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Insights from Karen Climer about fundraising and nonprofit organizations

How Much Goes To The Actual Cause? All Of It

November 6th, 2013 by Karen Climer

Check out this My Word column in the Orlando Sentinel today.  This woman really knows what she’s talking about!  (I crack myself up.)  This blog posting is a continuation of the column, so read the column first.  But please come back.

One of the criteria I use in my personal giving is if a nonprofit organization includes their overhead percentage in the marketing material (regardless of whether it is 0% or 100%), I will not give to that organization (even if I otherwise love the cause).  Nonprofits created the overhead myth by proudly proclaiming that “more the 90% of your donation goes directly to the cause.”  So it is up to us to solve it.  The nonprofits that continue to advertise their ratios are exacerbating the problem.

When a donor asks me, “How much of my donation goes to the cause?”  My answer is “It all goes toward the cause.  Everything we do here gets us closer to ____(whatever your mission is).”

I can’t think of any nonprofit that can operate without electricity.  Whenever there is a hurricane, we get to try it.  It never works.  So yes, the electric bill benefits the cause.  You can’t operate without raising money.  We tried hoping that the money would just magically appear, and it didn’t work.  So yes, the fundraising expenses help us rescue abandoned animals or feed the hungry or whatever the mission is.

Beginning today, quit advertising your overhead ratio.  Do you really think your overhead ratio is more convincing to donors than a story about the people whose lives you have improved?

Beginning today, when a donor asks you, “How much goes toward the cause?”  Tell them that everything you do goes toward the cause.

This is a hot topic in the nonprofit community right now.  If you have any thoughts about the overhead ratio or how we should evaluate nonprofits, please share them in the comments below.

Posted in Nonprofit issues

4 Responses

  1. Elle

    I agree with this..” Beginning today, when a donor asks you, “How much goes toward the cause?” Tell them that everything you do goes toward the cause.” HOWEVER…salaries can get out of hand, and we’ve all seen it happen. In my opinion, if there’s suspicion of misuse of money, one should ask the tough questions about expenses. Who wants to fund the construction of a football field when there is no team to play? Not me!! Donors must do their due diligence.

  2. Karen Climer

    Elle, thanks for your comments. You are correct that there are nonprofits that pay exorbitant salaries in proportion to their budgets or waste money on stupid things. Those nonprofits deserve to lose their donors. Furthermore, their governing boards deserve to be tarred and feathered. These bad nonprofits are the reason that donors come up with these arbitrary rules like, “I won’t give to any nonprofit that pays their CEO more than $100,000.”

    But, maybe there is a good reason for the salary or other expenses. The donor absolutely should ask questions, as you suggested. Sometimes, you have to dig really deep. Questions hold the charity accountable and get the donor more involved in both the charity and the cause.

    Thanks again for your comment.

  3. Amy Climer

    I tried to read the My Word Column, but it looks like it’s for subscribers only. Oh well!

    Great points though!

  4. Karen Climer

    Try the link again. I made a change so it should work.

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