[throw__away7391]

I worked for several different charities for a few years. Supposedly "good ones", a couple of big names. After what I have seen I don't think I'd ever donate to a charity. The CEO's pay is almost the least concern, everything runs according to the whims of people who wouldn't last 5 minutes in a for-profit business. The people donating just want to feel good about themselves or get some positive press for donating. Those are the real customers, that's the real product, and that's what the charity focuses on delivering first and foremost. They have a couple of "showcase" projects/centers/cases they use for the cameras over and over again and the rest of the work is done as cheaply as possible to get their numbers up. The disconnect between the folks on the ground and what's happening in at the home office is greater than anywhere else I've ever seen.

In terms of finances, the real money is in fundraising. From the perspective of the charity, spending $999 on fundraising to raise $1000 dollars in donations is a net positive and huge amounts of money are "wasted" on fundraising efforts. If you want a lucrative career in the industry, being a freelance fundraising consultant is definitely the way to go. You can ask for nearly as much as you can raise and you get none of the scrutiny the CEOs get.

[sokoloff]

I still donate to several causes, and take a slightly different view on the expenses associated with fundraising. No one objects when for-profit businesses spend right up to the microeconomic theoretical optimal point where the marginal profit is zero. Yet we seem to object when charities do it.

If I ran a charity and had an exclusive choice to either spend $X to raise $Y or spend ($X + $0.99M) to raise ($Y + $1.00M), why wouldn't I choose the latter, assuming the charity has a use for the additional net $10K?

Having friends working in charities, it was eye-opening to see the divide between "development" and "programming" in charities. Development (fundraising) rarely struggled for money, so long as they could show a positive RoI. Programming (the actual, intended work of the charity) got whatever was left over, but that seems like the natural and intended way to run a charity.

[s1artibartfast]

>If I ran a charity and had an exclusive choice to either spend $X to raise $Y...

The common criticism of this hangs on how elastic the supply of donor dollars are. If you spend $1M to divert funds from another charity to yours, then the system overall is worse off.

This isn't a perfect model because donor dollars are not fixed, and all charities are not equivalent. reality lies somewhere in-between.

That said, it is all pretty irrelevant because there are lots of groups that evaluate charities on their overhead to benefit, so it is pretty easy to find one with low overhead if that is a concern.

[yial]

So part of the problem is the evaluation based upon low overhead …. What’s low overhead?

Everyone wants to donate to program work, but never to operations.

Even grants that carve out for operations aren’t always realistic.

Major gifts is one of the best ways to get unrestricted donor funds.

You can get a lot of information from the 990 filing of an organization.

In other comments, I agree that in many non profit organizations there are people who might not last in for profit.

Most of those people however are working in roles that are $30,000 , maybe $40,000 a year and there wouldn’t be someone in for profit who would take that role, for that amount of pay.

Overwork and burnout in the field is very real.

Unrelated to that staffing, I would again go back to operational expenses - rent, electricity, payroll etc. Depending on the nonprofit, this may be a huge percentage… but if you have an organization that has a $250,000 a year revenue, two staff to accomplish what their mission is…. What actually goes to program work might be very little.

[s1artibartfast]

It sounds like we agree. I dont have a fixed definition for low overhead.

I just know that im not interested if I see a non-profit with 50% marketing expenses, 30% in other operational expenses, and passes through 20% to the beneficiaries (e.g. medical supplies, research grants, or whatever the stated purpose is).

I would call that high overhead.

This sounds extreme, but some large non-profits actually have numbers like this.

[throw__away7391]

From the charity's perspective, yeah. From my perspective, knowing that of that $100 coming out of my pocket, only a fraction is going to what I am donating towards, and pretty inefficiently at that, and at the expense of some government programs if I write it off, that's not so interesting to me.

For what it's worth I also tend to avoid products that seem to spend a lot on advertising.

[sokoloff]

It's likely less expensive on the government angle that you might think. Take a thought experiment where from your $100 donation, $90 goes to wages of highly-paid fund-raising or executive staff and only $10 goes to charitable "actual work". Suppose that your combined marginal tax rate is 40%.

If you instead kept that $100 to spend on yourself, you would give the government $40 and you could spend $60.

In the case you give it to charity, the development/executive staff pays income taxes on that $90, so if their marginal rate is the same as yours (assuming they're highly paid), they pay $36 in taxes, have $54 to spend, and $10 goes to programming. If it goes to staff paid under $147K, they pay their (lower) marginal rate on it, but the full 15.3% amount for Social Security and Medicare is paid on those funds.

It seems like the government is only out ~$4 ($40 less from you; $36 more from someone else), with ~$10 available for programs.

(The largest loss is that you lost $60 of spending power in exchange for only $10 in programming while development staff got an extra $54 of spending power. You lose way more than the government loses.)

[throw__away7391]

Meh, at the end of the day it is wasted effort. In my experience fund-raising staff were the most talented/educated people I worked with, they could be doing something better with their time and I could be doing something better with my money. You're right that the government is the biggest loser here, and by extension anyone who pays taxes or uses government services. The ability to write-off donations against taxes is a major distortion. There's a lot of fuzzy dealing, politics, and influence peddling going on with charities that I think we'd be better off as a society without.

[Biologist123]

The type of organisation you are talking about, typically styled as NGOs (non-governmental organisations) are anything but. They are in fact huge - often international - delivery vehicles for government funds, with a dispensation to raise money from the public too - hence charitable status. So it’s just as much an issue why a de facto civil servant makes a million bucks a year as does the head of a charity.

And here’s the weird philanthropic angle: as an NGO head you only get access to the government cash spigot if you can show “co-finance”, typically private, which will 3x a philanthropist’s funding and give them huge power in resource allocation.

[8note]

Something. like partners in health makes a pretty clear impact, with the Paul Farmer aims to treat people directly, and not as statistics.

Now that he's died, it might not be the same though