So there I am at the box office of a local theater, buying a ticket for a movie.
“$10.75,” says the young lady on the other side of the glass.
I am still reeling in shock (When did movies get so expensive??), when she hits me again.
“Wanna give a dollar to children’s cancer?” she asks.
She gives me a look that just screams “Come on, Cheapo…it’s ONLY a buck.”
I look around. The older woman behind me is eyeballing me suspiciously, as though she just KNOWS that I want to say no. Behind the glass, the young woman chomps her gum impatiently, her finger poised over the touch screen on her register, awaiting my momentous decision.
What can I do? I’m trapped.
“Yeah…sure,” I mumble. “Why not?”
But Why not? is precisely the question…or maybe it should be Why? Why give, even a dollar, to an appeal as nebulous as “children’s cancer”? Never mind that the young woman’s choice of wording made it sound as though I was donating to a disease, the point is I had no idea what, exactly, I was giving to….and neither do many of the rest of us.
In its June 13,2011 issue, Time Magazine reporter Bill Saporito had an article on so-called cancer charities. “It’s not that the National Breast Cancer Research Center is a scam,” Saporito wrote, but it “raised $12.7 million in 2009, spent 52% of it on fundraising [and] spent exactly $487,505, or about 4% of its income, on research.” Saporito also mentioned the National Charity for Cancer Research. That group took in $5.3 million in 2009, of which zero seems to have gone toward research.
What’s going on here?
Well, several things.
The first is that we are a giving nation. Americans give more to charitable causes of all sorts (2 percent of our disposable personal income in 2010) than any other nation on Earth. We give in times of national disaster (Katrina) and international disaster (Haiti and, most recently, Japan) alike. We give to major familiar appeals –United Way, The Boy Scouts, the Red Cross) and to very often vague requests like “saving homeless puppies,” “feeding the hungry”, and “community youth programs.”
We give emotionally, as when a friend or neighbor asks us to donate to something for which they are collecting contributions. “If my brother/mother/co-worker/friend is asking,” we subtly and unconsciously reason, “it must be for a good cause, right?” We give based upon historical ties, as in “I was in the Girl Scouts as a kid; I am going to support the organization and the new generation today.” We give, often, based upon personal experience with tragedy, as in “My father-in-law died from heart disease; I am going to support heart disease research.”
A celebrity-intoxicated culture, we give when a familiar Hollywood face is somehow attached to the appeal
We also give impulsively, as was capitalized upon by a startling fraud discovered in New York City two years ago. Based upon the idea that people will give spare change and the loose dollar bill (or more) without asking too many questions, a scam called the United Homeless Organization sprouted more collection sites than mushrooms after a rain storm in the NYC area. For several years these tables, with plastic water jugs atop filled with coins and bills, were a ubiquitous sight around the city, particularly places like the front of Grand Central and Penn Stations. But then in 2009, Attorney General Andrew Cuomo filed a complaint charging that his office had determined the UHO wasn’t a charitable organization at all. Rather, it was basically just a couple of people who rented out equipment and a brand identity to homeless people, and then made a tidy profit off of their panhandling.
Did anyone learn anything from that incident?
Not really, as the appeal at my local theater illustrated.
Curious about how successful that particular campaign actually is, I contacted the theater’s manager. Not wanting this fellow to lose his job, I will keep the details sparse, but he essentially told me that about 25% of his customers give the dollar they are asked for. Part of a chain, his theater was but one of a large number running this appeal. I did the math. We’re talking about thousands and thousands (…and thousands) of dollars here. I learned that several major charities were the eventual recipients, and that the chain had been doing this –and giving to those same charities- for years. It all seemed legitimate…once I had some names.
“Doesn’t anyone ask where the money is going?” I asked the theater manager.
“Hardly anyone,” he replied.
“Well, why not just say that it is for this foundation or that organization?” I asked.
“If you give them a name and they’ve never heard of it,” he told me,” fewer people give. But if you give them a cause, like ‘cancer,’ they just give. It’s also faster; fewer questions to answer, which helps the line move along.”
The problem, of course, as Greg Simon, a board member and former head of FasterCures, a nonprofit focused on improving medical research, told Time’s Bill Saporito, is that “The general public is throwing its money away. I shudder,” he said, “when I look at how many groups have ‘cancer research’ in their names,” and are capitalizing upon that implied connection to legitimacy.
