One friend at the table expressed disapproval/distrust toward a particular well-known organization because she learned they spent a large(r) amount of money on overhead and salaries. Several women agreed and began to exchange reports, frowning on the big bureaucratic organizations who claim to do God's work but take a chunk out of every donation for administration, fundraising, and overhead.
The conversation then turned toward affirming and highlighting a few organizations who send almost 100% of their contribution directly to the people in need, to "program expenses." To the majority of the group, this was noteworthy and better.
I sat, listening, to the different perspectives, having been both a donor and an employee of several ministry organizations with varying core values and priorities. There's a lot to consider, and it's a worthy discussion.
Charles Lee, blogger, author, and founder of the Ideation Conference, wrote an interesting post back in May called "Rethinking Not-for-Profit Donor Giving Percentages." He addressed the "knee jerk reactions and platonic thinking" that some people have when it comes to the breakdown of overhead, fundraising, and program expenses, and the challenge it can be for some non-profit organizations to combat public perceptions. I couldn't agree more.
Who isn't incentivized by "100% of your gift will go directly to ..."? I certainly am!
We have supported several charitable organizations over the years who have been able to boast this, including Charity: Water and Lifesong for Orphans. Organizations like these are structured in such a way as to make it possible for the every-day donor to give directly to 'program expenses.' They have generous donors who designate their gift specifically for support expenses, or an endowment that covers support expenses, or a large volunteer staff that keeps expenses low.
I'll be the first to admit that I find great satisfaction knowing 100% of our $100 gift is going directly to help the hungry person in Ethiopia, instead of being unwisely spent on unnecessary wants, like Papyrus stationery to thank a major donor. I'm enticed by the idea of having no middle man--of my gift crossing 8,000 miles and specifically helping a family in need. Besides, if I could give my full $100 to this organization who will send it ALL to Africa, why would I give to that organization who will only give $82 of my $100? My desire is to help the people in Africa, not puff up some non-profit organization whose going to add me to their mailing list and send me 14+ direct mail letters a year.
(See! I understand where you're coming from!)
I would like, however, to share an alternative perspective, in defense of the organization doing great work who happens to have a higher percentage in the category of support services--that is, fundraising and overhead/management.
My questions for you, as a donor, are:
Is it important to you, as a donor, that the organization you are donating to (including your church) treats its employees well? (benefits, vacation/sick time, working conditions, salary)
Is it important to you that the organization your are donating to doesn't cut corners with its vendors or skirt around extra fees at the inconvenience of others?
Is it important to you that the organization you're donating to does quality work with intentionality?
Is it important to you that the organization has good donor care (aka, customer service)--that they thank you and answer your emails and promptly ship your purchase and bring you into relationship with the ministry in which you are participating?
These things are important to me. They always have been.
And these things aren't free.
I have worked at three established evangelical non-profit organizations, and freelanced for half a dozen others. As an employee, I'm of the mindset that if you want to have a productive, efficient staff, you should take good care of your employees, in Jesus' name. One organization I worked for provided excellent health coverage, medical, dental, and vision, as well as 401K matching, as well as each team budgeted for staff development opportunities annually to grow the employees working within each division. They also paid competitively, so they were able to hire qualified applicants. They knew how to take care of their people, and the staff at this organization were equipped, trained, qualified, and motivated. This resulted in excellent donor care for you, the donor, and talented, creative minds working together to serve the needs of those they helped. AND, in my opinion, it represented Jesus well.
Maybe I'm wrong, but I believe it matters to you how the employees of ministry organizations you support are treated. I believe you want quality customer service, and to be properly thanked and receipted for your donation. I believe you want your pastor to be well cared for, and for the people on staff at your church to be paid according to their gifts. I believe you want to hear from the organization how your gift helped. I believe deep down you want the most qualified, experienced, passionate person to shrewdly make your gift count to its fullest potential.
All of these things cost money.
[Please note, I'm not saying an organization with a non-existent overhead does a bad job at the above things. What I'm saying is, the model of "100% of your gift goes to" cannot be sustained by many organizations, and shouldn't be our standard. It should be stated that if you give a gift to an organization who spends 20% on supporting costs, your 20% is not all being spent on fundraising. It might also be spent on worthy things, like employing people, providing quality medical care, enriching professional growth, and excellent donor services.]
It's true that some non-profit organizations are not as frugal as they should be. There can be frivolous spending, and there is certainly a tendency among some organizations to over ask or over fundraise. I don't believe the executive team of a non-profit organization should share the same salary as the team at Google. I absolutely support more accountability when it comes to functional expense allocations.
But I'm making the argument that a 20% overhead is not a cut and dry indicator of the inner workings of the organization (nor should it be). It's possible your gift to the hungry family in Africa might also be providing health benefits to a secretary in North Carolina. Your gift to provide clean water in Indonesia might also be paying for a quality computer database that helps track and monitor your gifts, enabling the organization to issue you a timely record of your giving statement when tax season comes. Your gift to the local Rescue Mission might help purchase a sabbatical for a servant on the bring of burn-out. These are worthy ways to spend your donation too.
What do you think? Do you work for a non-profit organization or church? What do you think the standard should be for how an organization is evaluated in their overhead/program expenses? What is important to you as a donor?