I recently read a thought provoking article. Donors want financial transparency for churches. Some quotes form the article:
"Christian nonprofit groups and churches are being urged by donors to be more forthcoming about their spending amid the economic downturn and massive alleged fraud cases involving money managers like Bernard Madoff."
"I'm not giving to pay some executives to pad their pockets," Young said. "I'm giving for people to do God's work. I don't think anybody needs to get paid half million or $1 million a year for running a 501c3 (nonprofit group). I think that would be excessive."
"In tight economic times when donors are hurting financially and they're stretching their dollars to give to churches and charities, they're just simply more concerned about their dollars making a difference," he said."
Even transparency may not be enough sometimes. If the institutions that invested in Madoff's ponzi were completely transparent about it, would anyone have noticed? Madoff was respected. The point is, even if all expenses were fully disclosed, it's tough for the average donor to tell if money is being spent most efficiently.
Here's is one way to quickly guage an organization's spending habits. Look at the software and logo's on their online donation pages. If you see logos from Kint*ra, Black*aud, or Con*io, you know that the org is significantly overpaying for their online fundraising. You could also be certain that close to 10% of your donation will never make it to the charity.
Sometimes it's difficult to tell if a nonprofit spends wisely. This little trick is a surefire way to know that you're supporting a nonprofit that doesn't mind overspending on software. That's probably a good indicator that money is not being spent responsibly in the rest of its programs.
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