But it does not end there. In a quick survey of my general neighborhood (well…not so quick, actually…it took over two hours, as I scouted out several local stores and three local malls), I found one grocery and one drug chain that were running or have run appeals like that at the theater, and no fewer than seven stores with jars on the counter for contributions to causes ranging from homeless pets to the environment. And from the evidence, people were giving.
Sadly, as the Time Magazine article noted, the cost of badly managed charities isn’t just wasted money. People are suffering and dying while these outfits mishandle funds that could go toward actually improving any number of situations. As Ken Berger, the President and CEO of Charity Navigator, has pointed out, every dollar that goes to an ineffective “charity” is taking money away from those that are actually doing some good…and that is not even counting the money that winds up going to out-and-out frauds.
All this raises three questions:
- Are institutions like foundations or government any better at separating the good from the bad when it comes to nonprofits, or are only individual donors being victimized?
- Are current safeguards against fraud sufficient? Should the sector be doing more to police itself?
- What can we do in the present circumstances to better ensure that charitable dollars actually go to not only legitimate charities, but those that are really contributing to solutions to the many problems we face?
We’ll begin addressing those questions in the next edition of this blog.
Thanks for your article. I am floored by the abuse of dollars not only as you suggest here but in the amounts of money that go missing from the big trusted 501c3′s
The magnitude is startling. The more so coming from a 501c3 charity that was started with nothing but the vision that it was the right thing to do, the right time to do it, with the right venues to offer to the world. When I hear the salaries that some of the CEO’s of non profits are making – well it brings to mind that greed has very successfully permeated every segment of our society, an addiction that will continue to erode the best of our nation.
Dan…
Thanks for taking the time to comment. There are a number of factors involved here. Among the biggest is that many people assume that all nonprofits are run by saints and that those nonprofits are all having a positive impact. In sum, many people take it on faith that their donations are going to “a good cause.” Added to this is the fact that most people ask neither where a nonprofit’s money comes from, nor to they generally ask where it is going. All too many nonprofits exacerbate themselves this situation by effectively telling the public very little. The problem is that, in a society where we have come to expect that “somebody,” some government agency, some investigative reporter, some regulator, is providing oversight in so many areas from food safety (FDA) to working conditions (OSHA), many people assume that someone must be watching the nonprofit sector…that everything is not only above board, but well managed and effective. So the question becomes, what can be done to foster such standards where there is, in fact, no “nonprofit police”? Those are subjects we’ll be covering in the next installments of the blog.
Hi there, i just wanted to drop you a line to say that i thoroughly enjoyed this particular post of yours, I have subscribed to your RSS feeds and have skimmed a few of your posts before but this one really stood out for me. I know that I am just a stranger to you but I figured you might appreciate the appreciation
– Take care – and keep blogging.
Well thank you. I really don’t consider anyone here to be a “stranger”. I am glad you have taken the time to check in; I hope you continue to do so. From the responses I have received (90%, oddly, through LinkedIn) I hit a nerve with the last post. There will be more on this subject. Please stay tuned.
Nice article Bob. We have been trying to get into [local movie theater chain's] rotation for years. When I started our non profit, I had no experience. I am a mechanical engineer. I hired a program director with 22 years experience to counter that.
She called me Polyanna because I believed EVERYONE in this business was on the up and up and only concerned about helping people. Well, 3 years later, I have been shocked and appalled at the scams and con man(woman) in this industry.
I still believe but have a healthy amount of skepticism towards other non profits.
Well, Ray, MOST people in the sector are on the up and up. The problem is those who aren’t. In my experience, there are three classes of these characters: There are those who, yes, are simply thieves and scam artists of one sort or another. Some of these, it must be added, are professional fund raisers who take an unconscionable proportion of every dollar raised for their “services.” A second set are those who, for various reasons, keep running programs and efforts they know are largely-if not completely- ineffective. Thirdly, there are those who say they are doing one thing, but actually do something else or virtually nothing at all. I came across one such program a number of years ago. It was supposed to be providing funding to launch minority-owned and women-owned small businesses with a eye toward economic self-sustainability within the target population. The efforts to which it was actually giving money, however, were laughable. And yet, every year it successfully put in grant requests based upon the premise that it was helping the underserved. Ultimately, it is the funders’ responsibility -and here I count individuals, institutions, and government- to know, to really know, what is happening with the money they provide. Sadly, that is still a weak link in the chain.
