The charitable sector has recently come under fire again for its fundraising practices. This time from CBC. The focus of their reporting is third party fundraisers and the cost of fundraising. The news coverage has highlighted the high ratio of fundraising costs to returns for some charities.
 
Approximately 200 charities were identified as spending more than 50% of the funds raised on external fundraisers.
 
The number of charities who have fundraising costs greater than 50% of revenues is actually about .3 percent of the total number of charities, (214 out of approximately 85,000 registered charities).
 
The statement from Imagine Canada, issued yesterday, provides an excellent and balanced response. We also echo their comments, and those of the news coverage, that donors should carefully check out charities before they give.
 
Sadly, however, the message that will likely be retained from this coverage is that the charitable sector as a whole spends too much on fundraising. For our already beleaguered sector, currently experiencing very significant resource challenges, this is yet another challenge to deal with.
 
This is also part of a much bigger issue for the charitable and non-profit sector. Our administrative costs, our staffing costs and our infrastructure costs, all of which are the lowest of any sector, are consistently under a microscope.
 
Undeniably, all charities must maintain high levels of accountability – and the vast majority do. But for this unique sector, dedicated to the public good, there is a universal expectation that this good work will be achieved with minimal resources. And, in many cases, achieved while responding to increasingly heavy demands for service. Any deviation from this ‘poverty’ ethos results in the entire sector being pilloried.
 
Expectations of the sector around infrastructure and other expenditures, need to be examined in relation to those of other sectors. For example, overhead costs of 15 – 20% are deemed acceptable for the charitable sector. By comparison, the norm for retail is 30% and for Software & Services 47%.
 
Some would argue that a sector, whose work is dedicated to community benefit, should be better supported and resourced than any other. Dan Pallotta, in his provocative book, Uncharitable, challenges many of our fundamental canons by arguing that society’s non-profit ethic undermines our ability to resolve societal problems and puts charities at a severe disadvantage.
 
It is of note here, that our sector is facing a looming leadership gap. Many of our long term leaders will be transitioning to retirement within the next 5 years. The shortage of individuals stepping up to leadership roles has been flagged as a serious issue.
 
However, those contemplating leadership roles cite long hours, low wages and few resources as barriers.
 
If we continue to view the charitable sector through the current poverty lens, we run the risk of losing these future leaders to business, government and other sectors. We also run the risk of losing our charities.
 
Note: Vantage Point (formerly Volunteer Vancouver) is hosting a Leaders Forum with Dan Pallotta on November 18, 2010.

Val Green is the Executive Director of Volunteer Victoria. Val has over 25 years experience in the non-profit sector. In addition to her work with volunteers, Val has always been an active volunteer in the community. Currently, she serves on the Leadership Roundtable for the Quality of Life Challenge and on various community advisory committees. She welcomes your comments and feedback.