How to deal with uninformed nonprofit-watchdogs around the holidays

Around this time of the year, we nonprofits work to bring in year-end donations, incurring paper cuts and envelope-tongues in the process (seriously, the glue stick is your friend). Around this time also is when people start pushing “guides” about which nonprofits to give to, warning of shady nonprofits that spend too much on “overhead” and leave nothing for the people they are supposed to be serving.

Here’s an example of that. It comes back again and again year after year like some sort of aggressive toenail fungus, despite being debunked by fact-checking website snopes.com. WTF. It’s exhausting dealing with so much recurring ignorance. As if our work isn’t hard enough already, with many of us having involuntary eye twitches due to cashflow issues. So, let’s come up with a better strategy to handle this yearly irritation so we can focus on what matters: Writing hundreds of personal notes on our printed year-end letters and praying we don't misspell donors' names.

• “Overhead is bad. Hiss! Down with overhead!” Counterargument: “Overhead is necessary in order for us to be able to serve people. It includes things like rent, utilities, insurance, marketing and communications, fundraising, office supplies, HR, technology, etc. You can’t serve people if you don’t have strong infrastructure and systems in place. And some of this stuff is not optional! As in, it's legally required, like insurance, bookkeeping and accounting, etc. Some stuff is not legally required but we still need to do them: program evaluation and grant reporting, etc. Many donors want to know where their donations are going to. Well guess what, having someone figure that out, is overhead. Many donors want regular communications through newsletters, stories about how their money is making a difference. Guess what? Having someone manage the website, write the newsletters, etc., that’s overhead!”
• “OK, I understand that some of that is needed. But shouldn’t it be kept as low as possible?” Counterargument: “Trust me, most nonprofits are trying to keep it low. To the point that some of us have terrible pay and benefits and are sitting on crappy chairs we got donated that may have possums living in them. But think about your favorite restaurants. Do you care how much they spend on electricity or rent? You only care about the food, atmosphere, price, and whether they treat their employees well, right? Do you decide which restaurants to eat at based on how low their 'overhead' is? Same goes for nonprofits. Focus on the quality of their programs, and the value they add to the community. The more you focus on overhead, the more you force them to waste their time trying to reduce costs to dangerous levels instead of developing strong programs. And since there's not a standard definition of what constitutes 'overhead,' some nonprofits are just able to lower their 'overhead' ratio using expense allocation tricks.”
• “Nonprofit EDs/CEOs shouldn’t be paid well.” Counterargument: “Nationally, the average pay for an ED/CEO is $64,000. So trust me, not many of us are sitting at mahogany desks inlaid with Swarovski crystals and polished with foie gras. Nonprofit work is as complex as for-profit work. Most of the time, it’s even more complex. Many of us are addressing deeply entrenched societal issues that are the result of systemic injustice over hundreds of years. Think about poverty or failed education systems. And nonprofit organizations still have all of the same requirements as any other businesses: managing staff, payrolls, strategy, community perception, legal compliance, etc. But with fewer resources. Yes, leaders of larger organizations do tend to make more, but they may be managing hundreds of staff and a budget in the millions, which they often have to fundraise for, in addition to all their other duties. Why should a nonprofit leader get paid less than a for-profit leader for having the same or higher level of responsibility and stress? Also, we should reevaluate what we value in society. Movie stars, athletes, and CEOs of companies that produce sugary drinks or violent video games can make millions each year, and we’re OK with that, but we’re not OK with paying one tenth of that to a CEO of a nonprofit that is working to end homelessness or cure cancer, things that would benefit all of us?”
• “But…but, ya’ll are charities!” Counterargument: “The challenges out there are complex,

  

  and nonprofits need to be equipped to handle them. Who do you think would do a better job serving people—an organization that underpays its staff, has a leaking roof, no website, no heating during the winter, a poorly paid leader, and everyone is terrified that the family of possums living in the cushion of the donated chair might escape? Or a nonprofit that pays its staff decent wages and benefits, has a modest but well-furnished office that is welcoming to its clients, an experienced leader who makes a salary that is on-par with their peers for the geographic location, funding for program evaluation and effective accounting, and chairs without marsupials living in them? If you knew someone who needed help, which organization would you send them to?”



• "Well, I'm giving my hard-earned money to nonprofits and not getting anything in return, so I have a right to determine how they use it." Counterargument: "Here, read this article, 'So, you don't think you directly benefit from nonprofits.' You benefit plenty from nonprofits, in ways you don't even think about: Arts, culture, safety, parks. Imagine a community without nonprofits--which, by the way, includes zoos, museums, universities, and many hospitals. Would you want to live there? You want nonprofits to exist and be effective at their jobs, right? 'Overhead' ratio is not a good indication of how effective they are. It's like determining how good a wine is based on how much the wine company spent on insurance and advertising: 'This 2014 pinot grigio is only 14% overhead, while this 2012 zinfandel claims that only 5% goes to admin costs. I'll go with the zinfandel.' "

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