Why I Don’t Donate To Charity: Water

By Simon Scriver
On January 20, 2014 At 2:00 pm

Category : Best posts Q1 2014, Latest posts, opinion

Responses : 63 Comments

Why I Don’t Donate To Charity: Water

waterCharity: Water are amazing.

They’ve funded about 10,000 water projects, providing clean water to about three and a half million people. They’re ambitious, they take risks. They share their successes and their failures. They’re transparent. Their website and their use of social media are cool. They are simple and beautiful and lovable. They are an ongoing joke at fundraising conferences because everyone wishes they could do on-line like Charity: Water do on-line. I love them.

But I will never donate to them. Not as long as they continue the ‘100% model’ where they guarantee that 100% of my donation will go directly to the field.

It’s unnecessary, it’s gratuitous…the Justin Bieber of non-profit marketing. It’s irresponsible, and it’s not sustainable.

Even in the simplest of terms a donation from me would almost certainly incur ‘credit card’ fees. They “reimburse” these. They “find another way” to cover these. But what if they can’t find another way? What if they’re faced with bank and credit card fees that are not allowed to pay because of the restrictions they’ve placed on themselves? It’s unlikely…but if enough people suddenly donated on-line they’d have a debt they couldn’t pay.

And what if they can’t pay their wages? Their rent? Their electricity bill? Supplies? What if they can’t find enough ‘private donors, foundations and sponsors’ to pay these? Does my donation just sit in account, unable to be used because of their own restrictions?

And really, shouldn’t some of my donation be spent on auditing the finances behind my donation? Shouldn’t some be spent on measuring the impact of my donation? Shouldn’t some be spent on assessing how next year’s donation can be used better than this year’s?

As much as I respect Charity: Water I get the sense that perhaps they don’t respect me, the donor. You see, they say their private donors and sponsors are “some of our most dedicated: their investment fuels our long-term mission, our ability to scale as an organization and our mission to continue using 100% of public donations for water projects.” Am I – a member of the public – not capable of understanding these needs?

Most of all, the 100% Model is damaging to nearly every other charity because it gives the public unrealistic expectations. It implies that ‘100% to the field’ is desirable, truthful and even possible. It’s not.

Instead, another charity – a smaller one, that doesn’t have the backing of private donors and sponsors – will have to say that No, sorry, the 100% model is impossible. They will lose donations and lose support through the misconception that anything less than 100% is wasteful.

Charity: Water…please…for the sake of fundraising and charity and everyone’s future…please lose the 100% model.

Simon Scriver (3 blogs on 101fundraising)

Simon is the co-founder of Total Fundraising and also sits on the board of Fundraising Ireland. He tweets obsessively from @TotalFR, blogs at ChangeFundraising.com, and speaks at conferences in Ireland and abroad.


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Comments

  1. Why I don’t put money into a street’s fundraiser’s bucket but first:
    Recently I asked via 101fundraising, what it is they ought to ‘take’ from the charity’s money. In other words ‘how much to charge’ to do the fundraising work. I asked if there were any blogs on this: the answer: No, none as yet.
    So, you compare notes, such as World Vision (I dare say a leading, world famous fundraising company, right!?): they don’t hesitate to say out loud that they use 25% for ADMIN. (that would be short for rent, salaries, your electricity bill etc., right?)
    A local company vie an ad in the paper offered a job, standing on a street corner with a collection bucket and I’d get 40 cents in the dollar! Say HOW MUCH?..and to think of it that ‘they’ would take their cut, makes you wonder how much goes to that charity. In short: “too much goes nowhere near the charity so I don’t pay into a bucket anymore”.

     — Reply
    • Yes you should probably never pay in to a bucket, or respond to a TV ad, or sign up to a door-to-door fundraiser. You should pro-actively find out the most cost-effective way to donate to the charity you want.

      Unfortunately the majority of the public won’t do that so we need to spend money to raise money. So is it fair to spend 40 cent to raise €1? Well, if the charity wouldn’t have received that Euro otherwise then I would say yes.

