Ship of Fools: "The way we think about charity is dead wrong"

Thread: "The way we think about charity is dead wrong" Board: Oblivion / Ship of Fools.

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Posted by Eutychus (# 3081) on :

In this TED talk, social entrepreneur Dan Pallotta blames the Puritans for impoverishing charities by separating giving from capitalism to assuage their guilt at making money, argues the case for relatively large amounts of donations going on "overhead" (including, for instance, non-direct aid such as long-term research, and fundraising), and seeks to put nonprofit organisations on the same footing as companies (enabling them, for instance, to attract better talent by paying top executives more, and get risk capital).

I find it hard to counter his economic arguments (a large, well-organised fundraiser may be more efficient in terms of donations brought in than a local bake sale, thus increasing the total size of the pie available to fund the cause), but I'm disquieted by his apparent assmuption that giving money is an appropriate and acceptable substitute for doing the charitable work oneself and that bigger is necessarily better.

Is the way we think about charity dead wrong?

Posted by Jay-Emm (# 11411) on :

There are two differences between the charity and a company that make me uneasy about some of the argument.

1) The goal of a company is to make money. If they can get away with doing less for more good on them (ish)

2) We give to a company because we know they have what they need. We give to a charity because they don't.

This gives some odd incentives. I'm sure at one point most of the paid people have thought 'wouldn't it be awful if we solved X'. Just by the nature of the thing (I know in similar cases, similar thoughts cross my head).
And if the business thing gets increased then onm the balance sheet the actual charity stuff (including research) is an expense without real benefit.

Posted by Nicodemia (# 4756) on :

Well, there are charities and charities, and then there is charity.

I give to a medical charity working on the front line because (a) the work they do is vital (read ebola) and (b) I can't go out to wherever because I don't have appropriate qualifications and I'm far too old!

Ssome small, local charities, which make a real difference locally, are entirely run by volunteers, and in no way could be called a business. there are probably hundreds of those.

Then there is charity, which we are all called upon to practice, as Christians, defined, I think by "love your neighbour as yourself". that doesn't necessarily involve money, though it may do, but almost certainly involves action and a "Christian charity" frame of mind.

Posted by Boogie (# 13538) on :

Doing the charity work ourselves often does us as much good as the recipients.

My friend works on a soup run for the homeless, she clearly loves the work. It gives her purpose and a reason to get up in the morning.

I do puppy raising for Guide Dogs. I love the work - which is not easy at times! It's also wonderful to meet the people who benefit and gain their independence from owning guide dogs. Some of their stories are truly heart breaking/warming. Last week I met a 19 year old student who had been a prisoner in her student flat every weekend Friday to Tuesday and can now get out and about whenever she wants.

But giving money matters too imo, especially for charities where specialist skills are needed. It's very important to do your research and be sure the money gets where it's supposed to.

I don't give any money to Church [Hot and Hormonal]

as they tend to spend it on evangelism, which I think is a waste of time and money. But I do give a lot of my income to a variety of charities.

(I [Hot and Hormonal]

becaue I feel rather guilty about giving nothing but time to Church - maybe I shouldn't feel that way, but I do)

Posted by Raptor Eye (# 16649) on :

When I give to a charity, I want the money to be spent on the cause. Our office held weekly raffles raising money to 'buy a brick' for a young people's hospice, over a few years. We were shocked when we read that the hospice would not be built, as the money had all been given as salary to a fundraiser who never raised enough to build it!

Yes, some administrative costs are inevitable, but these should be kept to a minimum. I hate the idea of running a charity like a business, as the accumulation of money is likely to become the main aim. I don't give to charities who have used their donations to put adverts on the TV, or to send me pens and bookmarks.

Posted by Boogie (# 13538) on :

quote:
Originally posted by Nicodemia:

Then there is charity, which we are all called upon to practice, as Christians, defined, I think by "love your neighbour as yourself". that doesn't necessarily involve money, though it may do, but almost certainly involves action and a "Christian charity" frame of mind.

This use for the word 'Charity' is little used these days. But I would translate it as 'kindness'. If kindness is our motivation then we are half way there imo (The second half involves a mixture of wisdom, energy and common sense!)

Posted by Curiosity killed ... (# 11770) on :

The "faith, hope and charity" quotation from 1 Corinthians 13:13 is usually translated "faith, hope and love" nowadays.

Posted by Nicodemia (# 4756) on :

I know! I was being clever and linking it with 'charities' (sigh)! But an awful lot of people know the quotation as 'Faith, hope and charity'. The AV refuses to die!

Posted by Eutychus (# 3081) on :

FWIW, I thought it was a good insight. Indeed, it was part of my thinking in the OP that our own expression of charity cannot be replaced by our giving money. I like to think I do a lot of the former, but I do none of the latter.

Posted by Dave W. (# 8765) on :

quote:
Originally posted by Eutychus:
I'm disquieted by his apparent assmuption that giving money is an appropriate and acceptable substitute for doing the charitable work oneself and that bigger is necessarily better.

I hope that there's room for monetary donations - otherwise groups like MSF would be screwed.

Posted by Eutychus (# 3081) on :

Of course there is always room for a purely financial donation, especially given the technical nature of the kind of help delivered by MSF.

But I still have a sense of unease about making the leap from that to seeing charity operations purely in financial and economic terms, which is the feeling I got from this video.

Posted by Sioni Sais (# 5713) on :

quote:
Originally posted by Nicodemia:
I know! I was being clever and linking it with 'charities' (sigh)! But an awful lot of people know the quotation as 'Faith, hope and charity'. The AV refuses to die!

One who cannot resist putting his 2d in writes:

A fine example of how limited is the English language. The 'love' here is from caritas, the specifically caring form of love.

Posted by leo (# 1458) on :

I question the whole notion of charity - is is plastering over cracks when, instead, we need to get to the root causes of those cracks - that requires political action.

Posted by Boogie (# 13538) on :

quote:
Originally posted by leo:
I question the whole notion of charity - is is plastering over cracks when, instead, we need to get to the root causes of those cracks - that requires political action.

