The Truth About the Shelter system
(image by Cory Clark)
WASHINGTON DC - November 15,2013 Most nonprofits advertise that 100 percent of your donations or something close to this go to their stated purpose, but if you believed this you'd have been wrong.
In fact you wouldn't be the only one suckered by the nonprofit industry, according to a report issued in 2009 by the Brigespan Group, a majority of nonprofits under report overhead costs on their tax forms as well as, fundraising material.
Their report found that more than a third of nonprofits reported having no fundraising costs at all while one in eight reported they had no management and general expenses, absurd claims for anyone who has ever worked in the nonprofit sector.
Everyone wants to believe that when they give to charity their hard earned money will be used wisely, but where are the desired effects of all this giving. Large Nonprofits are a often hundred million dollar a year businesses, while smaller nonprofits rake in millions still and yet few if any of these organizations have met their stated goals.
Where is all of the money going, are their methods ineffective or is it filling someone's pockets? Are their goals too lofty even for that kind of money? The sad answer to this, is that it is a three hundred billion dollar a year business and profits are good for those at the top and bad for those they are supposed to serve.
YWCA USA has ran a nearly 99 percent deficit for the past three years while its Executive Officers are among the top ten grossing Nonprofit Executives, with their CEO coming out at number 6 on the top ten list bringing home a 357,280 dollars a year base salary.
"Many of the charities with CEO's making more than 250 thousand a year use less than 60 percent on average of their revenue for their stated goals, this means that these organizations are using at least 40 percent of donations for administrative and fundraising costs which includes very lucrative salary packages for Executives," says the Charity Navigator website which analyses and rates the performance of nonprofits for donors.
"In 2010, InfoCision secured $5.3 million for the American Cancer Society, the largest health charity in the U.S. Yet according to the Society's government fillings, InfoCision kept 100 percent of the funds it raised, plus $113,006 in fees from the Society," said Robert I. Evans & Avrum D. Lapin (authors of 'Financial Decisions, Transparency, and Inappropriate Expenses: Lets Define Good & Proper Behavior').
According to the Bloomberg Report the American Cancer Society actively told InfoCision telemarketers to lie to potential donors, during the course of the companies contract with them.
"Staff members are having to do more with less and it is the beneficiaries who suffer," says the authors of the Brigespan Group report.
The greed and misrepresentation at the top is the first problem, the second is that they are as much a bureaucracy and a victim of the bureaucracy of the governments from which they are supposed to save us from.
"The point of having a private nonprofit system is that it is supposed to make getting otherwise overly complicated services easier for the people that need them or to be able to work outside the box to correct problems that Government bureaucracies can't handle," said Dani Finger, an artist and Social Justice activist in the Washington D.C. area.
However; the reality is that they are not performing this function, whether organizations claim to be looking for a cure for cancer, solving the issue of poverty or preventing youth violence there seems to be little if no headway being made and it seems that the bigger the charity the less headway is made.
"How can the nonprofit sector be the innovative machine that we need it to be when they are burdened by over regulation, there has to be a better solution to ensure they are spending the money we give them on what it's meant for," said T.C. Hall of Peace House.
In theory Government, nonprofit partnerships should be far more beneficial to the underprivileged communities they serve; however, it is this partnership and the restrictions imposed by Government agencies that often prevents nonprofits from being as innovative as they would otherwise be while still failing to prevent the misuses of public funds.
Normally nonprofits are paid through a line item reimbursement system based on a pre-approved budget which make them more accountable for how services are delivered than whether or not the desired effects are achieved.