       — Reply
      • I agree the 100 percent pledge is counter productive, but suggest you rethink your statement on canvassers.

        The door-to-door and on-the-street fundraisers often serve a programmatic as well as development function. To my mind 40 percent to these front line staffers seems low. Why? They’re building a list that will be used for outreach, advocacy and fundraising. They’re spreading the story and raising the profile of the issue or organization. They’re toughening up the next generation of fundraisers. And, all the while, they bring in cash. Say “no” to saying “no”!

         — Reply
  2. I agree Simon, well done and thank you for articulating it so clearly.

     — Reply
  3. Hmmm. I see you point Simon but I like what Scott Harrison did. He went to his friends asked them what they wanted to see in a Charity (transparency and 100% going to the ’cause’) and gave it to the world. He broke the mould.

    Whether an organisation can achieve the 100% model or not, I think the real issue is transparency. Charities in general need to start being more honest and upfront about how they spend their money, admit they are a business operation like any other and gain more trust from their donors.

     — Reply
    • If he used the 100% model at the beginning he wouldn’t even have a website.

       — Reply
      • What do you mean? I’m sure the website budget wasn’t taken from donations from the public. I’m sure a cool friend did it for free ;-)

         — Reply
        • ‘A cool friend’ is hardly a business plan.

          We can discuss over our next lunch, but I know I’ll never change your mind. Some good comments here though.

           — Reply
          • Clearly Scott had a very good business plan!

            I’d love to debate over lunch, where are you bringing me?

             — 
          • I have relied on “cool friends” to do websites and run our network. And then “cool friends” move and NO ONE ELSE KNOWS anything about our website or our network. Not a good business model because it is not sustainable long-term.

             — 
        • Scott Harrison was an upscale club promoter before he started Charity:Water. His “friends” consisted of celebs and others with deep pockets. That certainly worked to his benefit and helped to grow the organization quickly.

          The reality, though, is that most people who start non-profits are not Scott Harrison. They don’t have the deep connections to deep pockets to repeat the Charity:Water model. And Simon is correct in saying that that this model isn’t sustainable.

           — Reply
          • PS – the friend who helped with the website could possibly be Scott Harrison’s wife, Victoria Harrison. She is the org’s Creative Director.

             — 
  4. Hi Simon
    Good blog, and so true. I met Scott Harrison (founder of Charity : Water and a truly amazing and wonderful bloke) at a conference, and said the same things to him.
    The problem is, they really believe, and get feedback from donors that their offer is what donors want.. Maybe three or four potential donors choose not to donate for the same reasons as you, but Charity : Water thinks thousands more choose to donate because of it.

    The biggest problem is that it is a damaging statement to the sector, as you point out. We wish people would understand that admin costs are a good thing – not a bad thing, as you pointed out too.

    However, my research shows that whilst donors say that admin costs are really important, how they behave does not reflect that.

    You can even prove this within any group of random strangers: ask them who their favourite charity is andwhy. Next to none will say because admin costs are low. Then ask them if admin costs are important to them. They will say yes. Ask them what is the admin cost of their favourite charity. None will know.

     — Reply
    • Thanks Sean – really appreciate it.

      Yes certainly it’s important for the majority of people, and it will continue to be so until charities show them why it doesn’t make sense.

      If we can’t rely on charities themselves to get that message across then what hope do we have. At the moment many charities perpetuate the problem – if you keep saying how great your low admin costs are then people will keep looking for them.

       — Reply
    • Without a doubt it hurts the sector, especially small and local NPOs that do not have the connections to land a major sponsor.

       — Reply
  5. PS – except Charity : Water donors because they keep getting told it is 100% to cause!

     — Reply
  6. This makes me think of organizations that have a sponsor cover the food and room costs of their fundraising gala, so their guests can feel they are giving 100% to the cause. But I recently read that even in this case, the donor still cannot claim 100% of their ticket price as tax-deductible, whether another sponsor claimed food costs or not.