I would hate the charity I work for to be in the hands of politicians!

Posted by Baptist Trainfan (# 15128) on :

quote:
Originally posted by leo:
I question the whole notion of charity - is is plastering over cracks when, instead, we need to get to the root causes of those cracks - that requires political action.

Yes ... but some people need help now and can't wait years for the political process to kick in. It's both/and, not either/or.

Posted by Sioni Sais (# 5713) on :

quote:
Originally posted by leo:
I question the whole notion of charity - is is plastering over cracks when, instead, we need to get to the root causes of those cracks - that requires political action.

There's nothing to prevent charities campaigning for political change. It's one of their purposes.

Posted by Dave W. (# 8765) on :

quote:
Originally posted by Eutychus:
Of course there is always room for a purely financial donation, especially given the technical nature of the kind of help delivered by MSF.

But I still have a sense of unease about making the leap from that to seeing charity operations purely in financial and economic terms, which is the feeling I got from this video.

I got the feeling from this:

quote:
... our own expression of charity cannot be replaced by our giving money. I like to think I do a lot of the former, but I do none of the latter.

that you considered financial donations to be much inferior in some way (quite apart from your reservations about the specific opinions in the video.)

Would you elaborate? I'd be interested to hear reasons for drawing distinctions between the two forms of charity. I imagine they'd have to do with some notion of the different effects on (and perhaps meanings for) the recipients, givers, and society in general.

Posted by Eutychus (# 3081) on :

quote:
Originally posted by Dave W.:
that you considered financial donations to be much inferior in some way (...)

Would you elaborate? I'd be interested to hear reasons for drawing distinctions between the two forms of charity. I imagine they'd have to do with some notion of the different effects on (and perhaps meanings for) the recipients, givers, and society in general.

There's a personal aspect to this for me.

After previously having given massively and sacrificially for several years, I tend not to give financially because of past trauma within and at the hands of nonprofit organisations. Simply put, I feel sufficiently ripped off by mission organisations for it to dampen my financial generosity considerably. But that's just me. These days, I rationalise my miserliness in this respect by looking at all the pro bono hours I put into chaplaincy (for instance) and the resulting loss of earnings.

Less personally, as I said while I think the video presents economically compelling arguments, I think the economic components of large nonprofit organisations are poorly understood and they demotivate me. (For instance, I hear a good way to get rich in Africa with the onset of any humanitarian disaster is to get one's hands on a 4x4 and rent it out to aid agencies. This kind of thing makes my head hurt).

All that said, I am under no illusions that within the direct charity work I do, there is a huge amount of secondary benefit for me which I wouldn't get by simply writing a cheque, which I suppose kind of offsets any virtue there might be in doing it.

I find non-guilt-induced giving and stewardship a real headache.

[ 07. December 2014, 16:44: Message edited by: Eutychus ]

Posted by Dave W. (# 8765) on :

I sympathize with your concerns about large non-profits. I've recently been trying to decide whether to continue to give to the American Red Cross; they've come in for some pretty harsh criticism lately.

When you say direct charity gives you a "secondary benefit" that offsets virtue, what did you have in mind? And in what ways does giving induce guilt?

Posted by Eutychus (# 3081) on :

quote:
Originally posted by Dave W.:
When you say direct charity gives you a "secondary benefit" that offsets virtue, what did you have in mind?

Simply put, as Boogie has related upthread, you feel good about doing good.

There's nothing wrong with that, but one needs to be clear-headed about it. Anyone who thinks that prison chaplaincy is going to be a life fraught with sacrifice, danger, frustration, and emotional exhaustion and nothing good - or more importantly, depicts it as such - is not lucid about their real motivations which are at best mixed in that it's also tremendously fulfilling.

quote:
And in what ways does giving induce guilt?

It's not so much giving that induces guilt as the methods used to induce giving!

[ETA it was a discussion on the Red Cross elsewhere that led me to the above video]

[ 07. December 2014, 18:58: Message edited by: Eutychus ]

Posted by Enoch (# 14322) on :

It may be a cultural thing, but having watched the TED talk, and I can't think of many things I've disagreed so completely with. It seems to me that underneath his slick arguments, what he's advocating is that secular charities should model themselves on the worst tele-evangelists.

IMHO, what he's saying is so fundamentally wrong headed and spirited, that I'm not sure I could properly be friends with someone who thinks he is right.

If I discovered a charity I supported was upping the proportion of its donations that it spent on overheads, and big salaries for its key managers, I'd stop giving to it. It's turning a charity into something like a privately run hospital or old peoples' home. There are plenty of those, and and I don't believe any of them manages to get any proper balance between their profit and the care they are supposed to provide.

His understanding of Puritanism is also tosh.

Posted by no prophet's flag is set so... (# 15560) on :

quote:
Originally posted by Sioni Sais:

quote:
Originally posted by leo:
I question the whole notion of charity - is is plastering over cracks when, instead, we need to get to the root causes of those cracks - that requires political action.
There's nothing to prevent charities campaigning for political change. It's one of their purposes.

There is in Canada. And it is severe. It's been in the news on and off. Even if a charity sticks to the recent Conservative government rule of no more than 10% spending on political advocacy, they expose themselves to the Canada Revenue Agency's (the gov't tax authority) attention which can and does use their very onerous audits to instil fear of being auditted and thus prevent charities from saying or doing anything political whatsoever.

They are currently focussed on charities saying anything negative about tar sand oil and related pipelines. The transparent purpose of this is of course is to control information and public opinion, which is also why they completely gagged scientists doing any work for the gov't from ever talking to the media. Corporations on the other hand hire lobbyists and deduct the costs from their already low taxable income.

[ 07. December 2014, 20:27: Message edited by: no prophet's flag is set so... ]

Posted by Canucklehead (# 1595) on :

Speaking for myself, I would prefer not to see any of the charities I'm involved with get too wrapped up in political campaigning. If I want to affect political change then I would rather do it through other channels, but if I'm supporting a relief agency then I want to see my contributions going toward the relief they provide, not towards political campaigning.

