[patejam]

> I see big problems with this type of arrangement - you raise ten dollars while spending five thousand on the event itself. Yet you will call this a charity event?

This reminds me of when people complain about charities paying their CEO well.

Would you rather pay a CEO $100k to bring in $1million in charity funds, or pay a CEO $1million to bring in $5million in charity funds?

Same here. Would you rather run a successful event that brings in $5k in charity funds, or an event run by amateurs who end up bringing in $1k in charity funds?

There's an argument to be made about transparency, and organizations that take all this too far (90+% is clearly too much), but end results matter.

[alasdair_]

>Would you rather pay a CEO $100k to bring in $1million in charity funds, or pay a CEO $1million to bring in $5million in charity funds?

Personally I'd rather pay five CEOs $100k each to bring in $5million, than one CEO double that for the same net effect.

There is only so much money people will give to charity in a given year. It's entirely possible that the larger charities with higher expense ratios starve out smaller charities that are more efficient at spending the money the receive, so the net effect is worse.

[patejam]

That's assuming the five CEOs aren't going to go after the same $1million each. A more talented CEO might be able to bring in new streams of money.

Y'all are bringing up a ton of hypotheticals that don't matter to my main point: Talent costs money. The optimal end result may end up spending a lot of money on that talent to bring in the most amount of money.

This includes hiring an agency to run a fun run (the original scenario) when having it be run by amateurs might end up with it failing for a million reasons (low turnout, insufficient staffing, etc).

[triceratops]

"Talent costs money"

And yet that argument is never made to justify paying line-workers more. Non-profits often pay regular workers less than public sector or private sector jobs because "the mission is the reward". Shouldn't the same apply to non-profit leadership?

[patejam]

>And yet that argument is never made to justify paying line-workers more.

This isn't an argument to "justify paying the leadership more". That's backwards. This is an argument to say that when you're a board member trying to fill a leadership role, it might be worth it to spend a good amount of money to bring in people who would otherwise never take the role.

If you want a line-worker argument, it's similar to when people start trying to outsource software work to cheap firms and are then surprised when the results aren't satisfactory. Bring in line workers (software workers in this case) who cost more but are better and you might have better end results.

You shouldn't just pay the outsourcing firm more money and expect better results. In the same way you shouldn't "justify paying the leadership more", you should find leadership who are worth more money.

In both cases, it's possible you find the holy grail of someone wiling to work for the cause for little money and are also talented, but it's much more difficult.

[triceratops]

> work for the cause for little money

I never said "little money". Leadership roles signify high status, so you have to pay an upper-middle-class or upper class salary for the area.

But is it not fair to assume that nearly everyone who cares more about the money and is talented enough to take a leadership role, has already gone to the private sector? A desirable CEO candidate determined to stay in the non-profit world is far more likely to look at whether the org excites them, than how much it's paying (again, as long as it's an upper-middle to upper class salary).

For line workers it really may just be a paycheck.

[DonHopkins]

Talent may cost money, and there are a few highly sought after precious examples of those people, but the world is swarming with parasites with absolutely no talent but lots of social standing they want to maintain by being seen as acting charitably (like Trump's failsons), desperately competing with each other to con you out of your money, and that's what you usually end up with.

[ramraj07]

In principle a competent CEO who truly brings in "novel" money to a charity more than a cheap one is worth it. Note my use of the word Novel above because it is to differentiate between money a charity makes by just poaching money that would have gone to some charity anyways from money that would not be spent philanthropically otherwise.

If Robin Mahfood can justify his 400k CEO paycheck for "Food for Poor" (real name and number) and also promise that all the new money he brought in was actually money that would have been squandered otherwise, then Robin Mahfood is indeed a worthwhile expenditure. I doubt that's the case most of the time, though.

Nevertheless, these might not be comparable scenarios anyways - an expensive CEO might atleast make financial sense if not a moral one. It's just a stretch to say a very low margin charity event is even a financially viable event, and hopefully your million dollar CeO can see that and avoid it for his charity.

[kortilla]

> charity makes by just poaching money that would have gone to some charity anyways

No, “money going to charities” is not all one bucket. A huge chunk of charities are incompetent or are just stupid ideas to begin with. It’s better for 70% of my donation to go to a competent charity than 90% to a pointless one, even if that 20% difference is going to the CEO.

Checkout givewell.org to learn about the importance of picking good charities. It is critical to poach charity money from bad charities.

[pbhjpbhj]

>Would you rather ...

How are they going to raise the money, does the one raising $5M blindly do so by enlisting a third party to pay poverty wages to young people to con pensioners out of their money (usual way is to trick them in to signing a monthly payment when they think they're paying a one-off [to get rid of the annoying person invading their home]) on the doorstep?

Do CEOs only act competently for immoral sums of money?

How about the CEO does an honest days work, raises what they can without defrauding people and gets paid at most, say, 3 times the median salary of everyone employed by the organisation?

There's a good chance that even if the CEO is honest and completely above board all they're doing is stopping other charities getting money. That is, splitting the pot differently. So, perhaps the $100k is far better - was overall the charity sector gets more to spend on charitable aims.

[vkou]

100k may be better for the overall charitable sector, but its worse for this particular charity. It's the tragedy of the commons. It's a well-studied problem, and there's no non-centralized solution to that problem.

My wife worked for a non-profit theater (12 million/year budget, 4 million from donations, 8 million from ticket sales. Most of the donations are from major donors - 5K and more.) Its 'CEO' was the best-paid person in the theater, paid ~230k/year. The stagehands, who were making ~$25/hour would grouse non-stop about how much he was paid. From what I know of him, and his job, (mostly fundraising), I am almost positive that he was a profit center for the theater. If he left three months from now, their financials would not improve.

Now, it's entirely possible that someone else in his position, who would take the job for $130,000/year, and would raise as much, or more money. Or maybe someone else would raise even more money, and expect $500,000/year.

I think that for that particular theater, they'd probably be wrong to fire their CEO, if their goal was to cut costs.

[patejam]

A very pessimistic view of everything!

I can't say anything about your fraud or conning comments. Obviously that's bad, and I worry that you're arguing in bad faith by bringing that up.

My main point is that being the leader of a large organization that brings in lots of money is a skill that is highly sought after. If you want to attract that kind of person then you'll have to pay for it, or find the 1 in [some large number of people] that has both the skills needed and the willingness to work for much lower than the rest of the market would pay them.

[triceratops]

Frankly non-profits and for-profits are usually not competing for the same CEO pool. And for non-profit leadership, compensation should not be a motivating factor - assuming they're already paid enough to live an upper-class lifestyle in their area. The mission of charity should be what matters.

[heavenlyblue]

Well, if the charity is run for your own ego, then I would prefer the one who brings 1M.

In most realistic scenarios I would pay attention to efficiency first.

[patejam]

What if you prefer to get the most money you can to the cause that you care about?

[heavenlyblue]

I would prefer to invest in 5 charities instead.