     — Reply
    • That’s really interesting – is that U.S.A. presumably?

       — Reply
      • Amy

        Yes this is in the USA and the rationale is that if you pay $100 for a dinner auction and get $60 worth of food and wine, then you should only get a $40 tax benefit.

        I think this is a fair rule. It prevents charities from charging a donor, for example, $10,000 for a superbowl fundraising event where the donor gets superbowl tickets, food, and VIP access to events – all valuing, say $9,000 – and the donor gets to write-off $10,000 on his taxes. In this case, he would only write off $1000. Charities can’t simply charge up their events so that wealthy donors get all the spoils.

         — Reply
  7. I’d be interested in a little transparency on exactly what 100% actually means, anyway. I’ll admit I haven’t looked in depth at their website (though I did study their beautiful and impressive long page on impact), but does it include the costs of transporting people and equipment to well sites, for example. Does it include accommodation for them? Does it include anything to cover costs of data collection and analysis so that they can put together their beautiful and impressive page on impact?

    As it happens, a charity in the UK similar to the one i work for has income of approx £1million per annum and their annual accounts on Charity Commission website claim they spend it all on their charitable activities. How that doesn’t trigger an automatic alarm at Charity Commission HQ, one can only wonder…

     — Reply
    • That’s very interesting about the UK example. How could any formal body accept that as reality?

      And that’s a fair point about what’s included in ‘the field’. Every charity would have a slightly different definition, and yet they’re all being compared. Is ‘the field’ the field worker? Their transport? The person that organised them? The CEO? Where do you draw the line?

       — Reply
  8. Love this comment. I too love Charity: Water, for all the reasons you list. But it’s beyond time to destroy the myth that charities should strive for the lowest possible overhead. Everyone knows you must spend money to make money. If you don’t invest in infrastructure and staff, you simply can’t do an effective job. Thanks so much for raising this important point!

     — Reply
  9. Hey SImon, half of me appreciates your efforts to help the fundraising industry, while the other side of me is disappointed that you would choose to pick off Charity:water. Did you interview their leadership for a rebuttal paragraph? That would have helped your article. There are many orgs that want to know how to be more effective. I am thankful for the CW model. I’d say it’s working well. I look forward to the buzz your article is going to create…which is probably an underlying reason for your efforts here.
    Charity:Water, thanks for setting the bar high! Cheers

     — Reply
    • Sorry to hear you’re disappointed Mark. But I would criticise any other charity that claimed the same, if I was aware of any. It’s damaging to other charities.

      Absolutely would be interested in a Charity: Water rebuttal, but they have been quite clear in their website, videos, etc. on their stance and the thinking behind it.

      I’m curious why you say you are thankful for the CW model?

      Thanks a million for commenting.

       — Reply
  10. Delighted to hear this sensible analysis. Love the organisation charity:water but think the 100% is just a distraction that avoids real questions about how we make sustainable and scalable change in the world. (Also you need to look at the actual size of charity:water which is not the same as its brand reach.)

    There are lots of great organisations in the WATSAN space doing bigger stuff but aware of the need to spend money on management. AND of course since charity:water mostly funds these agencies to deliver its projects the ‘admin’ they deny is simply built into the ‘downstream’ agency’s costs. So it’s not really true the 100%…

     — Reply
  11. I really do see your point Simon however I feel we are fighting a losing battle. Donors want clarity. Answering the eternal question “how much of MY donation goes directly into the work of …..” is impossible to answer simply and honestly. … Church gate collection 95%?? flag day 80% if you take a sticker, 67% if you choose a metal pin?? Run a marathon … ok you got a t-shirt and the postage and the photographer and raised €50 so 75.56%. It’s not good enough to lump all donations together and calculate the costs and come up with a neat 85%. I think what charity : water have hit on is a transparency model that works. Their savvy donors know that there are costs just someone else’s money is covering them … the others, well frankly we aint ever gonna change their doubting minds. I doff my cap to Mr. Harrison. However it’s not the only answer, we just need to come up with another genius solution that offers similar clarity, let’s not knock but learn the lesson, Rosarii

     — Reply
    • Great debate. I test donor feelings about non-charitable expenditure in focus groups. The groups have a legacy focus and it is always interesting to hear donors say they feel that a legacy is an investment and not a donation so they care even more deeply about how money is used.
      When a charity, and there are quite a few in the UK says 100% goes to the cause the commonest reaction is: but surely you have to spend money on administering the charity so I do not believe you.
      What I love about donors is how fickle they are!