As for the topic of the OP, I'm not enamoured with the idea of charitable organizations being run like for-profit companies. Although I think I can see the validity of the argument being made, I don't think it's been thought all the way through.

Posted by Horseman Bree (# 5290) on :

In relation to NP's post re the present Canadian gov't, I note that the present incumbent and many of his close circle are members of the kind of church that says that the poor choose to be that way, so there is no obligation to help them.

What little positive action previous governments have taken may be discussed in the light of the fact that the last six PMs were RC, while Pearson was brought up UCC and Diefenbaker was a Baptist who had lived in Depression-era Saskatchewan, as did Tommy Douglas.

Either we are far enough away from the Depression and wars that we have forgotten what we have learned, or the American-influenced churches have been successful at imposing a GOP-style mindset on the present gang.

Or both.

Posted by Jonah the Whale (# 1244) on :

I feel pretty half-and-half about the thrust of the TED talk. I recognise that any organisation has overheads, and these include publicity and salaries. Occasionally charities ask if you want to earmark to a particular cause, or just to general funds. We always give to general funds on the basis that most people want to see their money going directly to the cause, and we can understand that there is more to aid or charity organisations than simply whats at the other end.

On the other hand the idea that someone can make a lot of money out of other people's generosity feels a bit yucky. I feel a bit ambiguous about all this.

Im am a member of an organisation which claims that 100% of the funds raised goes to the intended recipient. This is almost true. There are some bank charges, but all the board members are rich enough to be unpaid for the time they put in, and it is reltively small-scale - 100,000 Euro p.a. roughly.

I tend not to give to medical charities because I believe this is, or should be, a concern of the government. Also I hate being guilt-tripped into buying in to the latest big thing in charity. Or the thing that everybody is supposed to give to (like poppy appeal).

Posted by Byron (# 15532) on :

Instinctively, I'm disgusted by charity execs pulling six-figure salaries, but as a pragmatist, I can stomach it if, and only if, the returns justify the outlay, and the extra money is spent wisely.

Posted by Dave W. (# 8765) on :

I've now watched the video and read up a bit on Dan Pallotta and his now-defunct company, Pallotta TeamWorks.

I think there's a reasonable argument to be made that it's possible to focus too hard on low overhead ratios; as he notes, flyers in laundromats are low overhead advertising, but also not particularly effective.

At the same time there's something a bit irritating about hearing a guy go on and on about how "we" have to change "our" views on charitable giving to be more profit-oriented, when his for-profit company went down in flames after key clients pulled their business. He sees this evidence of other people's failure to see the objective superiority of his new paradigm, but it could also be seen as just another case of an entrepreneurial hopeful failing to understand the values and satisfy the desires of his customers. He can bitch and moan about how those values and desires should be different, but I suspect all the TED talks in the world aren't going to make a difference.

Posted by Soror Magna (# 9881) on :

quote:
Originally posted by Canucklehead:
Speaking for myself, I would prefer not to see any of the charities I'm involved with get too wrapped up in political campaigning. If I want to affect political change then I would rather do it through other channels, but if I'm supporting a relief agency then I want to see my contributions going toward the relief they provide, not towards political campaigning. ...

That's a common point of view which puts those charities in the position of always treating symptoms but never the cause; or picking up the pieces, rather than keeping things from getting broken in the first place. So money gets poured into whatever, but nothing ever changes. Eventually, there's donor fatigue and accusations that those charities don't really want to solve the problem, because they're more interested in sustaining themselves indefinitely.

Posted by Sioni Sais (# 5713) on :

quote:
Originally posted by Canucklehead:
Speaking for myself, I would prefer not to see any of the charities I'm involved with get too wrapped up in political campaigning. If I want to affect political change then I would rather do it through other channels, but if I'm supporting a relief agency then I want to see my contributions going toward the relief they provide, not towards political campaigning.

Some charities relieve suffering directly, eg by flying medical staff into war zones or getting food supplies into places where the infrastructure has failed, while others are openly campaigning organisations. So long as charities stay within the terms of their letters of association (or whatever they are called), as do limited companies, I don't see why they should be constrained.

quote:

As for the topic of the OP, I'm not enamoured with the idea of charitable organizations being run like for-profit companies. Although I think I can see the validity of the argument being made, I don't think it's been thought all the way through.

If a charity can become more effective and more efficient as a consequence of being run in that way I don't see a problem. I'm sure it helps some charity's more than others but it's a matter for the charity's trustees, as in so many areas.

Posted by Soror Magna (# 9881) on :

quote:
Originally posted by Byron:
Instinctively, I'm disgusted by charity execs pulling six-figure salaries, but as a pragmatist, I can stomach it if, and only if, the returns justify the outlay, and the extra money is spent wisely.

We're told that executives in the private sector are worth those six and seven and eight figure salaries (plus expenses, bonuses, stock options, etc.) because that's what it takes to get the best people. Should charities hire crappy people because they're cheaper? Or are talented people expected to work for less because it's a good cause? What does that say about how we value the work they do?

Posted by Pomona (# 17175) on :

Boogie - totally get the reluctance to give to church when you're uncomfortable with evangelism, but unless your church is in a modern building they're most likely spending most of the money on upkeep of the building. Heating and lighting traditional church buildings is incredibly expensive - personally I give to church to help support that, having been in churches whose heating has failed. It's not fun!

Posted by Byron (# 15532) on :

quote:
Originally posted by Soror Magna:
We're told that executives in the private sector are worth those six and seven and eight figure salaries (plus expenses, bonuses, stock options, etc.) because that's what it takes to get the best people. Should charities hire crappy people because they're cheaper? Or are talented people expected to work for less because it's a good cause? What does that say about how we value the work they do?

Ideally, hell yeah they should work for less, it's a charity, not a business. Folk volunteer their time and effort by the thousands, it's not asking a lot for an exec to take home a modest salary.

