So there I am at the box office of a local theater, buying a ticket for a movie.

“$10.75,” says the young lady on the other side of the glass.

I am still reeling in shock (When did movies get so expensive??), when she hits me again.

“Wanna give a dollar to children’s cancer?” she asks.

She gives me a look that just screams “Come on, Cheapo…it’s ONLY a buck.”

I look around.  The older woman behind me is eyeballing me suspiciously, as though she just KNOWS that I want to say no.  Behind the glass, the young woman chomps her gum impatiently, her finger poised over the touch screen on her register, awaiting my momentous decision.

What can I do?  I’m trapped.

“Yeah…sure,” I mumble.  “Why not?”

But Why not? is precisely the question…or maybe it should be Why?  Why give, even a dollar, to an appeal as nebulous as “children’s cancer”? Never mind that the young woman’s choice of wording made it sound as though I was donating to a disease, the point is I had no idea what, exactly, I was giving to….and neither do many of the rest of us.

In its June 13,2011 issue, Time Magazine reporter Bill Saporito had an article on so-called cancer charities. “It’s not that the National Breast Cancer Research Center is a scam,” Saporito wrote, but it “raised $12.7 million in 2009, spent 52% of it on fundraising [and] spent exactly $487,505, or about 4% of its income, on research.”  Saporito also mentioned the National Charity for Cancer Research.  That group took in $5.3 million in 2009, of which zero seems to have gone toward research.

What’s going on here?

Well, several things.

The first is that we are a giving nation.  Americans give more to charitable causes of all sorts (2 percent of our disposable personal income in 2010) than any other nation on Earth.  We give in times of national disaster (Katrina) and international disaster (Haiti and, most recently, Japan) alike.  We give to major familiar appeals –United Way, The Boy Scouts, the Red Cross) and to very often vague requests like “saving homeless puppies,” “feeding the hungry”, and “community youth programs.”

We give emotionally, as when a friend or neighbor asks us to donate to something for which they are collecting contributions.  “If my brother/mother/co-worker/friend is asking,” we subtly and unconsciously reason, “it must be for a good cause, right?”  We give based upon historical ties, as in “I was in the Girl Scouts as a kid; I am going to support the organization and the new generation today.”  We give, often, based upon personal experience with tragedy, as in “My father-in-law died from heart disease; I am going to support heart disease research.”

A celebrity-intoxicated culture, we give when a familiar Hollywood face is somehow attached to the appeal

We also give impulsively, as was capitalized upon by a startling fraud discovered in New York City two years ago.  Based upon the idea that people will give spare change and the loose dollar bill (or more) without asking too many questions, a scam called the United Homeless Organization sprouted more collection sites than mushrooms after a rain storm in the NYC area.  For several years these tables, with plastic water jugs atop filled with coins and bills, were a ubiquitous sight around the city, particularly places like the front of Grand Central and Penn Stations.  But then in 2009, Attorney General Andrew Cuomo filed a complaint charging that his office had determined the UHO wasn’t a charitable organization at all.  Rather, it was basically just a couple of people who rented out equipment and a brand identity to homeless people, and then made a tidy profit off of their panhandling.

Did anyone learn anything from that incident?

Not really, as the appeal at my local theater illustrated.

Curious about how successful that particular campaign actually is, I contacted the theater’s manager.  Not wanting this fellow to lose his job, I will keep the details sparse, but he essentially told me that about 25% of his customers give the dollar they are asked for.  Part of a chain, his theater was but one of a large number running this appeal.  I did the math.  We’re talking about thousands and thousands (…and thousands) of dollars here.  I learned that several major charities were the eventual recipients, and that the chain had been doing this –and giving to those same charities- for years.  It all seemed legitimate…once I had some names.

“Doesn’t anyone ask where the money is going?” I asked the theater manager.

“Hardly anyone,” he replied.

“Well, why not just say that it is for this foundation or that organization?” I asked.

“If you give them a name and they’ve never heard of it,” he told me,” fewer people give.  But if you give them a cause, like ‘cancer,’ they just give. It’s also faster; fewer questions to answer, which helps the line move along.”

The problem, of course, as Greg Simon, a board member and former head of FasterCures, a nonprofit focused on improving medical research, told Time’s Bill Saporito, is that “The general public is throwing its money away.  I shudder,” he said, “when I look at how many groups have ‘cancer research’ in their names,” and are capitalizing upon that implied connection to legitimacy.

But it does not end there.  In a quick survey of my general neighborhood (well…not so quick, actually…it took over two hours, as I scouted out several local stores and three local malls), I found one grocery and one drug chain that were running or have run appeals like that at the theater, and no fewer than seven stores with jars on the counter for contributions to causes ranging from homeless pets to the environment.  And from the evidence, people were giving.

Sadly, as the Time Magazine article noted, the cost of badly managed charities isn’t just wasted money. People are suffering and dying while these outfits mishandle funds that could go toward actually improving any number of situations.  As Ken Berger, the President and CEO of Charity Navigator, has pointed out, every dollar that goes to an ineffective “charity” is taking money away from those that are actually doing some good…and that is not even counting the money that winds up going to out-and-out frauds.

All this raises three questions:

1. Are institutions like foundations or government any better at separating the good from the bad when it comes to nonprofits, or are only individual donors being victimized?
2. Are current safeguards against fraud sufficient? Should the sector be doing more to police itself?
3. What can we do in the present circumstances to better ensure that charitable dollars actually go to not only legitimate charities, but those that are really contributing to solutions to the many problems we face?

 

We’ll begin addressing those questions in the next edition of this blog.

http://outcomestoolbox.com/archives/2011/the-giving-dilemma-part-1/

July 7, 2011