EDITORIAL: ‘It’s a great cause, but ...’

Summer is the time to frolic in the sun. In Minnesota, it’s also the time for nonprofit charitable organizations to generate much-needed money through high-profile, outdoor fundraising events.

Already this summer, McLeod County residents have enjoyed an annual pork chop dinner fundraiser hosted by the the McLeod County Historical Society and the Gathering in the Garden sponsored by the McLeod Alliance for Victims of Domestic Violence. Both events attracted good crowds and were important to the success of those two nonprofits.

In the coming weeks, we’ll see more events, including the Habitat 500 Bike Ride, the Scramble for Life Golf Tournament, the BASICS Concert Benefiting the MS Society, the Relay for Life and others.
Which events or causes deserve your hard-earned dollars? That’s a decision only you can make.

The decision really comes down to two things:
1) How you value the services that the nonprofit provides, and

2) How you value the fundraising event you attend. If it’s a benefit concert or golf tournament, you might view your donation as more of an entertainment cost than a charitable donation. It depends on your point of view.

Help from an independent source
The Charities Review Council of Minnesota wants you to make informed and thoughtful decisions. We agree with this approach. We think well-run charities should be efficient with your dollars, and give as much back to the community as possible.

This desire for efficiency is one reason Bill Gates departed Microsoft last week to spend all of his time on philanthropy. Mr. Gates is credited with creating a novel kind of philanthropy: transparent, globally oriented yet locally active, engaged in both gifting and empowerment. The truly novel aspect about his foundation is that it is not self-sustaining. In fact, it is designed to spend all of its endowment within 50 years of the demise of its founders. That might work well for Mr. Gates, but we don’t know if it would play well here in McLeod County.

Yet there are some elements to Mr. Gates’ philosophy that can work here. Transparency is one. Donors should know how their donation is spent. The nonprofit Charities Review Council, which has been assisting donors for more than 52 years, provides tools to help you learn where your donation goes. The council reviews charities and helps the public determine the trustworthiness of a charity. It gives tips on how to give smart and safely. And it informs the public about charities through its accountability standards.

The 70-percent standard
One of the council’s most-often cited standards is that at least 70 percent of an organization’s annual expenses should be used for program activity and not more than 30 percent for management/general and fundraising combined. “Donors should reasonably expect that substantially more than half of their contribution and the organization’s expenses are used for program services,” the council says. “Management and fundraising expenses should be reasonable in relation to the results of the organization and reasonable over time.”

All of the McLeod County nonprofits hosting special fundraising events this summer are devoting more than half of their expenses to programs. But as might be expected, some have higher administrative and fundraising expenses than others. One place to learn about those expenses is at the Charities Review Council’s searchable Giving Guide Web page, www.smartgivers.org/GivingGuide.html. At this site, you will learn each nonprofit’s three-year average for spending. For example:

• The McLeod County Historical Society, which sponsored a pork chop supper fundraiser last month, spends 88.8 percent on programs and the remaining 11.2 percent on management and fundraising.

• The McLeod Alliance for Victims of Domestic Violence, which sponsored its Gathering in the Garden in June, spends 69.8 percent of its revenue on program services.

• McLeod County Habitat for Humanity, which will help host the Habitat 500 Bike Ride this Sunday when it passes through town, spends 72.3 percent on program services. Executive Director Julie Lofdahl said donors can also give directly to construction projects.

• Hutchinson Area Foundation for Health Care, which will sponsor its annual Scramble for Life Golf Tournament on Aug. 11, spends 58.6 percent of its revenue on programs.

• McLeod County Relay for Life, which will sponsor its annual fundraising and awareness event Aug. 1 and 2, is part of the American Cancer Society, Midwest Divison, which spends 79.6 percent on program services. McLeod County Relay for Life organizer Missy Wiedow said the goal this year is to raise $120,000.

• Hutchinson Theater Company, which will perform “Once Upon a Mattress” Aug. 7-9 — the summer musical is a big revenue raiser — spends 98.7 percent of its budget on plays. The organization has no salaried staff.

• The Minnesota Chapter of the National Multiple Sclerosis Society, which will benefit from a concert by the local musical group BASICS at Christ the King Lutheran Church on July 31, spends 45.4 percent of its revenue on program services, 29.8 percent on payments to affiliates, and 24.8 percent on management and fundraising.

Know all you can
Think you know enough about making informed giving choices? We urge you to learn more. Call the nonprofit you are considering for a donation, and ask how it will spend your contribution. We also urge you to visit the Charities Review Council’s Web site, www.smartgivers.org.

Paul Thompson, executive director of the United Way of McLeod County (where 87.4 percent of revenue goes toward program services), also encourages people to visit these Web sites:
http://philanthropy.com — Operated by the Chronicle of Philanthropy, the newspaper of the nonprofit world, this site is loaded with useful information.

www.mcf.org — Operated by the Council of Minnesota Foundations, this site explores current giving issues and philanthropy.

www.mncn.org — This site, operated by the Minnesota Council of Nonprofits, informs, promotes, connects and strengthens individual nonprofits and the nonprofit sector. Donors get the inside view.