       — Reply
  12. My own problem with the “100% to the field” statement is that it’s using the letter of the law to defeat the spirit.

    It’s telling me that all of “my” money goes to the field, and that all costs and charges are covered from elsewhere. It’s being disingenuous. Don’t tell me what proportion of “my” notional money goes to the field, tell me what proportion of all your funding goes to the field – that’s the only figure that counts.

    Personally, I find it tantamount to false advertising.

     — Reply
  13. Dear Simon, Wish you a great year of happiness and prosperity. Iam Director General of Saritsa Foundation A Mobile University for Disaster Risk Reduction and Climate change. It prepares vulnerable women,girls, children, disabled,seniors and common citizens by imparting Life Saving Education at their Door Steps in 19 states of INDIA. LIFE SAVING EDUCATION is not an emotional concern for donors internationally and more so in INDIA. I have mostly worked on my own pension of a Colonel or 10 percent of the resources we receive .just survival to do good is also a way to GIVE.

     — Reply
    • Right here is the right webbpage for anybody whoo would like to understand this
      topic. You realize so much its almost tough
      to argue with you (not that I really will need to…HaHa).
      You certainly put a new spin on a subject which has been discussed for decades.

      Excellent stuff, just great!

       — Reply
  14. I’m not sure I follow the logic that seems to insinuate that being resourceful and finding a way to cover “admin” costs through private donations is perpetuating the myth that admin costs are evil.

    I have always been vocal with friends/family about the fact that these “scores” charities get from “watchdog” sites that are based partly on “% of revenue spent on admin fees” are complete crap. The example I always use is “If American Cancer Society found a way to cure ALL FORMS of cancer next year but in order to do that they had to spend 99.99% of their donations on ‘admin’, would you care?” The point is OUTCOMES/IMPACT, not “% on admin fees”. I get it. And I think we aren’t giving the average person enough credit if we believe we’re the only ones who get that.
    So…all that said…if an organization like charity:water CAN deliver on the “100% to field” model NOW (even if it’s not indefinitely sustainable), why shouldn’t they? If they aren’t “shaming” admin costs in the process, what’s wrong w/ the model? Are we really saying that if ALL orgs can’t achieve a particular model then NOBODY should use that model? It’s sad to think that charities should only aspire to whatever their peers are also capable of achieving. That’s not how I want my favorite charities thinking.
    Last thought…do we know for a fact that charity:water isn’t doing all the things listed above (auditing, measuring impact, analyzing to improve results, etc.) with “private” donation funds that allow them to deliver on the “100% model” for the public? Unless we KNOW they aren’t, then we shouldn’t insinuate that they aren’t. That’s not very fair.
    I am all for calling “BS” on the old-school rhetoric regarding % of spend on programs vs. admin, but I find this a very odd choice of charities to take issue with as a means of destroying that misconception.

     — Reply
    • Kim

      For me it’s about two things: transparency, and the impact on other charities.

      We know from experience that the media will over-simplify things. If a charity’s admin costs are covered by a donation there will not be any reporting on the ‘how’, the only information that makes the headline is that the charity’s admin costs are 0%. I would say that the average donor does not realize how the 0% is achieved.

