Thinking Out Loud

July 12, 2015

The Charity Fundraising Paradox

dollar signAmid last week’s news, you may have missed a small tempest that was created when it was revealed that former U.S. President George W. Bush received a $100,000 fee for speaking at a fundraising gala for the Veteran’s Administration. The charity also paid $20,000 for a private jet to fly him to the event. Interviewed on ABC News, one veteran was particular upset that Bush had sent many soldiers into war, and was now reaping a personal profit from speaking at the charity which assists the wounded assimilate back into society.

The New York Daily News noted this as well:

Former Marine Eddie Wright, who served on the charity’s board and lost both hands in a 2004 rocket attack in Iraq, told ABC he didn’t think it was right for Bush to have been paid to raise money for vets through the group, which provides adapted homes to service members who became disabled in combat.

“You sent me to war,” Wright said of Bush, according to ABC.

“I was doing what you told me to do, gladly for you and our country and I have no regrets. But it’s kind of a slap in the face.”

While you might wish to join the ranks of the outraged, it’s worth noting that this particular gala event tends to raise at least one or two million dollars annually. It’s chairman is quoted at Huffington Post as saying,

“The event raised unprecedented funds that are putting our nation’s heroes into specially adapted homes throughout the United States. His presence was appreciated by the veterans and supporters of the organization.”

And therein lies the crux of the problem. In charity, as everywhere else, you have to spend money to make money. Recently here, we wrote about a situation that came to light in the Family Christian Stores hearings, that the bookstore was paid up to $185 for each fresh child sponsor the bookstore chain signed up. At that time we wrote,

Let’s do some math here.  The sponsor is paying World Vision $35 per month per child. That means that for the first 5.28 months, the organization has yet to break even. It’s really into the 6th month that the sponsor’s donation is free and clear, but of course there are also overhead costs in that $35 that we don’t know. 

In charity parlance, this type of thing is known as “development costs.” There are organizations that carry out this function in different ways; one of the most common is having someone on staff available to older donors for things like “estate planning” or “writing a will.” Years ago, I knew one large church that had a staff member for this purpose, though the modern megachurch tends to attract younger adherents, many of whom haven’t totally embraced the possibility they might someday die.

World Vision in particular is known for having a very high percentage of its operational costs committed to fundraising. For charities like them, the George W. Bush story is a no-brainer: You bring in whatever political figure, actor, singer, author, or sports hero that will attract the right crowd. You do it at whatever cost.

 

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