“Non Government” Organisations

It (re)started in December last year, when The Age, probably a bit light on for comment-bait that would pass for serious news, decided to dust off that hardy perennial, Non-Government Organisation (NGO) budgets.

Under the title “Charities’ fund-raising costs swallow millions in donations”, and a dual byline (which always implies ‘investigation’, doesn’t it?) The Age dutifully trawled through pages and pages of publicly available information to uncover the secret that money was wasted and charities were…not transparent?

Naturally that received its fair share of the kind of clicks and outrage that advertisers love, so it was followed up two days later with “Many charities still banking on a lack of transparency”. The latter of the two opened on this pearler: “The best way to make a charity nervous at Christmas is to ask questions about its financial performance, including executive pay.”

Importantly, the ‘revelations’ by The Age were based on donations, not government grants, which are subject to their own public scrutiny and accountability.

This led to a great deal of discussion around social media about the various failures of nonprofits to appropriately spend money on ‘frontline activities’ or some other euphemism for core activities. Suddenly the discussion shifted to what should or shouldn’t be an appropriate level of overheads as a percentage of total donations, across the breadth of an astonishingly diverse industry.

Then, of course, was the opening gambit of Asher Wolf’s (otherwise excellent) piece asking readers to write a letter to Scott Morrison asking for better treatment of asylum seekers. It began thusly: “This year my family has decided to avoid the usual online petitions and donations of gold coins that disappear into the purses of NGOs,” before relying almost exclusively on the research conducted and information uncovered by…NGOs such as Amnesty International and the Asylum Seeker Resource Centre.

Herein lies the problem with attacks on nonprofits such as The Age’s. They may begin as an earnest investigation into the operations of philanthropic groups, but they inevitably unearth half-buried antagonisms towards nonprofit groups that exist for myriad reasons.

At its heart, the efforts to paint NGOs as lazy, ineffective, profligate, and opaque stems from a mindset that treats them more like government agencies than private organisations. Just because charities and nonprofits lack owners doesn’t make them owned by all Australians, yet there seems to be an expectation of similar levels of accountability to the public.

Here’s the rub; if you’re unhappy with how much an organisation spends on administration, communications, outreach and fundraising, don’t donate to them. Much as if you were disappointed with the manufacturing practices of a clothing company you would avoid their product, you have the right to withhold donations to certain charities.

When you give money to a charity, what you are in essence doing is either buy good feelings for yourself, or outsourcing philanthropic acts you would like to perform, but acknowledge that others have better skills, scale and resources with which to do it. Both are perfectly excellent reasons to donate. And if a charity does not meet your personal standards (and transparency may indeed be one of those standards) then go elsewhere.

There are never articles in major papers about how much Coke or BHP spend on administration. It is an assumption universally made that those companies will do their best to keep those costs as low as feasibly possible while still delivering their core product.

Funnily enough, the same applies with charities. They would, no doubt, be itching to spend more on delivering the services they exist to provide. Indeed, many probably spend TOO much on these acts, neglecting their staff, or perhaps efforts to expand which could ultimately help more people. Indeed, many NGOs actually have constitutionally capped administration costs (it clearly varies depending on the size and available economies of scale, but it’s often significantly less than many for-profits).

As to the question of executive salary, the inbuilt assumption in the opening sentence of The Age’s piece is that paying executives well is an implicit betrayal of the cause the charities exist to support. Heaven forbid those groups try to attract experienced executives with the requisite expertise to properly run an efficient (low cost!) organisation. No, that would be wasteful.

The assumption that charities are somehow wasteful is by and large a furphy. Like any company, charities are constantly looking to do their jobs better. But perhaps cutting spending on fundraising would lead to a proportionally greater drop in donations and revenue. Perhaps cutting administration costs would lead to loss of efficiency across the organisation (for instance in the form of repeated IT failures). Every nonprofit is different, operates in a different environment and does its best to deliver on its promise.

Beyond that point, unless you are a donor, IT DOES NOT MATTER. You have the right to donate, or to not donate. You have the right to take your money to the charity that best reflects your personal combination of cause, transparency and effectiveness, or to not give them a cent.

But to act as though charities have some level of responsibility to use private money in some way that meets notional ideas of ‘appropriate’ spending is laughable. Next time you want to have a whinge about how poorly the money given to charities is spent, sit down, have a Bex and dwell on what the ‘N’ and the ‘G’ in ‘NGO’ stand for.

Disclaimer: Ed Butler sucks at the teat (the inefficient, overflowing teat) of a mid-sized NGO

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