But it is a mistake. Most benefactors, if truth be told, would probably agree that organizations with no administrative costs are unlikely to be very effective. Tussling over program priorities is an expected part of negotiations over gifts, grants, and contracts. Yet such simplistic ratios can come from suspect sources of data-and may not even be comparable from one organization to the next because of differences in accounting practices. Compilers of official statistics, therefore, need to be more cautious about the way the results of their work may be feeding unreasonable expectations about the rewards of altruism.
Foundations exercise their clout in even more dangerous ways.
They impose complicated administrative requirements designed to limit non-program costs and to ease identification of excess spending. Some foundations, astonishingly, declare in advance that they simply do not support administrative costs of any sort. That attitude, as well as some donors' fixation with cost ratios, pushes to one side the role of the creators and managers of the charities that deliver public benefits. Charities themselves can sometimes play into this process. Endowed organizations, for example, often reassure donors of small amounts that their gift can be devoted entirely to the cause they name because all operating expenses have been paid by generous donors to the endowment.