That was the question recently posted on Quora. The person asking had been asked to sponsor a friend to run the marathon in aid of Cancer Research UK.
Many of the responses on Quora agreed: It is wrong to donate, many quoting high costs of fundraising and administration and high salaries as the reasons.
Here is my answer.
This is a very big and important question. Just like any sector, there are a few baddies who give their peers a bad name. These are crooks or incompetent people who should be prosecuted or fired.
But it is an incredibly small proportion — it is just that they are the ones who get on the news.
I used to work at Cancer Research UK when it was called Imperial Cancer Research Fund. That was the early 90s. One year out of university, and on a lot lower salary than my fellow graduates.
I think we were raising about £50 million for research then. It was £600 million in 2016. That’s an awesome achievement for my successors, and those funds have had a massive impact in progressing cancer research.
I wanted to do good with my life. I have stayed in charities ever since. My university friends got jobs in insurance, building, pharmaceutical and sales, and as doctors, engineers, and lawyers. They were all paid more.
Despite a tiny number of excessively paid CEOs of charities (I only know of stories of multi-million dollar packages in the USA), most top paid CEOs of £200m fundraising charities to receive maybe £120,000.
For many people, that may sound excessive.
But their equivalents in cigarette companies, sales, mining, supermarkets etc. are likely paid anywhere from two to ten times that.
Imagine two friends leave university with similar qualifications. After a while, one is a charity CEO, and one works for a tobacco firm.
Ten years into that job, the tobacco employee will have earned over £1,000,000 more than the charity CEO.
And the tobacco guy donates a total of, say £250,000 to their friend’s charity, they are a philanthropist and a hero.
They are featured in Monocle and the Guardian Magazine, and everyone congratulates them.
They should be praised for their gift. But what about the other bloke?
The charity CEO sacrificed much more financially, but gets hammered by the press and looked upon as though he is doing something bad.
For me, they are both heroes.
Being paid £120,000 is a lot. But no charity people I know of in the UK, and next to none in the USA and Canada earn the massive super bonuses people worry about.
They are always paid less than peers doing the same job in non-charities.
Why are they penalised for choosing to use their skills for good?
Firstly — it costs money to ask people to donate. And people don’t give much without being asked. Many claim they “decide themselves” without being asked. You could be one of those.
But unsolicited donations account for less than 1% or 2% of donations for most charities.
Not asking would reduce income by at least 95%. It would wipe out most charities.
Anyone who thinks of fundraising and administration costs for charities as a waste needs to take a moment to rethink.
Imagine a charity helping feed hungry children in an East Africa famine.
They have an overhead of 10% and fundraising costs of 30%. (This is about right for a stable, established charity that is not on a new growth spurt.)
They might ask you to donate £100. You might ask, How much goes to help starving people?
The answer is 100% helps the starving people.
Why not 60%? What about the 40% fundraising and administration?
Without that 40%, no help would be going to the starving. The charity couldn’t have existed, couldn’t have asked you for the money, couldn’t have people on the ground, would have no programs to do anything at all.
You get the idea.
So, let’s rephrase it.
When you give £100 I will spend £30 on raising another £100, thereby multiplying your gift dramatically I will spend £10 protecting your investment, ensuring we have the right security, licences, registration, training, virus protection software, communication systems, accountability in the field and more. Without any one of these none of your gift would get through. The starving people would get no help at all.
For more on this check out The way we think about charity is dead wrong by Dan Pallotta, speaking at TED.
Should you donate to your friend doing the marathon?
That is up to you. Running a marathon is a way to raise funds that otherwise would not have gone to a good cause.
A monthly donation to Cancer Research UK would help even more.
This is an edited version of my answer published on Quora to the question “Am I wrong for not believing in donating to charities?”
My advice: DON’T ever visit Quora, or you will be dragged into an addictive geek-dom of inane questions that suck the hours from your life.
How would you answer this question if you were asked? Please share your ideas and answers by leaving a reply below.
This is so clear – thank you – I know many of us in the fundraising/charity and philanthropy sectors struggle to justify “admin” and “fundraising” costs, so this is a helpful reminder of why our work behind the scenes is just as valid as the direct aid/benefit to beneficiaries and recipients.
Thanks Sharon. And a problem with bosses. As a consultant, I hope you can influence more boards and managements in charities!
I used to work for an organization that turned out to be committing charity fraud, so this is a topic close to my heart. I usually tell people some iteration of what you wrote, but also that, yes, giving is a risk, but it’s a risk worth taking.
After I quit my old job, I went through a period of time when I swore off working for nonprofits. I felt terrible about having unknowingly cheated so many people. How could I confidently promote a nonprofit ever again?
