Ken Stern, a former CEO of NPR, chronicles ways in which nonprofit organizations are financial nightmares…from overpaying CEOs, to failing to deliver on programmatic promises, and finagling suspect non-profit tax breaks.
He posits that the non-profit machine keeps churning because donors do not do their homework. We donate to a charity when a friend is fundraising on Facebook. We buy the wrapping paper because out nephews are hawking it and don’t give a thought to the beneficiary. And, oh yes, I will gladly buy those Girl Scout cookies (I will gladly support girls empowerment with inclusion of LGBT kids!)!
He also writes about non-profits that have detriment effects–like D.A.R.E. Did you know that kids who went through a D.A.R.E. program are MORE likely to try drugs? There are even more organizations who can’t prove the effect of their work; maybe they have a positive effect, maybe not. In an ideal world, every non-profit will have a skilled monitoring and evaluation team working to ensure that programs are on track. Sometimes, for small organizations, that isn’t quite feasible. When I was a Peace Corps volunteer, I worked at a very small organization with just three of us working full time. We kept track of some key data and could certainly show an effect of some of our work. Could our M&E systems have been more robust? Sure–but that would have required another person on staff!
He makes the point donors often judge nonprofits on their ratio of programmatic spending to overhead. Big overhead = bad. Oh, how I wish that donors would see a big picture. Nonprofit employees often earn less than for-profit counterparts. Yet, employers still expect the same level of investment in their education and professional development. The lowly non-profit workers are often strapped with debt, living with roommates until 35, and eating Ramen for far longer than anyone should. Interested in learning more about this aspect of the book and indulging in my tangent? Watch this great TED Talk by Dan Pallotta.
So, what are we to do?
Stern urges government oversight, for nonprofits to reapply for nonprofit status, and investments in measuring impact of work. But, some of the onus is on the donor to dig deeper into organizations. Stern encourages donors to, yes, consider HOW money is spent but to go further and investigate the RESULTS of the spending. Certainly good advice! GiveWell.org is a great resource for reviewing charities you are considering.
Interested in learning more about this topic? Read more here!