CBC Investigates Nonprofit Spending on Private Fundraisers
Written by: Sumac Research
Date: September, 2010
Have you
ever heard this saying: “There are lies, damned lies and statistics”?
That was Mark Twain. It came to mind after reading an article published
by the CBC, called “Charities Paid $762M to Private Fundraisers.”[1] The
article reported on an investigation conducted by CBC into “your charity
dollars,” particularly the amount of money that goes to private
fundraisers.
While the CBC certainly didn’t
lie in the article, they did manage to paint a very grim picture of the
entire nonprofit sector in Canada using a few shocking examples of
overspending.
The article starts out with a
broad statement about all charities in Canada: “Canadian
registered charities paid $762 million to third-party fundraisers
between 2004 and 2008,”[1] but then focuses entirely on a few who spent
ridiculous amounts of money on external fundraisers, leaving practically
nothing for their causes.
The article states that CBC “found examples in nearly every province in which local, provincial and national charities for years spent upward of 70 or 80 per cent of their revenues to pay the companies that organized their fundraising drives.”[1] Here are the three examples they give:
-
The Alzheimer Society of Saskatchewan, which paid $96,849 for a campaign that raised just $95,812.
-
The Children’s Leukemia Research Association Canada, which raised $4.2 million over the last four years, but paid $3.2 million of that to its external fundraiser.
-
Nova Scotia Crime Stoppers, which raised $2.8 million between 2003 and 2009 — of which $2.2 million, or 79 per cent, went to pay its fundraiser.
What the CBC
fails to make clear in the article, however, is the small percentage of
charities that these examples represent. If you look closely at the
statistics and do a quick calculation, you realize that the CBC is not
talking about the majority of charities in Canada. They are not even
talking about 10% of charities. What they are actually talking about is
a miniscule 0.2% of charities.[2] So, the story is actually a good one –
that 99.8% of charities spend responsibly and do a lot of good with that
money. But the article is
very misleading. Because of the way the facts are presented, the message
that we take away is a bad one.
Also misleading is the
comparison between what charities spent on private fundraisers and what
they earned, as pointed out by the AFP:
The
article compares what charities spent in four years ($762M) with
what they earned in just one year ($8.2B).[3] At first
glance, those numbers are shocking, but if we get the comparison right,
what we are actually looking at is $762 million used to raise something
more like $32.8 billion, which is not at all shocking. It’s just the
cost of raising money.
Unsurprisingly, the
CBC investigation and article has fuelled a lot of debate and backlash.
The article itself has to date received
869 comments. Soon after publication, the
Association of Fundraising Professionals released an
official response to the CBC, and both
the
Canadian Red Cross and
Crime Stoppers
have replied defending their spending.
It’s
unfortunate, but articles like this have given donors a bad taste in
their mouths and they are going to become more inquisitive about how
funds are used. It is your job now to separate yourself from these bad
examples that make it into the media. Be prepared. Be transparent. Show
donors exactly where funds are going.
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complete, integrated software solution for nonprofits that is easy to
use, has incredible functionality and costs a fraction of what other
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published by Sumac Research, visit: Sumac.com
Notes
[1] CBC
News. Charities Paid $762M to Private Fundraisers. September 22, 2010.
Available here:
http://www.cbc.ca/canada/story/2010/09/21/con-charities-fundraisers.html
[2]
According to the articles itself, only 214 of the 85,000 registered
charities listed on the CRA’s website used external fundraisers and paid
more than 50 per cent of what they earned to them (that’s 0.2%). CBC
News. Charities Paid $762M to Private Fundraisers. September 22, 2010.
Available here:
http://www.cbc.ca/canada/story/2010/09/21/con-charities-fundraisers.html
[3] AFP Talking Points addressing the CBC article. Available here:
http://www.afpnet.org/Audiences/PublicPolicyIssueDetail.cfm?ItemNumber=4606