Save the Children (But Pay the Bills, Too)
The Wall Street Journal, 12/26/2006
With Donors Balking at Overhead, Charities Make the Case For Funding Administrative Costs By
Melissa Berman recently turned down $90 million. The president of Rockefeller Philanthropy Advisors, a nonprofit consulting firm, declined the chance to manage a potential client’s $90 million gift to support charities helping children in the developing world.
The reason: The donor specified that all of the money was to go toward the charities’ programs and “not a penny was to go to operating expenses,” such as accounting or other administrative functions, Ms. Berman says. “It was a very unrealistic demand.”
In recent years, many donors have been critical of charities that spend money on themselves, rather than on delivering services to needy beneficiaries. Many givers have chosen to support charities that spend only a tiny fraction of their budget on overhead expenses, such as staff pay and facilities, while others have imposed restrictions on how their gifts could be spent. Such selective giving has been made easier by a host of recent charity-watchdog Web sites that evaluate how leanly and efficiently charities operate.
But now, nonprofits are trying to convince donors that spending money on overhead isn’t such a bad thing.
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