The Darker Side of Charity

October 4, 2008 3:03 AM

Charity Navigator is most interesting for the CEO salaries, but non-profits are a huge segment of society. Melissa Data lists all the organizations with nonprofit status for your zip. This is an excellent rant on one of them.
posted by Bitter soylent (31 comments total)

This will GiveWell...



I'll show myself out.
posted by louche mustachio at 3:12 AM on October 4, 2008 [2 favorites]

This will Gi... oh dammit too late....
posted by gomichild at 3:26 AM on October 4, 2008

I am sorry, this is my first post. Should I not use "this"? It should have said "This disgruntled Habitat for Humanity volunteer has an excellent rant on one of them"
posted by Bitter soylent at 3:53 AM on October 4, 2008

The IRS has a charity search which includes the non 501(c) (3) organiztions omitted by Charity Navigator. Of course, the IRS doesn't rank these.
posted by twoleftfeet at 3:58 AM on October 4, 2008

qualified for a house after donating pussy regul...

that rant was awesome.
posted by krautland at 4:35 AM on October 4, 2008

This is a very limited search engine, to the point that it found -0- npo's in my town. I wouldn't recommend this.

Folks might want to use Guidestar instead.
posted by HuronBob at 4:57 AM on October 4, 2008

I thought his rant was great right up to the point where he wrote about not paying his child support. I'm thinking that feeding his child, at least until it is tall enough to reach into a dumpster on it's own, is reason enough to at least get a part time job. Oh and I second Guidestar as well.
posted by HappyHippo at 5:04 AM on October 4, 2008

It's not the framing of the post, people are making jokes about GiveWell, a similar company that astroturfed mefi earlier this year.
posted by jacalata at 5:07 AM on October 4, 2008

This is a very limited search engine, to the point that it found -0- npo's in my town. I wouldn't recommend this.

My home town of less than 500 had 6. Odd.
posted by Bitter soylent at 5:11 AM on October 4, 2008

Guidestar's free services are good, especially for looking up 990s for the last two or three years. I haven't had the opportunity to try their paid reports and archive services yet.
posted by BrotherCaine at 5:17 AM on October 4, 2008

Here's a bit that is interesting there..on the "donation" page, they state "It costs Charity Navigator $1,000 to add a new charity to our database, and $100 per year to update each charity on our site."

I'm wondering what they do that costs them $1,000 per charity. With 1.4 NPOs in the US, that is going to be one expensive web site to maintain!
posted by HuronBob at 5:19 AM on October 4, 2008

aarrrggg.. that's 1.4 MILLION NPOs
posted by HuronBob at 5:20 AM on October 4, 2008

That Habitat for Humanity ranter is an asshole (and probably one of the table-squatters stinking up my local library), but I have to acknowledge the essential justice of his anger with Habitat and these other donation-magnets that have turned into scams of various degrees of magnitude. In my own city, corporations are patting themselves on the back for sponsoring Habitat for Humanity houses, even as the town is being destroyed, not by the absence of affordable housing, but growing surplus of houses that can be had virtually for free. (While donating some suits to the Salvation Army a few years ago, I discovered that the thug running the intake dock cherry-picked the best donations to keep and sell for his own profit, and was even willing to pay donors who would bypass the SA and send their stuff directly to him.) If you pay attention in life, you come to appreciate the wholesomeness of pure, naked capitalism, where enterprises are regulated by the marketplace, and you succeed by serving actual human needs, not by sopping someone's vague feelings of "compassion."
posted by Faze at 5:51 AM on October 4, 2008

If you pay attention in life, you come to appreciate the wholesomeness of pure, naked capitalism, where enterprises are regulated by the marketplace, and you succeed by serving actual human needs, not by sopping someone's vague feelings of "compassion."

Or the wholesomeness of actual charity (especially small-scale and unorganized) done to help someone out rather than as a scam, conspicuous consumption, or political maneuvering. It does exist.
posted by TheOnlyCoolTim at 6:42 AM on October 4, 2008

Bitter soylent, as others have mentioned, earlier this year there was a big mefi brouhaha about the self-styled charity watchdog GiveWell - thought you might want to read about it. Thus all the references and some of the cynicism.

