How charitable are charities?
On Stuff yesterday it was reported that the New Zealand Breast Cancer Foundation last year spent 43% of its revenue on administration costs. In a similar vein, from the highly publicised Dancing with the Stars series, 40% of all the revenue gathered from text and the 0900 vote line was also spent on administration (source: Scoop).
While it is reasonable to have overheads for staff, office lease, telecommunications costs etc, where does the line get drawn for reasonable costs vs extravagance?
The Stuff article reminded me of a Voice-over-IP phone system we installed for a well-known charity around 2 years ago (we have since sold the VoIP part of our business to another party). For me, this was an eye opener on how different charities were in reality to how I envisaged them to be.
Charity A (as I'll refer to them) purchased a brand new four storey building in a reasonable area. Since it was old and in a state of disrepair, the decision was made to gut it, and refurbish it completely.
Here is where my issue begins.
The final product was amazing - the office had high quality carpet and fittings, air-conditioning in every room, a fully furnished kitchen with appliances for staff and visitors, and automatic opening glass doors between the different common areas. All of the internal glass was also etched with Charity A's logo.
The building and fit out was, in my eyes, suitable for a top NZ company, not for a charity that is supposed to be helping and investing as much of their dollars into the people that really need it. Charity A could have easily gotten away with much less, and better used the money saved.
Has this whole experience made me cynical? To a point. What it has highlighted is you need to be careful who you are donating to, and don't hesitate to ask how much of your donation is actually reaching the cause.
Charities should be looking to have trustees who have experience running successful businesses, they know how hard it is to get a business started, and should help rein in unnecessary spending. Every dollar should be spent as though it were their last.
Remember: a charity doesn't necessarily mean they are there to help the community, it just means they don't pay out profits to shareholders.
Other related posts:
Vodafone voicemail-to-email for free
Vodafone’s Sure Signal upgrade
How to fix “Message rejected by Google Groups”
Comment by Jessica, on 6-Feb-2010 09:15
I hear you loud and clear.
Animal shelters always hold a soft spot in my heart, so when I donated $100 to a local one a few years ago, I thought that I was doing the most amount of good by keeping the money local. I also thought that my money would avoid being chopped in half by the huge administrative overhead of a national (or international) organization.
However, since then, I have received solicitations in the mail on a monthly basis and various promos like address return labels with cute, furry, lil creatures on them.
While I am happy to use them (waste not want not) I am quite irked that this is what my money went toward.
You have every right to be cynical. You might also be interested to note that The Red Cross uses 80% of donated funds to fund operations.
Add a comment
Please note: comments that are inappropriate or promotional in nature will be deleted.
E-mail addresses are not displayed, but you must enter a valid e-mail address to confirm your comments.
Comment by Jonathan, on 19-Oct-2009 18:10
Remember that not all charity is what we thought of in the past. A new charity structure has emerged called charitable business (its a legal kind of business) which may be more in line with what you have made out?
Charities see themselves as wanting to provide the best outcome for whatever they lobby for. For charitable businesses if it means making an investment now in infrastructure that will expand their reach in the future then they see that as a good thing?