      This leads into my second worry, the impact on other charities. In my example above the charity still has administration costs but the average donor will see the 0% and not understand why other charities cannot/choose not function in the same way. They are led to believe that there are no admin costs instead of learning how the admin costs are covered. The public (I speak from a N. American perspective) is trained by media to ask admin %, and nothing more. There is no interest in knowing why the percentages what they are, or the effectiveness of programs, etc. I’m not trying to say that one way is better than the other, only that it leads to confusion amongst donors.

      Good on you Scott for speaking with friends/family about charity scoring sites. That must make for some hard conversations.

       — Reply
  15. What my problem is with this model is what is a 100% charity donation. In my last job I worked for an Animal Charity and asked these questions to our sponsors and donors. Do you want that all your gift is spent on the animals? General answer yes, not to the people, but spent it on them.
    Okay. I give you €100 to a stray dog and he will look at me and drool on it. Maybe eat it. Shouldn’t he have shelter? Yes that would be nice. Who will build the shelter may I pay these people. Yes of course. And maybe food? Yes that would be nice too. Okay who is going to order and give the food? A volunteer? Of course a volunteer. But wouldn’t you want the best care for this dog? Yes. So shouldn’t the volunteer have an education, or even better be someone traint for this job? Yes that would be perfect?
    So in short you want your money to be spent on quality care? Yes that would be the best way to spent it. In order to do this we have to pay people. Yes, but if you explain it like this I wouldn’t mind.
    Than a last question. If I wasn’t here to explain in an understable way why I need your money to help this dog how would you have known how to help him?

     — Reply
  16. Reminds me of other stories. Our local United Way received a large bequest that established an endowment that paid for its administrative and fundraising costs. So they also, like Charity:Water communicated to their donors that 100% of their gifts went to the charities they wanted to support. Which was true … however, it completely obscured their real overhead and administrative costs. At one point, they started conflating the two and as administrators of a state and federal workplace giving campaigns they were using the untrue 100% program, 0% overhead in their campaign materials. Until they were called on it by another federation as it clearly violated the definition of how to calculate your overhead.
    So, while Charity:water may be accurately communicating how they use donations dedicated to their grants and assistance, they are omitting their federally reported overhead numbers.
    Though savvy donors will check them out at CharityNavigator and find the other numbers.
    If we look at Charity:water’s federal filing for 2012, they are reporting 84% to program.. If you look at what they distributed in grants and assistance, it’s about 78% of total costs. Not bad. After salaries, they don’t seem to have a lot of other expenses proportionately. But then again, they aren’t running the water programs, just raising the money for them.

     — Reply
  17. Simon, your great blog has generated excellent comments. What a read! Thank you!

    My heart sinks every time I see an Annual Report that shows a pie chart reflecting the percentage of revenue spent on admin and fundraising without a qualifying explanation like “all our expenses are focused on achieving impact, including our admin and fundraising costs”.

    Why do we persist in this kind of reporting?

    Over the last few years, the non-profit sector has become increasingly defensive about these red herring issues – usually in response to media attacks. But it’s really up to the non-profit sector to position the reality of what it takes to achieve impact.

     — Reply
    • I completely agree Gwen.

      By perpetuating this, and trying to outdo each other and present the smallest ‘admin’ costs, as a sector we’re reinforcing with the public that somehow ‘the cause’ only relates to a percentage of what we spend.

      It’s actually very simple. Charities shouldn’t spend a single penny that can’t be somehow related to ultimately delivering more of their charitable mission.

      Wise, well thought out, spending which result in impact is 100% about the ’cause’. Poor, wasteful spending is always wrong whether it’s ‘in the field’ or in the office.

       — Reply
  18. This debate makes my head buzz! SO many arguments on both side of the fence I think.

    I’m going to ask the question I asked over on twitter in relation to this debate of folks reading and commenting here….

    If you knew that the 100% model that Charity:Water use could significantly increase your income and help you achieve your charitable mission quicker (and that you could sustain that model), would you use it?

    (big assumptions here being that you’ve tested and researched and know that 100% model would increase your income and that you know you could secure the core costs from some key donors for a good period of time!)