Realistically, many execs don't think like that and never will, high salaries may be justified if they're as good as they claim, and get results. Better a charity has $10,000,000 and shells out a million of that on salaries than it has $1,000,000 earned by righteous execs.

What's intolerable is crappy execs still pulling in the big bucks. High salaries must be tied to high expectations.

Posted by RuthW (# 13) on :

Execs at artsy non-profits get six-figure salaries for the same reason - their expertise is valued. It's only the folks working at charities serving the poor who are supposed to be satisfied with mediocre pay.

Posted by Byron (# 15532) on :

A major part of the problem is the mindset that equates salary and worth. It's not even simple greed: folk really believe their measure is represented by how much they pull in each month.

So long as it continues (and it ain't going anywhere soon), scrutinizing performance and demanding a lot for the cash seems the best compromise.

Posted by RuthW (# 13) on :

quote:
Originally posted by Byron:
Ideally, hell yeah they should work for less, it's a charity, not a business. Folk volunteer their time and effort by the thousands, it's not asking a lot for an exec to take home a modest salary.

It is in fact a lot to ask. Volunteers aren't depending on that work for their livelihoods; employees are. How much money you make deeply affects just about every aspect of someone's life.

Posted by Byron (# 15532) on :

Sure, but we're talking six-figure exec pay, not subsistence wages. [Big Grin]

If someone wants to rake in the green, fine, go into business and knock yourself out. If they go into charity, it's not too much to ask that they be motivated by a vocation to do good, not to do good at six figures.

Posted by Lamb Chopped (# 5528) on :

I've heard the "we need a high salary to get the best execs" argument many times, and I can't help wondering whether anybody, seriously, is that good. Profit or nonprofit. I really don't think so.

Posted by mousethief (# 953) on :

quote:
Originally posted by Horseman Bree:
In relation to NP's post re the present Canadian gov't, I note that the present incumbent and many of his close circle are members of the kind of church that says that the poor choose to be that way, so there is no obligation to help them.

This is significant. The message that the religious right has been doling out since at least 1980 in this country, at least, is that the poor should be taken care of by private charity rather than by the government. They have now changed their rhetoric to say that the poor shouldn't be taken care of at all because they deserve whatever they get.

Next logical step would to call for rounding up the poor and putting them into labor camps. I'm just cynical enough to believe them capable of calling for this.

Posted by Sioni Sais (# 5713) on :

quote:
Originally posted by mousethief:

quote:
Originally posted by Horseman Bree:
In relation to NP's post re the present Canadian gov't, I note that the present incumbent and many of his close circle are members of the kind of church that says that the poor choose to be that way, so there is no obligation to help them.
This is significant. The message that the religious right has been doling out since at least 1980 in this country, at least, is that the poor should be taken care of by private charity rather than by the government. They have now changed their rhetoric to say that the poor shouldn't be taken care of at all because they deserve whatever they get.

Next logical step would to call for rounding up the poor and putting them into labor camps. I'm just cynical enough to believe them capable of calling for this.

Maybe my irony detectors are misfiring but I am sure industrialisation did just that two hundred years ago.

Posted by mousethief (# 953) on :

quote:
Originally posted by Sioni Sais:

quote:
Next logical step would to call for rounding up the poor and putting them into labor camps. I'm just cynical enough to believe them capable of calling for this.
Maybe my irony detectors are misfiring but I am sure industrialisation did just that two hundred years ago.

Then it failed because there are millions of poor people not in camps at this very moment.

Posted by Dave W. (# 8765) on :

quote:
Originally posted by Byron:
Sure, but we're talking six-figure exec pay, not subsistence wages.

If someone wants to rake in the green, fine, go into business and knock yourself out. If they go into charity, it's not too much to ask that they be motivated by a vocation to do good, not to do good at six figures.

But why should we ask this of them? They can't just want to do good, they have to take oath of - well, not poverty, but of never making more than, say, an associate professor of accounting? Just how little should they be allowed to earn? And should everyone working for a charity get paid less than they could get elsewhere?

Posted by M. (# 3291) on :

One small charity that I support covers its overheads by means of supporters subscribing as members. Anything I give on top of that goes completely to the charitable purpose. That means I know exactly how much of what I give goes to overheads.

It is a small charity and I don't know if the approach would scale, but it's an approach I like.

M.

Posted by Jay-Emm (# 11411) on :

quote:
Originally posted by Soror Magna:
We're told that executives in the private sector are worth those six and seven and eight figure salaries (plus expenses, bonuses, stock options, etc.) because that's what it takes to get the best people. Should charities hire crappy people because they're cheaper? Or are talented people expected to work for less because it's a good cause? What does that say about how we value the work they do?

That's part of the ugliness.
It's ugly enough when Mr Corp 'deserves' his pay rise for his skill at keeping everyone elses wages low (or otherwise expecting his workers to bail him out). But you can vaguely argue that the workers could move or the business should fail if he misjudges it,

But when it's the government, public-good sector and charities. It's not just taking advantage of apathy and misplaced loyalty. It's exploitation of other peoples commitment and basically using the target of the operation as a hostage.

Or in other words making Talented people work for less is what their asking of all their staff (and very slightly less of everyone else).

[ 08. December 2014, 07:16: Message edited by: Jay-Emm ]

Posted by Boogie (# 13538) on :

quote:
Originally posted by Lamb Chopped:
I've heard the "we need a high salary to get the best execs" argument many times, and I can't help wondering whether anybody, seriously, is that good. Profit or nonprofit. I really don't think so.

I couldn't agree more. They don't get the 'best' they get the greediest - the banking crisis proved that.

Let them be 'head hunted' I say - there are queues and queues of people just as good right behind them.

Blaming the poor for being poor is pervasive through all society imo. It's very, very hard to get out of poverty - and it's not about lack of ability or motivation - it's about lack of cash!

This article puts it well.

