The other day a friend of mine on Facebook posted an article that caught my eye. The article was titled “America’s Worst Charities.” Since we are approaching the holidays, a prime giving time, I wanted to explore what charities would be “called out” in this fashion. The report, published by the Tampa Bay times, was actually based on research first released in June 2013.
According to a June article from International Business Times, the report was generated by studying the tax records of 6,000 different charitable organizations. Based on the findings, it appears that in the case of 50 charities, only 11 cents on the dollar actually goes where it is supposed to.
Naturally, this all represents a bitter pill to swallow, especially when we find that an organization called Kids Wish Network is one of the worst offenders according to the International Business Times summary. However, there are also lessons that can be learned here.
First, it is clear that NPOs are being monitored more closely and are being held more accountable. This is not surprising. The online world–from websites to social networks–has made information more easily accessible and easier to share. Not that there needs to be a reason for organizations to conduct themselves honorably, but it is clear that the inner workings of charitable organizations are being evaluated with more care than in the past. There is a clear cautionary message: act with caution, and act honorably.
Second, there is a clear lesson to be learned about balancing fundraising costs with your capacity to actually drive your cause forward. The Tampa Bay Times article includes a note that reads: “Watchdog groups say no more than 35 percent of donations should go to fundraising costs. There is no standard for how much should be be spent on direct cash aid.”
As you prepare your budget for 2014, this kind of budgetary ratio can be helpful as you decide how you will approach your fundraising efforts. Perhaps you need to scale back some of your plans, or at the very least perhaps you need to make sure your organizations goals are 100% realistic given the funds you will be able to earn throughout the year.
Finally, it’s important to note that if your organization is exposed as being a dishonorable cause, it can be extremely difficult to recover from that kind of blow. The news about these 50 worst charities is readily accessible via a Google search, and I learned about it from Facebook. Do you think these organizations will be able to reach their fundraising goals for this year or next year? Highly doubtful. The best way to avoid a social media or online crisis to make sure you conduct your business in such a way that no one can say anything bad about you. There is no doubt these days that you are being watched in terms of how your organization actually performs. Don’t end up on a list like this one in the future!