     — Reply
  19. The United Methodist relief agency (UMCOR) makes the same claim for emergency disaster relief because their admin and fundraising costs are paid through a church-wide appeal. But donors look at this claim, then the rating agencies and are suspicious because they don’t align. In the age of increasingly well-informed donors that require a high level of transparency, is this even a desirable or even necessary model?

     — Reply
  20. CB

    One of the UK’s biggest charities – Comic Relief – has used this model for 20 years. Every Red Nose Day they advertise their Golden Pound/Comic Relief Promise – that every penny of every pound donated by the public will be given to a project.

    There’s a similar debate around that and whether they are making other charities look bad. Since lots of those charities’ running costs are part funded by Comic Relief grants, it’s not an argument that many charities want to make in public I suspect.

    The 100% model alone wouldn’t stop me from donating. As others have said, it’s really about the impact they make with their money.

     — Reply
  21. They should be able to do a special fundraiser for the costs of running the foundation, or even find special sponsors for this which can get the benefit of media attention from them.

    The should however keep advertising with the 100% rule, since this is EXACTLy what EVERYBODY wants.

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  22. Great article. Anything that promotes transparency and drives efficiency is a good thing. However I agree that the charity is a little disingenuous… Having admin or any other overhead provided for free is a donation therefore 100% of donations do not go to the front line. All organisations need to fund overheads. It would be interesting to see how efficient the charity really is.

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  24. Simon, I think you should donate to charity:water and designate your gift for “overhead.” The fact is, few donors are excited about paying a charity’s electricity bill; they want their funds to go directly to where the “action” is. It’s an unusual donor who realizes that big picture there’s no meaningful difference between overhead and the “field,” or even that “overhead” is a better deal than the field — because it generates revenue.

    I don’t see how using our fundraising messages to “educate” donors into thinking differently can be justified. It’s a) impossible; and b) irresponsible. You can’t make people want something they don’t want by insisting they should want it.

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  25. Excellent – I couldn’t agree more. But the public at large needs educating and in the meantime ….

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  26. Will you write about the 200% model next? That’s very common too. Is it twice as bad to make people think one dollar can turn into to two?

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  27. One of the challenges is that, for the most part, every charity has their own (often expensive and not interconnected) systems. To track volunteers, donors, online event planning, donation processing, Facebook, Twitter, etc.

    Online donations only account for about 7% of all donations. It seems that the sector has not been transformed like the music, film, publishing industries.

    Simon, do you think there is opportunity for one dominant platform to come along and have a transformative impact? One that will be used by a vast group of nonprofits, companies, and individuals?

     — Reply
  28. Interesting!

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  29. Amen brother! I have been met with this so many times when donors wonder why 100% of the donation doesn’t go directly to the people we serve. We serve the homeless through large shelters we operate in Montana. Our utility bill for ONE MONTH is over $10,000. We have overhead, overhead that cannot be passed on to any other means, that you can’t find grants for, and that you cannot do away with. Let’s be realistic, let’s be transparent. That should be enough.

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  30. I to love charity water. How can you not. I always wondered if you add their public donations with the donations for their operating expenses what the percentages would look like. That would give us a true idea of what percentage goes towards projects.

    A fantastic marketing ploy but what they do is really “smoke and mirrors”.

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  31. Ina

    Just add to your donation with the caveat that the extra is to help run the organization that is doing such a good job.

     — Reply
  32. Pingback: Can We Move Beyond the Nonprofit Overhead Myth? | Social Velocity

  33. simple answer is don`t give to any, they are all scamsters

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  34. Lots of “what ifs?” in paragraphs 4 and 5. Do you have any data to suggest that they are indeed unsustainable? Or are you — as most of us are tempted to be, admittedly — a bit envious of their success?

