01 April 2007

Charitable Feedback

A.D. Freudenheim, The Editor

Towards the end of every year, my household takes a good look at its finances and sits down to write a few checks – small charitable contributions to organizations we want to support. From year to year, many of the organizations are the same, since our interests or commitments remain steady. In the preceding 11 months we will also have received a number of unsolicited letters asking for support.

Mission aside, the most respected organizations in my household are the ones that take great care with us as donors, and a few deserve to be singled out. Mazon: A Jewish Response to Hunger, the North Country School – Camp Treetops, and The Piatigorsky Foundation are uniformly the best and most responsive, receiving every contribution gratefully and responding with both the necessary receipt letter and a personal note. In fact, last year one of these three even left a message on our answering machine, apologizing that their annual fundraising letter had crossed in the mail with our contribution, and hoping that we would not be offended. So consistently strong have their responses been that we will likely be rethinking how much money we donate and whether we should re-allocate our contributions in the future.

Similarly, other organizations cannot get their act together – which also has an impact. The New York-based Coalition for the Homeless has responded to our end-of-year contributions by sending multiple letters asking for funds throughout the year. Maybe that explains why Charity Navigator ranks them with one star out of four, showing that they spend 15% of their annual budget on fundraising, another 15% on operating expenses, and have to spend 34 cents to raise every dollar. (Compare that to Mazon, which spends just 12 cents to raise a dollar, and ranks an overall three stars.) WNYC, my local public radio station, is a terrific resource and I remain committed to supporting them; but here, too, the multiple letters throughout the year start to rub the wrong way, and it’s no surprise that Charity Navigator shows that they spend 25 cents for every dollar raised. Another non-profit which hits us up has often failed to spell my name correctly; this might be an offense easily overlooked, were it not for both familial board connections and my own (failed) attempts at having the spelling corrected in their system. Oops.

If these complaints sound petty, consider the failure of reason and management in this situation. As is proclaimed endlessly, we live in the age of technology, of powerful information systems like the one you’re using to read this right now. Non-profit organizations maintain databases of actual or potential supporters – and they should be able to respond to requests to fix a misspelled name. Likewise, after many years of end-of-year contributions, these systems should be able to analyze my giving patterns, and figure out that checks consistently written in December are unlikely to be forthcoming in May. As much as I don’t blame them for trying, well, I do blame them for trying: it not only adds to the volume of (junk) mail and wasted paper, but it means more funds not spent on the organization’s core operations.

And speaking of core operations, I recently received a letter from UNICEF, with a large block of text that said “A nickel may not seem like a lot of money...but it could be enough to save the life of a child!”. Attached to the letter was an actual nickel! Wow! A non-profit so wealthy, it’s sending me money! The cost of postage was probably 15 cents, and let’s guesstimate that the overall cost of the printing was perhaps as low as 5 cents – despite the color printing, the mechanics needed to affix the nickel, and the extra cost of the free return address labels they provided. Therefore, the total cost of the mailing was 25 cents; this was, if nothing else, 5 cents too much: that nickel could have been used to help save the life of a child, as they so insistently told me. Instead, the nickel caught my attention in all the wrong ways, encouraging me to research others who also did not like this approach. To send it back to them, by itself, will take 39 cents. This is not efficiency.

Ironically, Charity Navigator ranks the United States Fund for UNICEF with four stars, showing that it spends only 6 cents to make a dollar. Amazing, since the solicitation they sent me cost them at least 5 cents cash! The site shows they spend 6% of their budget on fundraising, which sounds low relative to the other numbers I have mentioned – but consider that 6% of the US Fund for UNICEF’s annual expenses of $464,665,162 is $27,879,909. The $27 million spent on fundraising each year is more than the entire budget of the Coalition for the Homeless ($9.5 million) and Mazon ($6 million) combined!

Let me write that again: the United States Fund for UNICEF spends more than $27 million just on raising more money. According to the information in the letter they sent me, a gift of $35 can immunize two children – which means that their $27,879,909 could have been used to immunize 1,593,137 children, instead of being applied to sending nickels to people like me.

Of course, not everyone likes Charity Navigator’s methodology (e.g., this item from the Stanford Social Innovation Review’s blog) and perhaps that is because a straightforward analysis of an organization according to its numbers can reveal so much and also so little. One can surely make a good argument in favor of UNICEF, while Charity Navigator’s analysis is unlikely ever to take into account the absurdity of millions of nickels sent to theoretical donors. Granted, too, that one does have to spend money to make money. But in many ways, UNICEF’s approach seems arrogant and extravagant. Neither of those are qualities that make for good non-profit management.


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