What’s The Percentage of Crap You Are Being Fed?
Do you ever ask Nike what they spend on advertising? What about Apple on how much they spend on research and development? Or Amazon on their website? The answer is no. Because who cares? They do what needs to be done to sell shoes, create great products and ehance the user experience online.
So why do we change our line of reasoning as it relates to charities? Charities charged with solving some of the world’s biggest issues like deadly diseases, poverty, education and climate change? Isn’t the future of our world more important than a cooler/ligher/faster/better/ “insert product here”? We would all answer yes, yet we all constrain, undermine and inhibit charities to address those issues by asking the stupid question, “How much of my donation will go to overhead?”
When I was the Director of Development for Spark Ventures, I jokingly told my CEO that if I was in a face-to-face visit with a donor and she or he asked me that question, I’d respond in three ways:
- Say, “wrong question. Next.”
- Ask, “why are you considering giving to us?” and if the answer is anything close to wanting to help further our mission I’d respond with, “and that’s what we want to do and will do with your money. Wherever and however it is needed.”
- Just leave the meeting because the donor is clearly in a place where they don’t REALLY want to help or trust us.
To keep my job and further the organization I always went for an even more toned down version of #2 but everything in me wanted to do one of the other two options because the belief that overhead ratios for charities should play a HUGE role in helping determine both the ouputs (impact/results/change) and inputs (funds/resources/time) of organizations is absolutely ludacrous and infuriating. It’s just crap, really.
And the worst part is, the question comes from the right motivation. Just the wrong phrasing. We as donors want to know that our money, our time, our voice and our energy are going to be used wisely. That is a good thing to want to ask and it should be asked. Asking in terms of overhead costs is simply the wrong way to go about it. We need to be asking “what kind of impact are you having?” or “how do I know you’ll use my money effecitvely?” or “tell me a story about how your charity has made a difference in the world?”
It’s not all on the donor either. When we ask charity leaders what their organizations’ “overhead” ratio is, it reflects a lack of understanding AND a lack of trust. The lack of understanding is primarily a donor issue that we need to play a role in helping educate them but it is a charity’s job to create, build and maintain quality relationships built on trust. How often do we report? What is in those reports? Is it even relevant? Do we engage donors in successes AND failures? Do we trust ourselves? Are we really producing value towards our mission and beneficiaries? These are all questions charities need to ask themselves and PROACTIVELY address with their donors, volunteers, supporters and advocates.
Until we can come to a place of similar understanding where we trust and empower charities to do what is necessary, by whatever means necessary, to make good on their mandate and charities are truthful, open and proactive in their communication back to their constiuents we will continue to fall short on our lofty goals. And that’s just crap, really.
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This blog was inspired by hearing Dan Pallotta speak at the AFP Toronto Congress event. He has been leading this charge to move away from overhead in our industry and provides a much more compelling, informed and inspiring case on his blog on the Harvard Business Review.
