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Posted by Estela Kennen Nov 29, 2006 |
Only one in ten believe that nonprofits use donations “honestly and ethically”. While individuals and corporations donated hundreds of billions of dollars to charities in 2005, some people speculate that future monies may be in jeopardy.
Heavily publicized scandals are partially to blame. Even unethical behavior that occurred at some nonprofit over a decade ago stays fresh in some people’s minds, and taints their views and behaviors on that and other nonprofits today. Potential donors expect accountability, and rightly so. Unfortunately, it is easier to see when something goes wrong than when things go smoothly – and for the bad taste created to linger.
Another potential problem is the dizzying number of nonprofits. The IRS reports that a staggering 1.4 million organizations registered as nonprofits in 2004. It’s easy to understand that not all of them are the same caliber, but much harder and time-consuming to pinpoint those organizations worthy of individuals’ trust and donations.
Bigger nonprofits are getting more aggressive about requesting donations, which can sour people on giving money at all. For instance, when I signed up for a long-distance calling company that donated 1% of my bill to charities, I ended up on dozens upon dozens of nonprofit mailing lists… all of them making assumptions about my interests and beliefs, and all of them asking for money. They all now summarily end up in my recycling bin. Sadly, the process has made me skeptical about donating to some big-name charity, lest my name again end up being passed along on more mailing lists.
A final point of contention is the way nonprofits use money, even when there is no scandal involved. How much goes to capital costs, administration, fundraising, and other overhead – and how much goes to the actual cause championed by the organization? Nonprofit staff recognize that overhead is inevitable and important, but it is equally understandable that potential donors want to know that their monies are going directly towards a need, and not to pay phone bills or electricity at the central office. (Or, as some reluctant donors must imagine, to pay over-inflated executive salaries – a far distant scenario from the truth at most nonprofits). One potential way around this is to use grant money to pay for overhead and administrative costs, and to use donations exclusively (or at least, mostly) towards programmatic goals.
Has your trust in charities fallen? If so, why? Or, as a member of a nonprofit, what have you done to combat this trend? Will government regulation of nonprofits improve the situation or make it worse? Voice your thoughts in the discussion section.