Congrats on your first post. It just happened to trigger a cherished bit of mefi history ;-)
posted by madamjujujive at 8:01 AM on October 4, 2008

Speaking of GiveWell, the dude who lost his board position for astroturfing ("Effective January 3, 2008, Holden Karnofsky has been removed from his position as Executive Director of GiveWell and from his position as Board Secretary") got it back last month ("(Holden was added to the board at a meeting on 9/8/08. A recording and minutes from that meeting will be available shortly.") He's once again Secretary of the Board of Directors.

He also writes their blog and lately gave a talk at Google. So all's well that ends gives well, I suppose.

Except that, well remember their mission is to "perform in-depth research on charities to help people accomplish as much good as possible with their donations"? Yeah. Apparently that part isn't going so, uh, well (emphasis in original):

Because of our commitment to make one grant per cause and our overly rigid and narrow definitions of "causes," we feel that we allocated our grant money suboptimally..... We plan to research fewer, broader causes in the future, giving ourselves more flexibility to grant the organizations that appeal to us most.... In our first year, we focused our time and effort overwhelmingly on getting information from applicants, as opposed to from academic and other independent literature. Applicants found this process extremely time-intensive and burdensome, particularly given the size of the grants.... We are modifying our research process.... In an attempt to increase our research capacity, we hired our strongest volunteer in January, but terminated the relationship at the end of May. We have mutually agreed that, at this stage of our development, we can't provide the training and management necessary for someone of his skill set to add significant value.

Or in other words, their raison d'etre is to perform research to maximize the effectiveness of charitable giving, but they don't know how to effectively categorize giving, they can't properly do research required for this, and they're too embryonic to hire a single employee who is not also a Board Member, or too disorganized to even make use of the one guy they briefly did hire.

But they have time to remove Holden from the Board and then stick him back on it when the furore dies down, and time to jet off to sunny California to give talks to Google and get pledges.

Given the economy's woes, it seems to me that a) there are a lot fewer hip young hedge fund millionaires giving and b) that the opportunities to give here in the US will be pretty obvious, especially as donations from the middle-class dry up. Giving to a soup kitchen or a food bank may not be as sexy as providing Andean villagers with a llama with a women's literacy video strapped to its back, but the local food bank downtown where the growing need is, and nobody needs Holden and Elle or GiveWell to explain that.
posted by orthogonality at 9:17 AM on October 4, 2008 [11 favorites]

fucking awesome, ortho
posted by fourcheesemac at 9:37 AM on October 4, 2008

Thanks for the heads up on GiveWell jacalata and madam jujujive, I thought using the word "this" for a link was verboten. I did a lousy job on listing this. I never paid that much attention to the mechanics to the Charity Navigator beyond the CEO salaries. Someone with a half a million salary takes a lot of $20 contributions (even if they work 50 weeks a year, 40 hours a week with no perks, $20 buys only 6 minutes of their time).

With the Melissa thing, you can see who is local, that is if you're not the kind that drops a $20 in the jar for some kid who needs a kidney. One advantage of small towns, is that you usually know who is scamming.

Our hospital thrift store is run by old ladies who ebay, used to sell all the 501 jeans to Japan (before that fad passed), and have rummage sales at their kid's house in the neighboring town with all their free loot. They also were obsessed with things getting taken from the drop box. Just cause they curl their hair tight, doesn't mean they are kindly or clueless.
posted by Bitter soylent at 9:49 AM on October 4, 2008

I dunno, Bitter soylent. Gail J. McGovern, the CEO of the American Red Cross, has a salary of $565,000. Do you think this is inappropriate given the size and scope of the organization?
posted by ryanrs at 10:03 AM on October 4, 2008

ryanrs writes "Gail J. McGovern, the CEO of the American Red Cross, has a salary of $565,000. Do you think this is inappropriate given the size and scope of the organization?"

The President of the United States has a salary of $400,000.

A US Senator has a salary of $170,000.

