CORRECTION APPENDED. See below.
In 2006, do-gooding is very much en vogue. We live in an era of
self-congratulation, and a happy byproduct of this time is that taking
part in organized acts of kindness is a must for every up-and-comer.
Yes, lending a hand is hip, but the world of charitable giving is very much in trouble.
all their publicity stunts and feel-good lines, many of today’s
powerhouse nonprofits are extremely inefficient. They commit the
majority of their resources to pulling in potential donors through
razzle-dazzle, so that there is little left in the way of resources for
their actual causes. Inevitably, every organization has overhead costs,
but a staggering number of charities today are falling out of control
in this respect.
At one time, the American Cancer Society spent
only 26 percent of its national multibillion-dollar budget on actual
medical research, allotting the other three-fourths to “operating
expenses.” In 2005, the Phoenix New Times reported that the Arizona
branch of the organization spent a gasp-inducing 95 percent on overhead
costs, leaving cancer victims “only the crumbs.” At the Arizona branch,
the nonprofit spends 22 times as much on paying employees, maintaining
the offices, and keeping the coffee machine running than on the cancer
victims they are supposedly aiming to save.
A peer organization
of the American Cancer Society, the Susan G. Komen Breast Cancer
Foundation, is practically efficient by comparison. Still, the
foundation, which organizes the annual Breast Cancer 3-Day walking
events nationally, can only manage to put forward 13 cents to its cause
for every dollar it raises. Those 3-Day t-shirts must be high quality
cotton. [See correction below.]
Of course, inefficiency
is hardly limited to cancer-fighting organizations. The Greenpeace
Fund—widely known for its environmental and conservation goals—is among
the least efficient of environmental charities. It commits upwards of
82 percent of its fundraising to overhead costs. Costly
tree-hugging. [See correction below.]
groups assess and rate nonprofits’ efficiency, equipping donors with
the tools to pick their charities. Charity Navigator, one such group,
ranks charities based on a five-star rating scale of efficiency and
publishes data on the breakdown of nonprofits’ organizational spending.
Charity Navigator bestows only one star upon the American Cancer
Society, while the marginally more efficient Susan G. Komen Breast
Cancer Foundation wins three stars. The popular March of Dimes Birth
Defects Foundation wins a two-star efficiency rating for spending 82
cents of every dollar it raises on overhead costs. [See correction below.]
flaw of contemporary philanthropy, however, is bigger than just the
existence of corrupt and inefficient nonprofit organizations. The
underlying problem is the people that make these bloated charities
possible—it is the proponents of these charities, after all, who are
letting the organizations get away with sleaze. Americans, for all
their supposed generosity, are not discerning enough when it comes to
giving. They pour money into organizations like the American Cancer
Society and the March of Dimes, because these organizations appeal to
people’s publicity sensitivities. Too many worthy and efficient
nonprofits are pushed aside by massive money-eating charities because
donors prefer to go to galas than to actually do good.
the reasons to contribute to the health of society were fairly banal:
general compassion for others; feeling good about yourself as you lie
in bed at night pondering your life; political gains; the occasional
But now, the charity culture has taken on new
form. In the new fundraising world, the strategy is making amusements.
Charitable organizations attract philanthropists through “fun”
incentives. Nonprofits organize events throughout the year that are
booked as good times: the American Cancer Society puts on the Relay for
Life event, and the March of Dimes Foundation organizes its famed
annual walk to save premature babies— with its measly 18 cents per
Few people ask whether their money is being used
wisely, but these events are wildly successful: Americans from a wide
variety of demographics and socioeconomic networks turn up in droves.
People are attracted to organizations like the American Cancer Society
because they are glamorous and glitzy. The nonprofits pull in donors
with promises of celebrity appearances and festive awareness-raising
Although this trend of glamorous charity seems
fantastic for the world of nonprofits, or at least innocuous, it is
actually calamitous, because insincere philanthropy enables
quasi-fraudulent inefficient charities.
Proponents of the
charitable giving culture must seek reform within the shoddy nonprofits
ruling the charity roosts. When giving money, donors should make use of
resources like Charity Navigator to discern between which nonprofits
use funding efficiently and which don’t. Only when this happens will
the nearly-fraudulent charities of America feel the pressure to clean
up their acts.
And until this sort of reform occurs, donors to some charities might as well run their dollar bills through paper shredders.
Lucy M. Caldwell ’09, a Crimson editor, lives in Wigglesworth Hall.
May 15, 2006 op-ed, “Corrupt Charities,” incorrectly stated the
percentage of donations to several charities that goes towards the
people and programs that the charities exist to serve. According to
Charity Navigator, a non-profit organization that reviews charitable
groups, the Susan G. Komen Breast Cancer Foundation spends 76.2 percent
of money on its causes, not 13 percent. The Greenpeace Fund spends 78.8
percent on its causes, not 18 percent. The March of Dimes Birth Defects
75.1 percent, not 18 percent. Charity Navigator
does, however, rate the efficiency of Greenpeace and March of Dimes as
deserving only two stars, which signifies that it “needs improvement.”
The Komen Foundation received a three-star “good” rating.
These significant mistakes occurred because the writer did not correctly read the information on the organizations listed on Charity Navigator’s website. Though Crimson policy is that all pieces must be fact-checked by an editor, the editor of this piece also misread the numbers.
The Crimson will investigate how the writer, the editor of the
piece, and two proofers missed the factual inaccuracies, and will move
to ensure that existing fact-checking policies are strictly followed so
that similar errors will not happen in the future.