Please keep coming back. I thank you for your comments.
After being approached everywhere from Walmart to the movie theater, and even in front of Dick’s sporting goods, and having over 15 years experience in fundraising, I decided to craft a ready answer so that I didn’t give without thinking, but also didn’t have to be rude. I simply say that our family does our giving on a monthly basis and that if they have some literature they would like to share I would be happy to take it for review and consider their request when we plan out our future giving. I use a similar response when people call on the phone–we don’t give to organizations over the phone (or to those who use paid solicitors), but would love to have them mail us something to consider. It has made our giving much more thoughtful and doesn’t put us on the spot.
That is an excellent idea. Another follower of this blog tells the tale of recently having a young man come to his door, apparently looking for a donation. This gentleman invited him into his home, asked questions, and was fairly impressed. Then the young man made his actual pitch: magazine subscriptions. The gentleman said no…but said “Give me some info about the organization; let me check them out. If they are legit, I WILL donate.” The young man got up and left in disgust.
The problem is that we have unwittingly created the notion that all we need is to be asked and we will give…no questions asked. Not only do scam artists count upon this, but so do many otherwise legitimate organizations. Why is it, that in this “information age” there is so little actual information on the websites of many nonprofits?
We need a mind-set shift here. I applaud you personal effort in that direction, and think more people (me included!) should follow your example.
I am asked for $1 donations at the grocery store, at K-Mart, at Bob Evans’ restaurant, etc. I simply smile and say “no, thank you” when I really want to say “Actually I give thousands of dollars every year to organizations that I have carefully researched (via Charity Navigator) whose missions I support.”
I spent many years volunteering with a major national charity to improve its financial performance and I must say that the beauty of the $1 retail appeal is that it has virtually no overhead and can raise large sums quite easily. Much more cost effective than the golf tournament or charity ball. For the average American it is “just a dollar” so it doesn’t make economic sense to do the research. As a consumer it annoys me to think that the grocery chain or movie theater chain is getting social marketing credit for the donations of their customers.
On a separate thought, you note that Americans give more to charitable causes than any other nation on earth. Well, in Europe you don’t need to have a fundraising dinner at the local fire hall to raise money for little Susie’s cancer treatments. You pay taxes and the government funds those medical expenses….effectively a grander scale of the $1 donation at the movie theater.
Thank you, Kathleen, for taking the time to respond. You touch upon a number of points. First, the “$1 donation.” The sad thing is that slick fundraisers have come to realize that this is a very effective way to raise money. More direct than the passive jar on the counter, but less intrusive than an appeal asking for amounts that might touch off an emotional trigger (the reason, I have long been told, why stores offer things at $4.99 instead of $5: apparently, $5, $10, $20, etc are psychological “stop points.” $4.99, being “under” $5 seems to avoid that). Whatever the psychological rationale, it is clear that these $1 appeals work…because people will either give, or not. But if they give, they will rarely ask where the simple, meager, $1 is going…and more are likely to give the $1 than they would be to give $5 or more.
Secondly, you touch upon the grocery chain’s motivations. A sad truth is that many (many!) businesses that engage in “community support” do so primarily for the PR value. They not only often do not know whether their efforts are actually doing any good, but a lot do not care. What they care about is appearing to be “involved, and to be “giving back.” The issue of “effectiveness” is many, many times, simply not on their radar screens.
You mention the European model. Yes, there is a vast difference between America’s “government by contract” where, for various political reasons, government pays for, but does not directly deliver services, and the European model under which government is often the direct provider. It is a difference in culture, the result of a strong European socialist strain of thought that never took root here, and the calculation made in some circles that such services would cost even more if government employees (with their pensions, benefits, etc) were the ones delivering the services. In Germany, by way of one illustration, the government provides money to churches for various purposes. The taxpayer indicates on his or her tax form which denomination they want to support. Here, of course, we can’t do that…and so you have the Bishop’s Appeal and similar denominational fund-raising efforts.
finally, you mention that you do give to organizations you have researched and whose missions you support. I would suggest that it is not only a question of “mission,” but also of effectiveness…a consideration that should be part of every donor’s calculations.
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Thank you. I am on the road at the moment, but will be adding a new blog within a few days. Please check back again soon.
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Thanks…and Welcome Aboard!