Posted by Dafyd (# 5549) on :

quote:
Originally posted by Soror Magna:
We're told that executives in the private sector are worth those six and seven and eight figure salaries (plus expenses, bonuses, stock options, etc.) because that's what it takes to get the best people.

That's what we're told by the executives. If they're worth that much money they must be right.

Posted by leo (# 1458) on :

quote:
Originally posted by Boogie:

quote:
Originally posted by leo:
I question the whole notion of charity - is is plastering over cracks when, instead, we need to get to the root causes of those cracks - that requires political action.
I would hate the charity I work for to be in the hands of politicians!

Don't equate 'political action' with politicians'.

Posted by no prophet's flag is set so... (# 15560) on :

The corporate model is trying to take over everything isn't it? I get really cranky with the phrase "giving back to the community". Which generally applies to rich people who've come to ponder their own mortality (during their midlife crisis) after exploiting the community as much they possibly could. And they don't really give anything that costs them. They get their name on the donor plaque wall and eat their $500 a plate banquet meal while listening to other temporarily thoughtful giver-backers talk about their thoughtfulness.

I personally support MSF (Médecins Sans Frontières, Doctors Without Borders) with money both through my companies and personally. With my time, the therapy dog program in the province, for which I'm a certified assessor of candidate therapy teams (handler + dog).

Posted by cliffdweller (# 13338) on :

Because importing those corporate models of leadership into church leadership the last few decades has worked out so well, right? (shudder)

Posted by Makepiece (# 10454) on :

The flaw in this argument, IMO, is that a culture that encourages people to pursue wealth as a driving goal for their lives is not generally a culture that encourages people to give to others as a central goal of their lives. Obviously, there are some famous, wealthy philanthropists, but on the whole people in western societies consume gross amounts and only give marginal amounts to charity. Of contrast is the widow who gave 'all that she had'. What is it that produces true altruism?

Posted by Byron (# 15532) on :

quote:
Originally posted by Dave W.:
But why should we ask this of them? They can't just want to do good, they have to take oath of - well, not poverty, but of never making more than, say, an associate professor of accounting? Just how little should they be allowed to earn? And should everyone working for a charity get paid less than they could get elsewhere?

Every red cent a charity exec pockets is taken from the charity's goal. It doesn't even stop at six-figure salaries: most hospitals are non-profit, yet members of the board can rake in million dollar salaries while patients are beggared and bankrupted by medical bills.

Do I think charities are a vocation? Yes. Do I think a vocation's compatible with driving around in a new Lexus? Sure, if it's not at the cost of the folk you're supposed to be helping. Am I pragmatic enough to accept the world doesn't work that way? Sure, but doesn't mean I have to like it, or stop trying to nudge it a bit in the right direction.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Byron:
Every red cent a charity exec pockets is taken from the charity's goal.

I think we had the same discussion about church employees recently, and to my mind, the workman is still worthy of his hire.

If the charity requires high-six-figures execs to manage its operations, it should hire them. It should, however, ensure that such an exec is actually necessary. If you are a charity and you find yourself spending a significant portion of your income on management staff, you're probably doing it wrong.

Posted by Byron (# 15532) on :

quote:
Originally posted by Leorning Cniht:
[...] If the charity requires high-six-figures execs to manage its operations, it should hire them. It should, however, ensure that such an exec is actually necessary. [...]

World of yes.

A good way to do this would be to raise the exec's salary directly. If they're really that good, they ought to be able to persuade the charity's supporters to bankroll them, and explain directly why they deserve the $250,000 or whatever it is they think they're worth.

That campaign I'd like to see! [Devil]

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Byron:

quote:
Originally posted by Leorning Cniht:
[...] If the charity requires high-six-figures execs to manage its operations, it should hire them. It should, however, ensure that such an exec is actually necessary. [...]
World of yes.

A good way to do this would be to raise the exec's salary directly. If they're really that good, they ought to be able to persuade the charity's supporters to bankroll them, and explain directly why they deserve the $250,000 or whatever it is they think they're worth.

That campaign I'd like to see!

I wish we were only talking about $250,000.
[Disappointed]

Posted by RuthW (# 13) on :

quote:
Originally posted by Byron:
Sure, but we're talking six-figure exec pay, not subsistence wages.

Where the hell do you live?

If you want to buy a two-bedroom condo in my barely middle-class neighborhood, you need to make over $100,000. Not a house, mind you -- just a condo. Surely an organization's executive should be able to afford to buy a home, raise children, and save for retirement. Maybe even the other program staff and the support staff should be paid enough to do the same things. Just maybe these people need to make enough money so they don't end up in line for the same charities you think they should serve solely for the wish to do good. [Roll Eyes]

Posted by Beeswax Altar (# 11644) on :

quote:
Originally posted by cliffdweller:
Because importing those corporate models of leadership into church leadership the last few decades has worked out so well, right? (shudder)

Posted by Byron (# 15532) on :

quote:
Originally posted by RuthW:

quote:
Originally posted by Byron:
Sure, but we're talking six-figure exec pay, not subsistence wages.
Where the hell do you live?

If you want to buy a two-bedroom condo in my barely middle-class neighborhood, you need to make over $100,000. Not a house, mind you -- just a condo. Surely an organization's executive should be able to afford to buy a home, raise children, and save for retirement. Maybe even the other program staff and the support staff should be paid enough to do the same things. Just maybe these people need to make enough money so they don't end up in line for the same charities you think they should serve solely for the wish to do good.

I'm not talking a bare hundred: we're in the era of the million dollar nonprofit CEO.

Average haul for a CEO of a large nonprofit? A cool $429,512. That's more than the president gets; near double what a Supreme Court justice pulls in.

Them's big bucks by any measure. If the execs' skills are truly worth it, it may be justified, but where should it stop? Any upper limit?