     — Reply
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  36. Hi Simon! I agree with you completely on this matter! Reading your post enlightened me in a way because, although I DO agree with everything you wrote, I didn’t previously have my opinion on any of it- I guess I just hadn’t thought about it before. I had never looked at a 100% model in the same way that you do, but reading your words really seemed to “click” with me. I read a lot of blog posts. I write a lot of blog posts. But I had never come across one that made me stop what I was doing to just sit and CONSIDER. This was actually quite a strange experience for me, to be honest. I have been dealing w/ some negativity and a ton of stress lately, so I put myself into “Go-Mode” to keep things together. I read blog posts, scan others, and bookmark about 50 more to “look through later”. I created a journal & in it I scribble notes & jot down thoughts and sketch out plans, designs, and layouts. I work on things for 20 minutes here, 15 minutes there, three hours here. I organize and sort and tidy up– then I mess it all up again when I have a project idea and must complete it immediately. I never simply PROCESS. I’m constantly inspired or motivated- but usually lose interest before I finish writing the thought down. The inspiration lasts as long as it takes to right click & click “save image as…”
    Anyway, I’m not trying to get too deep here, I just want to thank you for allowing me the chance to delve into my thoughts and really ponder the information you’ve provided. It was so new- yet so nice!- to acknowledge my own thoughts on the subject. I am not sure what it was, but your post- your words- just opened my mind and gave me the freedom to really think about the potentially perilous impact Charity:Water may have on other non profits.

    I researched a bit more and thought the following information might be interesting to you:

    #1– American Association of State Troopers Scholarship Foundation (AASTSF) states on its website that “97% of your donation will be deposited directly into our Scholarship Foundation account, which is used to provide college scholarships to children of our members,” and explains that the remaining 3% is used to pay the administrative costs of processing your donation.
    **But Based on an analysis of this organization’s audit and tax form for 2009, the most current available, AASTSF spent only 34% of its budget that year on scholarships.)

    #2— On its web site Kids Wish Network (KWN) says that all donations to its Guardian Angel Fund “directly support program services, ensuring that 100% of your contribution benefits the children we serve.” While it may be the case that donations they collects for this specific fund are only used for programs, OVERALL, KWN uses the vast majority of donations to pay many for-profit fundraisers. Their 2010 tax form shows that fundraisers brought in $14.4 million from the donating public. The charity saw under $1.6 million of this amount, with fundraisers taking fees of $12.8 million. KWN earned an F rating from AIP for inefficient fundraising and for spending only 18% of its total expenses on its programs to help sick and dying children.

    #3— AIP has previously reported on Smile Train, a charity that helps children with cleft lips and palates, and that claims in its direct mail solicitations that “100% of your donation goes toward programs – 0% goes toward overhead.” The charity says “All non-program expenses, such as overhead and fundraising, are paid for with start-up grants from our Founding Supporters.” While Smile Train may split up its resources into different internal accounts that it uses for different purposes, this is not the same thing as it having no overhead. In 2009 Smile Train spent 30% of its total expenses on overhead, and 70% on programs – not 100%.
    ——————–
    Anyway, I agree with you, though- these charities need to stop claiming 100%- especially when the truth of the matter is that they are only using clever accounting or creative semantics to fool their donors. This seems that it would eventually just confuse people– about what it actually costs to maintain an efficient and effective nonprofit, and the little guys are going to be the ones who get screwed over in the end- those smaller companies who aren’t shelling out $750,000 and up salaries to CEOs and CFOs and Chairmen and ….

     — Reply
  37. Hi Simon, interesting blog! I do agree with you, furthermore we doubt the sustainability of most of the Charity:water funded NGO projects. We wonder what you think of our 100% model, as we are a Social Enterprise, taking care of our overhead ourselves, facilitating durable water projects in Africa for our donors, low profile, low overhead anyway, so indeed 100% model.

    See http://www.fairwater.org

    Cheers,
    Paul van Beers
    FairWater

     — Reply
    • In addition to above, some comments on what is overhead, but first a little on my background and experience on this. Since 1985 i have been active in the water sector ( with a 3 year break to manage environmental projects) as a consultant, contractor, project director, government advisor, etc. all the time my salary and expenses were paid for, by God knows where the money finally came from. Was it all overhead? I guess yes,

      Was it all well spend, I’m sure not. I had to do all kind of work, from studies to planning and trainings and endless meetings and so on.

