We’re approaching Giving Tuesday and the season of generosity that accompanies the end of the year. With that, I encourage everyone to give generously and cheerfully. As a non-profit advocate with years of experience in the industry I see the needs as well as the struggles to raise funds to meet those needs. I fear that there are increasing expressions of, at best, concern; and at worst, disgust, about how non-profits are run. Granted, there are severe examples of fraud and misuse of funds but in no way should the entire sector be saddled with these generalizations. I’ve noticed a distinct lack of trust from the public and I feel very passionate about helping to build back that trust so that the non-profit sector can address the myriad of problems they are dedicated to solving.
Let’s start with financials. It’s been said that too much money is being spent on overhead. The industry has decided that 10-15% on non-programmatic cost is appropriate. While low overhead cost is inarguably a good indicator of whether a non-profit is a good steward of donated money, it takes more than a pre-determined percentage to determine that. A big part of the concern is salaries, and the sentiment that executive staff make too much money. I see some seriously flawed memes and statistics on social media that are perpetuating the problem. It’s distressing because I rarely see executive and support staff being paid enough, let alone too much. While I understand the sensitivity towards how donated funds are used, it takes quality people to run a quality organization and they shouldn’t have to do that on a salary that, in some cases, may qualify them for their own services.
I encourage donors to take the time to actually understand how donated funds are used. Audits, financial statements, charts, graphs, 990’s, and annual reports show what an organization raised and how much they spent. However, rarely do these documents reflect in-kind donations, or what the organization did not spend money on to further the mission. Volunteer time is a critical component and cannot be overlooked, nor can donated space and materials. And don’t even get me started on office furniture and supplies! Non-profit employees are learned experts in: duct tape repair, double-sided copying, paper re-use, hardware and software work-arounds, and repurposing of supply closet contents. Visit most nonprofit offices in your area and I think you’ll be instantly comforted that donations are being well utilized on their work, not their work space.
So how does one educate oneself about which non-profits are most efficient? If you’re the investigative type, I suggest you spend time utilizing Charity Navigator, Guidestar, and good old google. If you really want a deeper dive, learn how to read a 990 – an IRS filing for tax-exempt organizations. But I encourage you to also gain perspective. Take the time to look at information for similar organizations. Understand what is appropriate for an organization of that type. Talk to your accountant friends about the subtle nuances of fund accounting. Guidestar, BoardSource, The Foundation Center, and similar websites have terrific educational material about how to understand non-profit financials. These are far superior sources of accurate information than, say…oh I don’t know…FaceBook. I understand that what I’m suggesting is a research project but if that’s your jam, it’s a great way to really understand where your money is best invested and know that you are rewarding good stewardship.
If that’s just all too much and/or you simply don’t have the time to dedicate to what is akin to a post-graduate research project, then simply go with your gut. Do you feel good about the organization and its management – both staff and board? Do you align yourself with the mission? Are your friends or family passionate about this particular cause? Do you, deep down, think that good work is being done? Have you volunteered your time and fallen in love? Then consider it a good investment.
This time of year serves as inspiration to us all to share what we have with those in need. In my family, we stopped giving gifts years ago. Instead, we give a donation to something meaningful in honor of our parents. My brother and I each write a letter explaining why we chose that organization and our kids clock how long it takes Grandma to cry and Grandpa’s voice to get choked up as he reads aloud. My parents don’t want stuff, they want to know that our money went to something much more meaningful. Everyone wins.
Please give and give generously. I feel like I’ve said this every year since I started in the industry 15+ years ago but times are tough for non-profits. Funding streams are fickle, at best. There’s a lot of competition for donations and too much pressure to reduce expenses. Add to that the aforementioned trust issues. Let’s give our support so non-profit staff can focus on what they do best – solving problems, caring for others, and achieving their missions.