Posted by Dave W. (# 8765) on :

quote:
Originally posted by Byron:

quote:
Originally posted by Dave W.:
But why should we ask this of them? They can't just want to do good, they have to take oath of - well, not poverty, but of never making more than, say, an associate professor of accounting? Just how little should they be allowed to earn? And should everyone working for a charity get paid less than they could get elsewhere?
Every red cent a charity exec pockets is taken from the charity's goal. It doesn't even stop at six-figure salaries: most hospitals are non-profit, yet members of the board can rake in million dollar salaries while patients are beggared and bankrupted by medical bills.

Do I think charities are a vocation? Yes. Do I think a vocation's compatible with driving around in a new Lexus? Sure, if it's not at the cost of the folk you're supposed to be helping. Am I pragmatic enough to accept the world doesn't work that way? Sure, but doesn't mean I have to like it, or stop trying to nudge it a bit in the right direction.

Now that you've answered the questions you've asked yourself, would you care to take a stab at the questions I asked you?

How little should they be allowed to earn? And should everyone working for a charity get paid less than they could get elsewhere?

For my part - after some reflection, I think the overhead ratio maybe isn't such a bad metric after all. Running a large organization can be a difficult job and I wouldn't necessarily begrudge the executives their pay - but contra Dan Pallotta, it seems to me that operating on a large scale means they should be able to achieve lower overhead ratios.

Posted by Byron (# 15532) on :

Dave W., I didn't give an exact amount 'cause it'd be arbitrary, and with inflation, soon meaningless.

As a baseline, a charity exec ought to earn a reasonable wage to give a comfortable standard of living, reasonable depending on all the circumstances, including property where they live, school costs, etc. If they're truly gifted, and bring millions into the organization, a higher wage may be justified.

That's what it comes down to for me: are they worth every penny they get paid, or could the money be better spent elsewhere to further the charity's goals?

Posted by RuthW (# 13) on :

quote:
Originally posted by Byron:
I'm not talking a bare hundred: we're in the era of the million dollar nonprofit CEO.

Average haul for a CEO of a large nonprofit? A cool $429,512. That's more than the president gets; near double what a Supreme Court justice pulls in.

Sure, that's the average for a large non-profit. Most non-profits are small. From your link:

quote:
In a Charity Navigator study, only six out of the 3,786 nonprofits studied paid their highest executives more than $1 million and 65 received between $500,000 and $1 million.

The average compensation for the CEO of a non-profit, according to Charity Navigator, is $150,000. But they don't look at charities with revenues of less than $1,000,000, so they're leaving out a lot of small charities.

Posted by Dafyd (# 5549) on :

quote:
Originally posted by Byron:
As a baseline, a charity exec ought to earn a reasonable wage to give a comfortable standard of living, reasonable depending on all the circumstances, including property where they live, school costs, etc.

Are executives the only charity employees who ought to earn enough for a reasonable living?

Posted by Dave W. (# 8765) on :

quote:
Originally posted by Byron:
Dave W., I didn't give an exact amount 'cause it'd be arbitrary, and with inflation, soon meaningless.

What, between the time you write it and the time I read it, inflation will render it meaningless? Holy Weimar Republic, Batman - I better get my wheelbarrow! (Also - your admission of arbitrariness over pay contrasts oddly with your certainty about what kind of cars they should be driving.)

quote:
As a baseline, a charity exec ought to earn a reasonable wage to give a comfortable standard of living, reasonable depending on all the circumstances, including property where they live, school costs, etc.

If "comfortable" is what the executives are allowed, what about all the other employees - would "barely adequate" do? Do they also take proportionally less than what they could make elsewhere? (Remember - every red cent that goes in their pockets is donation money that isn't going to the homeless!)

quote:
If they're truly gifted, and bring millions into the organization, a higher wage may be justified.
That's what it comes down to for me: are they worth every penny they get paid, or could the money be better spent elsewhere to further the charity's goals?

That sounds reasonable - but I imagine the charity's board probably already thought of that. It's not clear to me what additional information a $25 donor can muster to improve on their decision (aside from things like lengthy condemnatory articles by ProPublica, I suppose.)

Posted by Lucia (# 15201) on :

I think one of the difficulties with this discussion is that it covers a huge variety of different types of organisation, both in size and the way they organise their operations.

Mr Lucia and I work with a small development association in North Africa. It is a non-profit organisation and the majority of staff come from a variety countries and are not paid by the organisation but raise funds for their own support in their country of origin to enable them to work here. (I can assure you that this is not a route to getting rich...).

But our constant headache is getting donors to recognise the need for funding for the overhead costs of the organisation. To run projects effectively we have regional offices around the country and our staff need transport to get to projects. Most of our vehicles are old and needing constant maintenance but there is huge reluctance from donors for money to go towards these kinds of costs. They want all their money to go directly to help people in the projects. But actually organisations do need some infrastructure in place to be able to run effectively but it's not very glamorous or exciting to give to that. You have to have the imagination to see the links in the chain to see what you are enabling to happen by supporting the organisation's structure and administration. Certainly there is a place for making sure that this is not being wasteful, but our experience is that the problem for small organisations is in the opposite direction. Everyone wants their money to go to the frontline.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Dave W.:
Now that you've answered the questions you've asked yourself, would you care to take a stab at the questions I asked you?

How little should they be allowed to earn? And should everyone working for a charity get paid less than they could get elsewhere?

For my part - after some reflection, I think the overhead ratio maybe isn't such a bad metric after all. Running a large organization can be a difficult job and I wouldn't necessarily begrudge the executives their pay - but contra Dan Pallotta, it seems to me that operating on a large scale means they should be able to achieve lower overhead ratios.

Yes.

The unspoken problem inherent in this discussion is that it's predicated on a faulty assumption-- that the corporate model of obscenely overpaid CEO's exploiting massively underpaid workers is a good one and that it yields good results. I gotta give those CEO's one thing: they sure know how to market themselves, because this lie seems so prevalent that they can even now spin it out in other fields-- the church, NGO's, etc. The whole premise of the article just assumes that truth w/o really examining if it is so. But the reality is, the financial crash not too long ago demonstrated that is just a load of BS. It's not working in the financial sector, it's not working anywhere in the business world. So there's simply no reason to assume it would work with NGOs.

