The ALS Ice Bucket Challenge is a huge success by any standard. I don’t think there has been a more viral fundraising strategy that has saturated the streams of every person on social media. However, along with this success, there has also come some scrutiny over how this non-profit allocates its money for the causes it represents.
For example, as I came across my news feed on Facebook, someone had posted this article from Red Flag News where it is reported that 27% of the donations to ALS actually goes to research and cures. This, of course, is intended to be unacceptable for nonprofits. Then they proceed to do the financial breakdown of the salaries of organizational leaders to add fuel to the indignation, along with the mention that 14% of their incomes goes to fundraising.
Of course, what this is supposed to do is question the integrity of the organization, raise suspicion about its legitimacy, and call for more accountability and probes into its operations. In contrast, the article proceeds to talk about other organizations where the overhead is remarkably low, and one even where it is said that 100% of the money you give goes directly to the cause (high quality foods). Ah, yes, this is what we want, right?
You see, that is exactly what I thought.
Until I started leading a nonprofit organization of my own.
Have you ever considered what an organization looks like where 100% of your money goes to the cause with nothing going to the organization? Have you ever wondered how the organization supports itself? How the leaders get paid? How the word even gets out that this organization exists and why its causes are worthy of your support? Most often we don’t because we are stuck with the “we want nonprofits with low overheads where all of our money goes to the cause” with little thought to the capacity of the organization or its ability to actually solve problems, change lives, and make lasting change.
Would you want a gift to an organization where 100% of your gift goes to feeding the poor if the organization making it happen only feeds a few children? Or would you want to give to an organization where a smaller percentage of your gift goes to the poor but the organization has a scale exponentially larger because you not only invested in the cause but the high-quality organization that is making it happen at massively larger capacity than the 100% gift organization? What matters most? The giving purist with little to no change or the powerhouse changing the world?
I have been challenged here by Dan Pallotta. In his book Charity Case, he talks about the principles of discrimination against nonprofits and the poor questions we are trained to ask (“what is the overhead of the organization”?). He argues,
“When charities place these seals in prominent places on their websites, they are signaling to the general public that overhead is the smart thing to ask about. And since many of them focus on keeping overhead low above all else, or accounting for it in a way that allows them to report it as low, the overhead measure is in their best interest. But it may not be in the best interest of their community or donors. What good is low overhead and organizational stability if we’re not solving the problems for which we were chartered?”
If you have about 20 minutes, do yourself the favor and listen to his TED talk on this very issue (note: he has some comments in the talk I disagree with but his main point is transformative). The rulebook for nonprofits does everything it can to disadvantage the one sector trying to make the most change in the world for good, and we have adopted a mentality that enforces the rulebook rather pursuing the change we want to see take place.
So back to ALS. How does this relate? Should we be upset that 100% of the donations do not go to research or finding a cure? Let’s ask a little further. Let’s not just ask where the money goes but how the money is received? How can they administrate these funds? What kind of staffing is capable of doing this? What about financial systems and banking solutions? What about support staff and contract services to handle various components of servicing of funds to forward the cause?
If I told you that one of the most respected Christian ministries spends over $2 million a year on fundraising and another $2 million on staff, would you no longer buy the books they public or read their articles online? What if they are putting resources into the hands of thousands of people who are growing spiritually and perhaps helping pastors around the world who have no other way of being trained?
If I told you that the leading Christian adoption agency spends over $4 million a year on fundraising and nearly $10 million on staff, would you be upset with them? But what has made them the leading organization with the capacity to do more than others? Because 100% of your gift goes to the cause? I don’t think so.
If I told you that the leading orphan care organization spends over $62 million a year on fundraising and $42 million on fundraising, would you no longer sponsor children? But what if that $100 million brings in an additional $500 million revenue to their organization? Is that not a good investment of donor gifts?
You see, if the pie is $10,000 a year for an organization that tells you that 100% of your gift goes to the field, then they are considered a high-quality nonprofit, right? But if the pie is $100,000,000 a year for an organization that tells you 27% of your gift goes to the field, news reports break out with salary breakdowns and outrage over 14% of budget going to fundraising (with is quite average I must say). The ironic thing is, that these investigative reporters would have nothing to write about if ALS did not invest 14% into fundraising because there would have been no bucket challenge in the first place. And nobody is writing articles about the $10,000 organization because few if any know they exist.
Having said all this, I realize that most people only see one side of the nonprofit world. That was me at one time. I was at the front of the line demanding that nonprofits get their act together and make sure that 99.9% of the donations went to the cause (and the other 0.01% was what they had left for the organization to make it work). I spoke in ignorance, and articles like the one I mentioned to you above play off that ignorance in society.
Let’s no punish and penalize nonprofits who are actually trying to solve the problem and change lives in a larger scale. Rather let me encourage you to invest in the organization and the cause it represents. It is naive to think you can invest in the outcome without investing in the means to bring that outcome about. When it comes to accountability and integrity, I would rather give to the organization who accomplishes its mission and makes lasting, transformative impact in the world than give to the organization who gets the gold star and badges on their website for having the lowest overhead. Let’s be real, y’all, and let’s give to the cause as well as the agents who have given their lives in passionate commitment to make that cause the theme of their lives.