Newsweek on non-profit transparency

Newsweek lead columnist Jane Bryant Quinn's current column is preaching to this choir in general, though she's off base on some details. It's about the "budding transparency movement for public charities," and she correctly notes that the better non-profits seethe when they see less-worthy groups (let alone outright con artists) suckering well-meaning donors.

Quinn's overall point is that donors are being more and more empowered to seek out and compare real information about non-profits -- a fine thing for sure. (The true fact that as of yet the only information donors can use is about efficiency rather than effectiveness is not a reason for them to ignore it, rather it is a problem for the sector to solve.) Missing from her column is the reality that when charitable-minded folks choose not to do even minimal investigation about giving decisions, they are complicit in the inevitable bad results like 50% of their check going to a professional fundraiser rather than the cause. Hence I cringed recently upon learning that a relative blindly sends a check to every single group which sends him those pre-printed address labels -- generous in spirit but regrettable in practice. Much better for charitably-minded folks to think and act like consumers with their donation dollars.

Also, readers here know that my favorite current contributor to this sector's improvement is Charity Navigator, which I recently added to our family's list of annual donations. They unfortunately got a mild rebuke from Quinn for a really dumb reason. She thinks the fact that a GAO study claimed 64% of non-profits report zero fundraising expenses on their tax returns must mean those documents are unreliable sources of information, and since Charity Navigator collects its data from those forms she wrote that their rankings "could mislead."

Sigh. The vast majority of non-profits filing tax returns are small volunteer groups reporting zero staff or fundraising expenses for the simple reason that they have zero staff or fundraising expenses. (There are scores of all-volunteer local land trusts for every one Conservation Fund, and they all have to file a tax return if they have just $25,000 in revenues.) I guess Quinn imagined the GAO study to be claiming that two-thirds of staffed organizations reported no fundraising expenses; a shame that she couldn't have been bothered to place one phone call to the IRS or the GAO and ask one or two questions.

That laziness aside Quinn is on the mark overall, and tipped me off to a new site in the works which I think aims to be the home of Ebay-style consumer comment and reviews of non-profits. More on that after it launches.