I have no problem with the notion that people working for non-profits ought to make a reasonable wage, and that the people with the most responsibility/specialized skills or training should be paid proportionally more than those with less. What I don't buy is the notion that this metric should be something like 20x or more the bottom tier workers. Not because NGOs are somehow different than corporations-- but because it's not working well for anyone but the CEOs in the corporate sector.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by RuthW:

quote:
Originally posted by Byron:
I'm not talking a bare hundred: we're in the era of the million dollar nonprofit CEO.

Average haul for a CEO of a large nonprofit? A cool $429,512. That's more than the president gets; near double what a Supreme Court justice pulls in.
Sure, that's the average for a large non-profit. Most non-profits are small.

Meaning then that there are some non-profits that are paying far, far more than $429K. Which, as has been noted above-- goes to the point first of all that a non-profit can be run well on far by CEOs making far less than $429K, and the notion that the question of the OP is a good one. There are great NGO's run prudently that use their resources well-- and NGOs that are not. It's important for donors to know the difference.

fyi: Most of the non-profit CEOs making the million dollar salaries are in the medical field, btw. Time did an exhaustive analysis of medical costs in the US-- very instructive for a lot of reasons, but a side note was the info. that the highest paid person in almost every city in America (with a few exceptions in the financial centers) was the CEO of the local non-profit hospital. And that "non-profit" hospitals are really not "charities" in the way most of us think of them. That the big fund-raiser galas with pictures of adorable sick children are all just a PR campaign-- because the big money isn't coming from those fund-raisers, it's coming from exactly the same place as any other cold-hearted corporate enterprise-- jacked up bills. The whole "non-profit" scheme is a clever legal fiction that helps with some tax issues but more importantly gives the public a nice, warm feeling towards an enterprise that is bleeding poor and middle-class Americans dry when they are at their most vulnerable. Bottom line: when it comes to charitable giving in the medical field-- look closely.

[ 09. December 2014, 13:46: Message edited by: cliffdweller ]

Posted by Raptor Eye (# 16649) on :

I can see the difficulty with that Lucia, but the reason for donation is the cause. The overheads need to be included in the cost of provision, so that it is acceptable to say that it costs eg £30 to feed a family, when in fact the food they have been given cost only £10 and the rest was overheads of one kind or another.

However, to throw my two penneth into the comments of other posts above, it is not acceptable imv for anyone who works for a charity to be paid excessively, nor underpaid if that means that they don't have the basics to live on. Unless the heart and soul is in the provision of the cause, I don't think that they should work for the company, however good their cv looks.

cross-posted with cliffdweller

[ 09. December 2014, 13:49: Message edited by: Raptor Eye ]

Posted by Byron (# 15532) on :

cliffdweller knocks it out the park! This corporate greed under the guise of charity is exactly what I'm talking about. Funds raised with cute kids used to line the pockets of the bossmen. Such behavior would shame a railroad baron.

I know, RuthW, that there are many fine nonprofits. Your post just illustrates that it doesn't have to be how cliffdweller describes. I'm not sure, Dave W., why you disagree that every red cent raised to help X cause should, if at all possible, go towards its intended goal (if you do). How about my suggestion that wages be raised separately and openly?

Dafyd, you make my point for me. Of course all employees should make a decent wage. In an organization with finite resources, that means the execs should be willing to tighten their belts a little. If they don't, the folk who pay can be the very people they're supposed to help, like the families ruined by "nonprofit" hospitals robbing their patients blind and operating like a cartel.

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by Byron:
How about my suggestion that wages be raised separately and openly?

I think Lucia points out the problem with this. Everyone wants to give money to help the starving kiddies. Nobody wants to pay for logistics management, and even fewer people want to donate their hard-earned cash to pay the auditors.

Posted by Byron (# 15532) on :

quote:
Originally posted by Leorning Cniht:

quote:
Originally posted by Byron:
How about my suggestion that wages be raised separately and openly?
I think Lucia points out the problem with this. Everyone wants to give money to help the starving kiddies. Nobody wants to pay for logistics management, and even fewer people want to donate their hard-earned cash to pay the auditors.

Obviously, so in effect, in too many cases, money's being raised on false pretenses?

As my link noted, some states have suggested a salary cap for nonprofit execs. Instead, how about a rule that money raised for X purpose must be spent directly on that purpose, and money raised for wages and overheads be done so honestly?

If these six/seven figure salaries are justified, surely they can be sold to folk who donate? If they can't be sold, doesn't that indicate a serious issue with justification?

Posted by Gwai (# 11076) on :

Or perhaps rather it suggests that people who donate have no idea what it does not cost to fund charity. Some people think all overhead is horrible and don't want to fund anyone's salaries even though they want their brilliant cause to be supported by salaried people. (And yes the opposite happens too.) Until people all become wise charities will have to find ways to cover costs. And for myself, if there is a charity that reads with children, I think it completely fair if a (proportional) piece of each donation goes to say pay gas to take the books and readers to the children. And if Jane and Joe Schmo gives to the charity but haven't realized it will need to deal with transportation costs, that doesn't make the charity mendacious if it spends a bit of their donation on such costs.

Posted by itsarumdo (# 18174) on :

quote:
Originally posted by cliffdweller:

quote:
Originally posted by RuthW:

quote:
Originally posted by Byron:
I'm not talking a bare hundred: we're in the era of the million dollar nonprofit CEO.