But then I realized this: If we all refused to work for nonprofits, we would guarantee that we’d never be cheated by one. But we’d also guarantee that a LOT of good in the world wouldn’t happen either.
Every time you do something good, you risk being taken advantage of. At some point, that risk will catch up with you. I guarantee it. But I think if we love one another, we’ll take risks to help one another. I will risk being cheated so you can have shelter tonight, so doctors can find a cure for your disease, so you can have clean water to drink. …And just to be on the safe side, I’ll give to lots of organizations so I’ve upped my chance that my money will do something good.
Sorry I didn’t reply earlier – you make a really good point about risk. But the risk / reward is definitely in favour of a good outcome. On “Every time you do something good, you risk being taken advantage of” I think it is those rare nasty, selfish people who do this, give the sector a bad name. If we don’t trust, they harm us twice.
I’m glad you visited Quora this time. 😉 Could not agree more on the issue of overhead. Here’s a link to an article I wrote on “What to Say When Your Donor Asks You How Much You Spend on Overhead.” http://clairification.com/2013/11/03/what-to-say-when-your-donor-asks-how-much-do-you-spend-on-overhead/
Just letting you know I just shared your article on LinkedIn. I kept meaning to read it, but you know how it is. I just got to it and reckon everyone else should read it too… Ultimately, it should be about ‘what is the net good?’ not ‘what percentage of money…?’
I suspect much of this is because of plain ignorance about how businesses and organizations work. People believe stuff just “happens,” and that “volunteers” can do it all. Except those people have never volunteered before, because if they did, they’d quickly get overwhelmed with how much there is to do. Anything worthwhile costs something. In my experience as a fundraiser, paid workers get it done. Volunteer workers support the paid ones. But volunteers simply can’t do the tasks that require consistent, ongoing attention, because they have lives and jobs and other priorities.
Case in point: On a campaign we ran, we had 4 people take on our social media marketing at different points in a year. 3 of them were volunteers. Guess which one posted every week, consistently? The paid one.
This same argument can be made about churches. Most pastors, even of large churches, make far less than leaders of similarly sized organizations. And yes, there are a few exceptions who give the rest a bad name. But running a church takes enormous diversity of skill and commitment, just like a charity. Should a minister be paid for doing this full time? Well if they weren’t, there’d be no churches. People have to eat and pay the rent.
Hi again CopyDan!
If only people were paid appropriate to their skills needed and their impact on society… We would never have had Donald Trump in the White House, but whoever was President may have different approach – and a decent salary!
But how much has been taken out before admin and CEO’s. My friend collects for the Cancer Council rattling a tin and gets 40% BEFORE admin and CEO etc.
People assume she is volunteering.
At least get rid of these middle men. She told me “in secret” because the Cancer Council told her not to tell how much she is paid.
Sounds like a bit of misunderstanding there for your friend.
I don’t know about tin-rattlers’ pay, or percentage payments, but I do know – as per Dan’s point – that a person paid to fundraise is likely to raise more, even after they are paid, than volunteers. If we took out people from being paid to fundraise, the $1.6bn raised by the charities in the Pareto Benchmarking study of fundraising would likely have been less than $100m. That is a lot less good being done in the world.
I appreciated the article. It mirrors my experience of working on two NGOd and coaching many others.
I recently heard a phrase which challenged me personally “The King judges not by what you give, but what you keep”.
While working at one NGO we were alerted to donors who were giving significant amounts quite regularly. I spoke with them and discovered that there approach was that when they bought anything of significance they gave away 10% of the price. Wow!
I love that approach from those donors. My partner and I bought tickets at the football* World Cup in Brazil.
To be honest the tickets were very pricy – but we are fans and Germany v Brazil semi final – in Brazil – a lifetime opportunity!
When we got home we donated the same amount to charity. So those tickets cost us twice the price! It was worth it though.
*Note to Americans, Aussies and Kiwis – ‘football’ is the round ball game where you use your foot, not American or Aussie rules or rugby.
Here’s another way to illustrate the absurdity of using ratios as the standard for judging charities: when you go to a restaurant, the bottom line is that you’re purchasing food. And most restaurants keep their food costs at approximately 30%. So the other 70% of your bill? It pays for the rent, the labor, the lights, the water, the insurance (and maybe lawyers, accountants, franchise fees, national advertising campaigns, and shareholder dividends). But nobody has ever compared restaurants based on their “ratios”. And they never will.
I like it! Same for any other business.
Charities are expected to be different. It is up to us to change that narrative.