So Gail's making more than three US senators, or just less than one senator and a president.
posted by orthogonality at 10:10 AM on October 4, 2008

I am the last one you should ask about salary. I want a maximum salary law as well as a minimum one. I doubt she is the only one that gets management pay and does all the work herself.
posted by Bitter soylent at 10:19 AM on October 4, 2008

McGovern's salary is unbelievably, ridiculously low compared to what she would earn at a for-profit corporation of similar size. Like top national politicians, she's clearly not in it for the salary.
posted by ryanrs at 10:29 AM on October 4, 2008

She probably gets all her blood free.
posted by Bitter soylent at 10:32 AM on October 4, 2008 [4 favorites]

This essay on CEO salaries written in 2003 is kind of dated, but he makes a lot of common sense. Just because CEO's make (not necessarily earn) a lot of money is not justification for the practice.
posted by Bitter soylent at 10:47 AM on October 4, 2008

Half a million a year, the figure you first offered, is ridiculously low compared to the $10 million average cited in that essay. The essay suggests 1 million would be quite reasonable.
posted by ryanrs at 10:56 AM on October 4, 2008

Take everything with a grain of salt. Lots of ratings systems are based on formulas. These formulas can inadvertently favor one type of non-profit over another based on the products/goods/services that they receive and how they are accounted for. They all provide a baseline for further conversation regarding organizational mission and how it ties back to the budget/fund raising. What you cannot see, in many cases, unless you really dig (get a hold of the last audit and current budget) is how dollars are put into buckets. How do segment administrative dollars that are used for fundraising? How well does an organization break out special events costs and thus true net revenue? The numbers can be buried pretty easily by organizations that want to bury them. Ultimately, non-profits are governed by the Attorney General of the state in which they are incorporated. Rare is the strenuous oversight. When Sarbanes-Oxley passed a few years ago, there was talk about how it applied to non-profits. As the law went into affect, the attorneys general realized that they had MORE than enough work looking after the for profit sector and have not pursued it with any vigor.

As for salaries of executives: This is a difficult call. The executives in non profits make significantly less than their for-profit peers. In some cases, the assets managed by the non-profit are enormous and the organizational structure requires management of the highest order. There is a case that can be made, in my opinion, that these salaries are well in line with what is acceptable. However, salaries should be reviewed against performance and kept in synchronized with all employees within the organization. Some organizations use a ratio that says that the execute may earn no more than 7 times the lowest paid person. There is logic to this, but again, I would take it with a grain of salt.

The litmus test for me is: is the organization accomplishing it's mission and being good stewards of their donations? Being a good steward means being able to explain to ANYBODY why executive compensation has been set where it is. That is transparency. It is also a key point of distinction between the non-profit world and the for-profit world. NPOs are obligated to explain and FP can say "we pay for the best leadership" (whatever that means) and roll out multi-million dollar contracts, deferred salaries, stock options, deferred stock options, blah, blah, blah.

I am hopping off my soapbox now. Thanks for posting this!
posted by zerobyproxy at 11:23 AM on October 4, 2008

Another way of looking at it: would you take a 95% pay cut just because your employer is a non-profit that helps people? I sure as hell wouldn't, but maybe I'm just an asshole.
posted by ryanrs at 11:50 AM on October 4, 2008 [1 favorite]

There is no reason for anyone to make anything even vaguely like a million dollars a year, and the society-level acceptance of such gross inequities is a good indicator of how we've become so fucked up.
posted by Pope Guilty at 12:56 PM on October 4, 2008

Pope Guilty writes "There is no reason for anyone to make anything even vaguely like a million dollars a year, and the society-level acceptance of such gross inequities is a good indicator of how we've become so fucked up."

I disagree. Jonas Salk should have made a million a year. Dean Kamen, for his medical inventions (not so much the Segway) should make a million a year. Bill Gates? Sure. The Google founders, sure. Warren Buffet, sure. Linus Torvald. Donald Knuth. Craig Venter. JK Rowling.

We should reward innovation and creativity and responsible, stable investment. What we shouldn't reward is scammers who don't create anything. Too many "charities" are solutions ("give me a half-million dollars a year and I'll find a problem to fix perpetuate") in search of a problem.