Average haul for a CEO of a large nonprofit? A cool $429,512. That's more than the president gets; near double what a Supreme Court justice pulls in.
Sure, that's the average for a large non-profit. Most non-profits are small.
Meaning then that there are some non-profits that are paying far, far more than $429K. Which, as has been noted above-- goes to the point first of all that a non-profit can be run well on far by CEOs making far less than $429K, and the notion that the question of the OP is a good one. There are great NGO's run prudently that use their resources well-- and NGOs that are not. It's important for donors to know the difference.

fyi: Most of the non-profit CEOs making the million dollar salaries are in the medical field, btw. Time did an exhaustive analysis of medical costs in the US-- very instructive for a lot of reasons, but a side note was the info. that the highest paid person in almost every city in America (with a few exceptions in the financial centers) was the CEO of the local non-profit hospital. And that "non-profit" hospitals are really not "charities" in the way most of us think of them. That the big fund-raiser galas with pictures of adorable sick children are all just a PR campaign-- because the big money isn't coming from those fund-raisers, it's coming from exactly the same place as any other cold-hearted corporate enterprise-- jacked up bills. The whole "non-profit" scheme is a clever legal fiction that helps with some tax issues but more importantly gives the public a nice, warm feeling towards an enterprise that is bleeding poor and middle-class Americans dry when they are at their most vulnerable. Bottom line: when it comes to charitable giving in the medical field-- look closely.

Yes - well I stopped giving to medical charities when I realised a fair proportion of them essentially operate as PR fronts and lobby organisations for big pharma companies. And since there are so many other things that need some kind of help, I'm not up for wading through the labarynthine information with a sufficiently sharp toothpick to identify the few independents.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Gwai:
Or perhaps rather it suggests that people who donate have no idea what it does not cost to fund charity. Some people think all overhead is horrible and don't want to fund anyone's salaries even though they want their brilliant cause to be supported by salaried people. (And yes the opposite happens too.) Until people all become wise charities will have to find ways to cover costs. And for myself, if there is a charity that reads with children, I think it completely fair if a (proportional) piece of each donation goes to say pay gas to take the books and readers to the children. And if Jane and Joe Schmo gives to the charity but haven't realized it will need to deal with transportation costs, that doesn't make the charity mendacious if it spends a bit of their donation on such costs.

Yes, I agree. It's even appropriate to pay for some staff members to put together the schedule so you don't have 5 volunteers show up the day of a teacher inservice, or handle donations properly so that you get your tax write off. It's even appropriate to pay someone to do some nice flyers and letters to raise funds.

And yes, people don't give to those sorts of indirect expenses, even though they are as essential to the ministry of the organization as the more direct things (e.g. books). So I'm fine with a "cut" going to administration and/or fund-raising. I'm fine with good people making a good wage. I simply expect that efforts be taken to keep administrative and fund-raising costs down, and that there be transparent record-keeping so any donor can see where their money is going.

There are a LOT of charities where this is the case-- lots of good, worthwhile NGOs that are doing great work on a shoestring. But sadly there are others (again, most notably but not restricted to, medical charities) where this is very much NOT the case. So I too am selective in where I give.

Posted by Dave W. (# 8765) on :

quote:
Originally posted by Byron:
I'm not sure, Dave W., why you disagree that every red cent raised to help X cause should, if at all possible, go towards its intended goal (if you do).

Because saying that money spent on payroll isn't going towards the intended goal doesn't make any sense to me, and I think it's unreasonable to insist that people who work for charities be paid poorly.

quote:
How about my suggestion that wages be raised separately and openly?

I think publishing pay rates, at least by general categories, might make sense for large charities. But trying to raise money for pay separately seems bizarre, largely for the reasons Gwai brought up. There's no reason to expect that the preferences of random donors are likely to lead to sensible budget allocations.

Posted by M. (# 3291) on :

That's why I like the model I mentioned upthread: that you join the charity as a member - the membership fee covers overheads and donations on top go straight and entirely to the charitable cause.

As I also posted, this is a small charity and I don't know if it would scale up.

M.

Posted by Martin60 (# 368) on :

Charity begins at home.

Posted by Mudfrog (# 8116) on :

quote:
Originally posted by leo:
I question the whole notion of charity - is is plastering over cracks when, instead, we need to get to the root causes of those cracks - that requires political action.

Yes, instead of giving someone food from a foodbank because they've been sanctioned, fight against the sanction and get the bloke his money!

Why should charities do the government's work for it?

Posted by Mudfrog (# 8116) on :

quote:
Originally posted by Martin60:
Charity begins at home.

I hope that in using this phrase you mean that learning to be charitable starts with one's upbringing, and not that we should only be concerned to look after our own people.

Posted by Martin60 (# 368) on :

My home is in a street across from a church. I had to turn "Eugene" away once this morning, but I've invited him back for lunch.

Posted by Sioni Sais (# 5713) on :

quote:
Originally posted by Mudfrog:

quote:
Originally posted by leo:
I question the whole notion of charity - is is plastering over cracks when, instead, we need to get to the root causes of those cracks - that requires political action.
Yes, instead of giving someone food from a foodbank because they've been sanctioned, fight against the sanction and get the bloke his money!

Why should charities do the government's work for it?

For much the same reason that the government tops up wages, with benefits such as Family & Children's Tax Credits. If employers paid a decent wage, these and other benefits would be unnecessary, just as much of the work done by charities in the UK would be.

The root cause is however that employers and governments are too mean and short-sighted to ensure a decent wage gets paid.

Posted by Martin60 (# 368) on :

That's what we vote for Johnny.

'Eugene' came back and we had soup and toast (don't want to build more learned helplessness) and I challenged his suicidal ideation with a crash course in postmodernism. I'm learning, at 60, cuh. Fuh.

I insist that his f...... miserable life is his helpless story and that stories can be edited. It won't change a thing and it might change everything. He won't read, ramble, climb mountains, rebuild motorbikes. But I live in hope.

I told him he was 'that twat up there' Jesus, in disguise. I think he liked that.

I told him that he's always welcome but that I will always challenge him.

As that's what God wants me to do. While he's saving up paracetamol and aspirin for Easter. I implied I'd call the cops and have him sectioned if he didn't play nicely.

Which means he hasn't thought of hanging himself for Xmas. Which is what real men do ... and no I WON'T joke about that with him. He's so bloody innocent at 54 I can't see he's discovered porn even. Lived with his mother you see.

That's my charity for the day.

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