From: jlove@ivrit.ra.itd.umich.edu (Jack Love)
Newsgroups: soc.culture.jewish
Subject: Re: Jewish Charities
Date: 30 Dec 1992 20:46:56 GMT
Organization: /usr/local/trn/lib/organization
NNTP-Posting-Host: ivrit.ra.itd.umich.edu

In article <9212301457.AA01607@cyclone.sbi.com> <gertler@cyclone.sbi.com (Don Gertler)> writes:
>I understand that a change in accounting procedures is in the offing,
>but current practice allows including many fund-raising activities
>under "education."  For instance, while UJA may claim a mere 15% in
>administrative costs, they may spend a fortune in mailings, fund-raising
>events and the like.  As long as they make the slightest mention in the
>mailings or during these events of what they claim to be doing with the
>money, the entire cost of the effort can be placed under education
>expenditures.  What other tricks are used I don't know.  
>This is clearly not restricted to Jewish charities.  I recall
>reading recently about some finagling among several organizations
>to "share" the paper benefits of certain donations.  This would
>artificially pump up gross receipts, thereby lowering percentage
>spent on administration.  (Of course, it would also lower the %-age
>"trickling down," but that doesn't show up per se.)

Unfortunately, I think it is very unlikely that such accounting
rules will really have the desired affect. The government seems
to be quite inept at formluating the rules. Instead, the rules
actually become the means by which some organizations can hide their
inefficiencies. As soon as it becomes part of a "program" to 
educate someone about something, suddenly every mailing is part
of that program. 

In the Jewish world, it is by no means only the government that
foists such ridiculous standards. In my 9 years of full time
work with a reputable Jewish charity, I would estimate that as
much as 15% of the money paid to me was for time I spent reconciling
the financial systems required by our three separate funding 
entities as well as the state and federal governments. Each Jewish
charity had its own means for divining whether their money was
being well-spent, and the result was an absurdly expensive 
financial reporting system. Thus each umbrella charity could 
claim that x% of the money they forwarded to us was going for
"program" while actually, we had to spend a significant portion
of it just to report back to them how we were spending it.

These days, I spend a lot of my time (on a volunteer basis) working
for charities that help the mentally ill. I have developed my own
standard for figuring out how much money is really going for the
purpose for which it is intended. Take the total amount of money
appropriated for the cause. Calculate the actual amount of money
spent on the cause. The resulting fraction is the true efficiency
of the program. In the mental illness biz in the State of Michigan,
I estimate that about 20% of the money appropriated actually 
reaches the mentally ill.  (By the way, I'd like to commend
the Alliance for the Mentally Ill as a worthwhile charity to
anyone still reading.)

As you can discern, there is actually a tension here that results
in more waste. On the one hand, charities are under great pressure
to prove that they get a large percentage of their money to the
causes they support. On the other hand, doing the record keeping
on this problem results in the need to hire administrators,
lawyers, lobbyists and what have you. Ultimately, some common
sense needs to prevail. Organizations like UJA which exist solely
to pass money through should be held to very tight standards--I 
believe that they should be responsible for transmitting 95% or
more of their funds. There should be a consolidation of layers--I'm
reluctant to give to charities which pass their funds on to other
umbrella organizations rather than directly to the agencies which
provide direct service. Finally, when it comes to the direct 
service agencies, we should be understanding that these 
percentages cease to make sense. If a homeless shelter has
to pay a director, the salary of that director should be regarded
as "program" expense, not an administrative expense. Either that,
or give up on the notion of a high percentage and accept that at 
the final level these distinctions just don't make sense. imho.
-- 
________________________________________
Jack F. Love	| 	Opinions expressed are mine alone.
		|	(Unless you happen to agree.)
Newsgroups: soc.culture.jewish