Hacker News Reader

Comment by ticmasta | Hacker News Reader

Well, check out the annual reports from your favourite charitable organizations; the most successful ones have a high correlation with those where fund raising costs is the biggest line-item expense. It seems to be this "grow or die" mentality spilling over from the corporate world. United Way is one of the biggest offenders.

I wish more charities would constrain themselves to their original narrow mandate without success inevitably growing their "addressable market"...

View on HN

I'm an academic researcher that studies nonprofits and trust me, you are not alone in thinking this. But the problem with charities constraining themselves to their original narrow mandate is that this leads to tiny nonprofits trying to solve the greatest challenges facing humanity (poverty, disease, etc.). Tiny nonprofits simply cannot impact the world significantly.

Sure there are examples of egregious shadiness in nonprofits, but an above comment mentioned the Red Cross basically putting 375m/500m of donations toward the programs. Honestly, if they send every dollar received straight the beneficiaries, they would have raised significantly less than 500m. Would it be better for the programs to receive 375m/500m or 25m/25m? Sure we don't know how much they would have raised without all the fundraising, but this issue is more nuanced than people think.

EDIT: I read the Red Cross article from NPR, and it appears that example falls under legitimate questioning of the use of funds. My larger point still applies in general though.

A career ago I spent a good chunk of my time going over the financials of non-profits large and small. It's an entire industry passing grants back and forth, skimming a percentage each time. United Ways are typically run by a board of trustees consisting of the local elite; lawyers, accountants, small business owners. The UW sends money to other local non-profits who spend it on services and rent from those same lawyers, accountants, and small business owners while employing their failsons. Thousands of donations go in, and at the end someone gets a bag of dented cans of cream of mushroom soup.

Not all charities are like this; the against malaria foundation for example seems very cost effective

AMF is a UK charity so I'm not sure I'm reading their financial page correctly: https://www.againstmalaria.com/FinancialInformation.aspx

Looks like they're using half their revenues to build up a bank account. To smooth out their net purchases? For the most part, I like their model. They turn thousands of small donations directly into nets without a bunch of middle men.

By their "failsons" do you mean their "ericsanddonaldjrs"?

https://www.thedailybeast.com/what-is-failson-culture-look-n...

You can find more effective charities at givewell.org

Big Charities are fundraising companies with a branch of operations which do some actual good.

I feel like this is an obligatory reference: https://www.fastcompany.com/3035734/ikea-is-a-nonprofit-and-...

Other groups who have been "nonprofit" until recently include Visa (the credit card network) and the NFL.

Today I learned - thank you!

Reply on news.ycombinator.com