      In fact, most of it was a big mess to be honest and the main thing that came out of it was that I myself learned a lot how things work and don’twork.

      With all that experience, I finallly had enough courage to start my own organization, and called it a “Social Enterprise” which is a not-for-profit business organization, with a specific social product and mission.

      The product is a very reliable water pump, the famous “BluePump”, we don’t sell it ourselves in fact, but we get royalties from the company that sells it world wide.

      In the meantime, we accept donations from others, private people and companies, that want us to organize for them to replace broken pumps with our BluePump. Because we subcontract this work out to our local dealers, we can say that 100% of their donations goes to the project. In fact, our dealers present us a normal invoice for the work and that’s it. Any money that remains is put in a trustfund that we use again to do more projects in a similar way, with invoices from the local dealers. Basically a very simple and transparent procedure.

      Is it truly a100% model? Yes and no. Yes in the sense that indeed 100% of the donations is spent in Africa only for the project; Idle time between projects is not happening, so it’s very effective as well. No in the sense that there is indeed a small incentive for us to do this “free” work. Because at the end of the day, we do put time in that we are not paid for, but we get in return a good reputation and company profile, which could increase BluePump sales and indirect our budgets.

      However, i agree with the observation that stating having a 100% model can be een as an accusation towards others that dont have it, and be used as a marketing tool. The first was not our intention, using it as a marketing tool was indeed the objective. Why? Because we feel that charity NGOs are growing into an unwanted business direction using more and more the problems of others fir their own benefits. No doubt here and there are some good intentions, but ovrrall the charity market is a good one, also because there is no control whatsoever on impact and lasting results. Simply by the ad-hoc nature of most projects, there is little or no attention for sustainable services.

      The case of CW is typical for that. All good intentions could not improve that as well. Most water projects that are funded by CW are not sustainable at all. They know that, but cover up. Of course, otherwise the whole CW project will collapse. But it will anyway, as soon as the weldoers behind CW find out what really happens with the donatoons that the pay the overhead for. I have nothing against CW, on the contrary, i like the guys, but we have to be realistic as well!

      A good example is their latest 5M Google gadget that monitors if the pump works or not. This is ment to convince the simple donors that all is taken care of, the “American way”. Big brother is watching you. In reality in Africa this is a big scam, needles expensive, useless and not sustainable as well, but for fundraising it works perfect.

      Is 100% with CW indeed 100%? Of corse not! The moment the money arrives in the bankaccount of the psrtner NGO, directly 20 to 50% goes to THEIR overhead, so it’s just a clever marketing tool, used for PR for CW and the celebs behind it.

      Is that a problem? Of course not! Any business will tell you whatever to get you on board and in fact CW is not lying. 100%,goes indeed to the “field” and is only there used up by overhead. Clever!

      But it’s an interesting discussion and it shows how easy and ignorant the public is in fact. They don’t want to know really what happens with the money, they just want to hear that it’s OK, and that is something else.

      With FairWater we want to make a statement that fundraising for projects to help the poor (!) should ONLY help the poor, and in a sustainable way.

      As long as CW field partners are still using fragile pumps that can’t be maintained (everybody knows this problem, but many NGOs simply denie it…) their field partners will still need more CW and other funding and even the 100% funding goes also 100% to waste!

      There is the real problem. Poor people in Africa became fully dependend on NGOs repeatec donations to help them repairing pumps that dont work.

      See our websites fairwater.org and watsan.org for more info if you are interested in the sustainability issue of water points in Africa. There you find the unconditional hard true story.

      Thanks!
      Paul van Beers

       — Reply
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  41. I don’t see anything wrong with the model. Most small donors don’t even consider administrative costs and brush over sponsors. A 100% model makes them feel like they are giving to a good organization no matter what the cause is. Interesting article, but a weak argument.

     — Reply