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Although this particular case is egregious, I'd like to point out that donors should not be overly focused on a simplistic view of a charity's finances. A char

Although this particular case is egregious, I'd like to point out that donors should not be overly focused on a simplistic view of a charity's finances. A charity that only moves money around should of course be pretty efficient about it. But a charity that actually does things faces the same kinds of inefficiencies as any business. For instance, The Nature Conservancy is a charity I like (I'm not necessarily recommending them -- do your own research). About 2/3 of the raised funds go to their actual programs, and the rest is administrative and fundraising. However, they are one of the few large environmental charities that actually does stuff to help the environment, and attracts the expertise to do it well. The rest are lobbyists and money-shufflers, which I have little patience for when it comes to charities. In other words, I'm much more tolerant of inefficiency when actually doing something. I think anyone who actually does things would agree that it's not always efficient when observed from afar. But in reality it's much more efficient to go straight to the people who can do stuff than what other charities do: buy time with Congress, hoping that they will pass laws that will either (a) move some money around in such a way that someone (perhaps someone without much expertise) will do something; or (b) force someone to stop doing something, hoping that they won't find a much worse thing to do instead.

derefr 7y ago
You would think that the "total efficiency rating" of a charity wouldn't measure just the internal overhead of the company you're giving the money to, but rather how much useful work comes out the other end once the job of actually helping someone has been subcontracted out N times. In such a view, a money-shuffler is clearly less efficient, because in the end they have to give the money to someone else, so they can only add overhead on top of whatever efficiency that someone-else already has.
- jeffdavis 7y ago
  What is the "total efficiency" of a charity that mainly does lobbying and awareness, and no actual work ever happens?
zrm 7y ago
Charities also have an ugly trade off when it comes to fundraising. You can often raise $2 by spending $1 on fundraising at the cost of lower efficiency -- you're spending half the money you raise on fundraising. But which gets more money to do the work, to raise $2 at 50% efficiency or to raise $0 at 100% efficiency?

derefr 7y ago

You would think that the "total efficiency rating" of a charity wouldn't measure just the internal overhead of the company you're giving the money to, but rather how much useful work comes out the other end once the job of actually helping someone has been subcontracted out N times. In such a view, a money-shuffler is clearly less efficient, because in the end they have to give the money to someone else, so they can only add overhead on top of whatever efficiency that someone-else already has.

jeffdavis 7y ago
What is the "total efficiency" of a charity that mainly does lobbying and awareness, and no actual work ever happens?

zrm 7y ago

Charities also have an ugly trade off when it comes to fundraising. You can often raise $2 by spending $1 on fundraising at the cost of lower efficiency -- you're spending half the money you raise on fundraising. But which gets more money to do the work, to raise $2 at 50% efficiency or to raise $0 at 100% efficiency?