Ken Stern, a former CEO of NPR, chronicles ways in which non-profits are financial nightmares…from overpaying CEOs, to failing to deliver on programatic 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 that non-profits are often judged on their ratio of programmatic spending to overhead. Big overhead = bad. Oh, how I wish that donors would see a big picture. Non profit employees often earn less than for-profit counterparts and are still expected to have the same level of investment in terms of 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 suggests greater government oversight, a requirement for non-profits to reapply for their government non-profit status, and for non-profits to invest more time and energy into measuring the results of their work. But, for donors, some of the onus is on us to dig deeper into organizations we wish to support–he urges us to look beyond HOW the money we donate is spent to the RESULTS of that spending. Certainly good advice! If you need some help deciding or don’t wish to do the research yourself, GiveWell.org is a great resource for reviewing charities you are considering.
I am also asked frequently what organizations I donate to– sometimes knowing someone in the industry is helpful. I have an eye on the budgets of the some of the places where I work and being in the field helps to know which organizations have an ethos that aligns with my own (like Partners in Health) and which ones do not (like World Vision). If my ethos and values align with yours, I’d be happy to chat!