Accountability

When confronted by nationwide headlines about some of charities’ worst practices, the overwhelming response of nonprofit leaders has been to bury their heads in the sand and try to pull the hole in after them. What these leaders fail to appreciate is that when the scandalous behavior of their colleagues is exposed, silence is neither golden nor in their own interest. Charities’ leaders need to stand up and speak for the common good even when that means denouncing some of their peers. Their own organizations’ interests and those of the public require it.

My nonprofit friends, it’s time we changed the conversation about “the overhead ratio”: the percentage of your organization’s expenses that go to administrative and fundraising costs. For too long, we’ve let a few bad apples confuse donors about what matters when judging a nonprofit. This confusion is actively harming the nonprofit community. Experts agree that many nonprofits should invest more in overhead, particularly administrative costs. You all know this as well as I do: You need to invest in your organization to be able to effectively serve your missions.

Most “evaluations” of charities’ work are done by the charities themselves and are a waste of time. Perhaps this is a surprising view for an advocate who thinks that charitable work should be based on evidence — but it’s true because charitable activity should be based on good, quality, robust evidence, which isn’t what many charities can reasonably be expected to produce.

As I look back over my years in politics and philanthropy, I consider there to be three cardinal rules of crisis management. Think of a crisis as a grease fire in a frying pan on your stove. Your objective is to cut off the oxygen that feeds the fire and put the fire out as soon as possible. Otherwise, your house might burn down. Here’s how leaders successfully put out crisis fires.

We've finally reached the deepest pit of Fundraising Hell. A place so vile, degraded, and horrific that all the levels above seem pleasant by comparison. These guys in Level 9 — they weren't about raising funds. They broke the very idea of fundraising. In fact, some of them were very good fundraisers. They didn't commit any of the sins of the higher levels. They knew exactly how to motivate donors to give. Except for the most important part of all: The money didn't do what they told donors it would do.

You thought Fundraising Hell couldn't get any worse after seeing what's happening to the Brand Cops? Think again. (Evil laughter.) It gets worse as we drop down a massive cliff to the level of the Fraudulent — fundraisers who lied to donors. These fundraisers were loose with the truth. They knew what kinds of stories moved donors to compassion, so they told those stories. Even when the stories weren't true.They fudged a statistic here, exaggerated a truth there. They failed to tell the truth.

Russ Reid CEO Tom Harrison, who will be presenting Operation Smile's case study session at Engage along with Operation Smile's Kyla Shawyer, has been a longtime member of the FundRaising Success Editorial Advisory Board, as well as a regular columnist for the magazine. Here is Tom's latest column from our January issue, "The Debate Over Fundraising Costs," where he explains how fundraisers must convey their practices clearly, authentically and honestly while emphasizing the impact over ratios and watchdog benchmarks.

And if a house be divided against itself, that house cannot stand — but can you think of a more divided sector than ours? Despite shining exceptions on the whole we’re divided internally, divided from our partners, divided from the public, and (unforgivably) divided from those we serve. One in six charities fear closure this year. This apocalyptic scenario should force us to question these divisions.

A friend recently commented that as a fundraiser, you are first and foremost selling integrity. If donors feel that you — or your organization — lack integrity, they will likely look elsewhere to donate.

This Editor's Note, "An Ounce of Prevention," from the October 2008 issue, talks about the importance of donor trust and how you should protect it at all costs. It's true that some things never change.