posted on: Wednesday, May 14, 2008

by Gary Snyder


In my spare time, I occasionally check out the agencies that I contribute to on the Charity Navigator website. I find the site to be extremely well organized. If I need further information, I sometimes go to the GuideStar website to delve deeply into the latest financials. Since I love financial analysis, the time goes by fast-frequently killing 3 hours.

In my exploration the other day I noticed some agencies that further the need for self-regulation or self-regulation of the charitable sector. The matter of regulation has become a hot topic recently. The Internal Revenue Service, the Congress and a few attorneys general have focused in on abhorrent practices at charities.

A few caught my eye as I scrutinized the charitable listings. The issue was fundraising expenses. There are a number of charities that spend more than 50% of their budget paying for-profit fundraising professionals to solicit.

Many of us have heard that the ‘badge’ charities use these fundraising techniques. I was surprised to see that The Committee for Missing Children headed the list of charities that overpay for fundraising. That agency spent over 86% of its income in fundraising fees. They were only able to commit 11.2% to programming. Others were only able to use small amounts for their mission: 3.7% (Junior Police Academy); 6.6% (Coalition of Police and Sheriffs) and 6.4% (American Veteran Relief Foundation) and 10% for the Children’s Charity Fund and the Foundation for Children with Cancer.

The National Children’s Leukemia Foundation spends almost 80% for fundraising and only about 15% for the children. The agency isn’t small with an annual budget of over $2.2 million. Needless to say, the National Children’s Leukemia Foundation received the Charity Navigator’s lowest rating.

The Youth Development Fund is a $3.3 million agency. Its fundraising amounts to 83% of its expenses with only 13% going to children’s education. The Youth Development Fund also received the Charity Navigator’s lowest rating.

Granted, these are just a few organizations that make it incredibly hard to defend that the charitable world that it doesn’t need some intervention. Yes, these are just a few, but as charitable donors get wind of these it only supports the notion that the nonprofit sector can’t or won’t reign in its own.



Gary R. Snyder is the author of "Nonprofits: On the Brink" and a member of NCRP's board of directors. He is a frequent lecturer and author of articles in numerous publications and blogs. His email is http://gary.r.snyder@gmail.com; website: www.garyrsnyder.com, phone: 248.324.3700.