On my desk today was a video of a (very respectable, “senior”) round table discussion at the National Press Club in Washington about Charity Fraud and Reform, posted on the online site of Contribute . At the same time, a reader of Aishahs latest blogpost on online fundraising platforms, pointed us to an article critical of GiveMeaning, a Canadian-based donation platform (Thanks, Tom Newman).
The charity reformers in the video are highly critical of excessive compensation of many top-end executives in the non-profit sector, some of which make 1 million US$ p.a. and more. They also point out that charities in the US are mainly accountable for very formal legal and financial aspects of their work, but not for the actual use of their money. One participant, Trent Stamp of Charity Navigator, highlights the fact that tax-deductable charity 501(c) status is handed out in the US like “candy to babies”, i.e. is far too easy to get. As an indication of their dubiousness a number of non-profits are operating in all US states, except the one they are residing in, thus evading official scrutiny.
Every start-up has to spent money to get going. Self-exploitation is fine for a start, but you need a sound business model taking over pretty soon in order to sustain your efforts. betterplace has opted for a model, whereby the operating costs as well as the transaction costs are covered by fees companies pay in order to be able to present their CSR engagement on betterplace. Until we are able to fully rely on those fees to cover our operating costs, we pay minimum wages to some team members (others work on a completely pro-bono basis) and are fortunate to have enlisted the financial backing of individual supporters, who believe in the idea of betterplace and are also actively engaged in its day to day operation.
We also believe that transparency is of utmost importance to create trust, the backbone of betterplace. Thus we fully disclose our business model and partnerships, 100% of donations are forwarded to the projects they are intended for. And we make sure to work as efficiently as possible. Here the internet helps us a lot: we rely on viral marketing, we cut communication and other operating costs.
With Trent Stamp of charity navigator I cherish the vision that open and transparent platforms such as betterplace will lead to a real basis of comparison between different charities and grassroots-initiatives and that the fraud, apparently as pervasive in the non-profit scene as in the corporate world, will be more visible to the individual donor, who will be able to make much more informed choices of how to make a difference. I am convinced that we are not part of the problem, but of the solution.