counterparts, but they still need to be reasonably compensated. And that means yes, they should be able to attend the same country clubs and what not as other people with their training and abilities.
I’m okay with the United Way, too. I figure their percent goes into figuring out which of the gazillion local charities actually do something useful. That is, I feel I am paying them to be my agent and find worthy local causes, which I don’t have the time or inclination to do on my own. I give directly, too, but I know that all those shelters and soup kitchens need funding, and the United Way seems like a moderately efficient way for me to give to them.
At the organization I worked at, the target was 15% administration, 85% direct program expenses. But it was a constant struggle to hit those numbers.
Do you assign rent and utilities as part of administration, or do you pro rate the costs among the programs? How about the bookkeeper’s salary? Do you charge the development staff’s salaries to general unrestricted funding, or to the grants they secured, or some ratio? How much of the reporting is charged to the programs and how much is administration? For that matter, when the CEO is reporting to donors about how the program they’re funding is doing, is that time charged to administration, fundraising, or programming?
How an organization answers those questions (and how much the auditors agree with those answers) makes a huge difference in the percentages charged to administration and overhead.