We need to see science and teaching and innovation rewarded, not glib hucksters who just move money around.
posted by orthogonality at 2:12 PM on October 4, 2008

Huh, this site showed me that there's a multimillion dollar local "charity" about 3 streets from me...which is all residential. Weird.

As to big charities skimming physical donations, I'm not terribly surprised. I recently donated an entire living rooms worth of furniture when the battered woman's shelter burned down. My stuff was only a couple of years old, but it was really too big for my house, and they needed big furniture. The director of the shelter is someone who has been at my house, so she knew what was coming. That afternoon, she called to tell me that what the drivers delivered was some horrid paisley thing they'd picked up somewhere, but that the entire set I'd sent (2 couches, 3 tables, 2 chairs, etc.) had "disappeared" off the truck.

It turns out the drivers had been doing that frequently. Taking new(ish) stuff, and reselling or keeping it. Last I heard they were being prosecuted for felony theft.
posted by dejah420 at 7:44 PM on October 5, 2008

Have the Randians come out to play or what? It's hard to say, because they seem to be avoiding some of the more obvious shibboleths.

Dude, is it not clear that people who steal from charitable donations are the worst kind of petty capitalist thieves and are much more indoctrinated in the culture of capitalism and consumerism than the culture of charity? Clearly there's a value difference between us. To specify: I don't believe that greed is an inevitable human condition. I believe it is socially constructed. But, anyways, please continue cherry picking reasons to diss charity.

Now, the argument that non-profits are pointless middlemen has some traction. But, here's the funny (as in, not really so funny) thing. It's the gosh darned capitalists who built this system in the first place. Where do you think non-profits get most of their funding? They trickle it down to make the plebs play a little nicer, or to improve PR, or because, hey, they're dead anyway and you can't take all the coke and whores with you. The ability for the hyper-rich to pick and choose charity is in line with the idea that the power they've been granted in the form of wealth does not match their merit or ability. Being really good at writing children's novels, or marketing software, or sitting on your ass until your parents die does not exactly translate to being really good at allocating resources to solve social problems. And it certainly doesn't translate into being good at running the world in any of the other myriad ways that the hyper-rich do, like, you know, financing presidential elections or writing law via lobbyists. The rich are good at staying rich. Which means, by definition, they're not good at creating just societies. Whoops!

So, the rich create foundations. And they tie huge 'ol strings around it and make the people literally beg to get a fraction of the profit back. A fair market system means that goods eventually fall to the true cost of production and opportunity cost, so the fact that some people are making absurd profits is a pretty good sign that the system is broken. That's another value difference here. I believe that the rich have leveraged their power to create self-sustaining systems. Absurd patent laws (Let's patent genes!), absurd copyright (70 years after death! Because dead people are the best innovators!), absurd financial systems ('eh, read a newspaper lately?), etc... A bull market is when the rich get richer and the poor get poorer. A recession is when the rich get richer and the poor get poorer. A depression is when the rich get richer and the poor are totally fucked.

But, oh noes! Teh creeping communism! Well, no. You can create just societies just fine with free market democracy, but the society has to have a culture of freedom and fairness to begin with. Cherry picking examples as signs that charity itself is the culprit contributes to the problem. Consumerism and the belief that every one can be hyper-rich because resources are infinite and you're just not trying hard enough and God doesn't love you (via Joel Osteen). Nope. Sorry. There's enough to go around if there weren't so many people creating unjust systems to propagate hoarding it. Non-profits are middlemen. They're in the middle of the raging river trying to divert things back a little bit to do a little good. Of course, the really good ones that actually try to change the system are going to be the first ones singled out to be cut off from the flow.

Well, I guess my point is that the whole shebang sucks. But people who pick on the lesser power tick me off. If the biggest bone you've got to pick is with charity, or with community organizers, or with those uppity minorities, then why don't you just make fun of the kids on the short bus while you're at it? They're certainly not going to be able to fight back either.
posted by Skwirl at 5:21 AM on October 6, 2008