Athoned Out

[drscott]

I've been meaning to write something about the plethora of fundraising walk/ride/run marathons for awhile, and several things trigger me today; Bob / low_fat_muffin's announcement of his participation in an AIDS marathon (go Bob!), a story about campaign finance "bundlers" in the WSJ, the Girl Scout cookies we have left over months after excessor bought a bunch to support a friend, and an ethics question in the WSJ about whether a boss who enters such a fundraising endeavor is improperly pressuring employees by requesting donations.

All of these things began as small-scale, amateurish efforts to provide a little extra money for a good cause while giving participants a chance to enjoy a community effort. As they have become institutionalized and professional, and as more and more of them have been created, the market for this kind of extended fundraising outreach has been saturated. We have given to a half-dozen friends in the past few years, and while we love to support them, it's all becoming a little much as the amounts they want to raise increase and the pressure to show you are a good member of the community by giving more and more rises, sometimes reaching the extortionate (as in the case of the boss who will clearly think of you as not supporting him if you don't pledge support for his participation.)

We are happy to donate large amounts of cash to be spent in current good causes; we give heavily to Lambda Legal, for example, which also uses a lot of peer pressure and networking to raise its money. But the money goes directly to the work. In the case of these marathons, there is often a profitmaking company that has been authorized to run the event in the name of the charity, and only a fraction of the amount raised will actually go to the charitable organization. Finding out what this fraction is for a particular event can be hard.

With my financial planning hat on, I think all but the wealthiest among us should give small amounts to directly support community efforts, but would be wiser to fulfill charitable impulses by giving time and attention to people they know who need it. Unless you are sure you won't be a burden on someone else in your old age, death is the best time of all for donating large sums of cash. But maybe I'm just an old fogey.

Almost every participatory fundraising event I have ever seen would do much more for the charity if the participants did the same number of hours of their normal paid work and just gave the cash over. It might not have the same sense of group action and it might not be as fun, but having MBAs and doctors, say, collecting trash along the roadside as a feel-good environmental effort makes no sense and gives them a false sense of having paid their dues, sort of like how conspicuous consumers recycle a few cans and bottles and get their piety gene satisfied while never examining their wasteful overconsumption. Like any religious ritual, it does little but gives you the sense of being a good person while you ignore people around you that need your time and help.

Modern fundraising events are parasitic on the egos of the participants, fulfilling their need to achieve and have meaning in their life, but wasting much of the effort and time expended on overhead and organizer's salaries.

[This is why economists are not popular at parties...]

Comments

[bootedintexas.livejournal.com]

try being an accountant at parties....it isnt much more exciting

[quirkstreet.livejournal.com]

I suppose one question I could ask is whether it's "bad" to have a profitmaking company in the loop in these things .... they're fulfilling a market niche, supplying a demand, isn't that what the system's for? ;-)

But to your point: giving time and attention to people or situations one knows directly is a great idea, and one lots of people put into practice, whether or not they also give sums of money. I would argue, however, that volunteerism of that sort is under pressure by the demands of making a living these days. Many people feel they can give money rather than time, and that the money is a stand-in for their concern for the cause in question. While the loss of some of the contribution to a profitmaking company, or to nonprofit organization inefficiency, may be on their minds, they still consider it better than nothing.

Which brings us back to your point about conspicuous consumption and feel-good environmentalism. While that kind of thing certainly sticks in my craw, too, isn't it just the result of market forces?

[faghatesgods.livejournal.com]

years ago, when asked to donate to a friend for his AIDS ride from Boston to New York i did some research and dicovered that only something to the tune of 25% was getting to the charity.

The bulk of the money was going to pay for the riders trip and a percent of that went to the company managing the ride.

Visibility is important, but not at a 75% fee. I donated the money I would have donated to him directly to the Fenway Community Health Center instead.

If I'm going to pay for somoene's vacation, it will be my own.

It is very important to understand the percentages and decide what value the visibility of the event is worth.

[quirkstreet.livejournal.com]

An educated consumer is a good thing, even when thinking about charitable giving.

[faghatesgods.livejournal.com]

as an aside, I don't mean this as a criticism for the people involved either. For low_fat_muffin, doing a marathon, I'm sure it is a huge and important personal goal for him and I think it's pretty astonishing that he can even DO it.

[quirkstreet.livejournal.com]

Agreed 100%. The reason I stuck the phrase "educated consumer" in there is: people choose to buy products or brands that they have a personal preference for, all the time, even though other people might tell them Brand X is better than their brand, or has few calories, or less tar and nicotine, or whatever.

So people can choose to donate to nonprofits even if there are profitmaking companies in the way, or if the nonprofit in question is known to be inefficent, or whatever. But making informed choices about such things is better than operating in a vacuum.

I made a conscious decision a long time ago that I will give money to street bums occasionally, when it suits me, even though plenty of people warn me that they may just spend it on booze--that's something I take seriously, but I regard it as a risk factor, not an ironclad reason to stop. It has to do with my estimate of how I'm feeling that day, my sense about the bums (ones who clean up more, talk nicer, or are regulars in my area get more action from me than others)., and so on.

[quirkstreet.livejournal.com]

Dang, my spelling skills are deteriorating. Substitute "inefficient" above.

Also, "fewer calories" for "few calories."

[dr-scott.livejournal.com]

And of course I support the idea of what you are doing, for you. This is about people thinking through what's really going on here, rather than mindlessly joining.

[notdefined.livejournal.com]

Yeah, this really puts me in a rough spot. I support low_fat_muffin wholeheartedly in whatever his endeavor, but a couple of events, the AIDS Marathon and AIDS Walk give me severe pause. A few years back the AIDS walk came under severe attack when it was discovered that it was run by a thoroughly corrupt event management company and only something like 10% of the funds collected made it to any real use. A new management company took over, but it seems that even with them the overhead is exceedingly high. The AIDS Marathon raises a red flag because of the training program, runs in exotic places (how can a marathon in Florence help with AIDS over here?) and the very difficult to find financial statistics. I no longer support the AIDS Walk nor any of its grab the theme charities such as those for breast cancer, lukemia and the like that attempt to mimic the AIDS walk. Even down to the same AIDS styled ribbon! (that pisses me off) When I contribute to the AIDS Ride, it goes directly to the AIDS organization here in SF. Yes I know they skim the cream from the top, but there are fewer levels below them to get a cut. I'll support Robert in the marathon, but only because it is Robert and not because any person with AIDS will ever get benefit from my contribution. It will always be true that direct action is the best action.

[dr-scott.livejournal.com]

No, it's not bad to have a profitmaking company in the loop, unless it takes a disproportionate share of the proceeds. It often makes more sense to outsource functions to a profitmaking enterprise than to do them in-house at a charity; and no one expects that charity staff can go without pay, or get services for free. But every organization is subject to the temptations of corruption -- many are run for the benefit of the board and staff more than the charitable goal -- and every donor should do the work needed to be sure their money is being used wisely before giving. When personal and business relationships are used to strongarm donations, you don't get much chance to do that.

Your "market forces" question: it somewhat resembles marketing for cosmetics and status goods -- selling a feeling of ego satisfaction to the ignorant. "You can be Special", "You are Someone!!", "You are the Select." Religious indulgences, "exclusive" clubs, "Members Only." People are free to fall for these pitches, but the people who make and benefit from them deserve the opprobrium of those who know better.

Now, hand me that homeopathic remedy.....!

[guiser1.livejournal.com]

It's a fact that the least wealthiest Americans support charitable causes at a greater proportional percentage of their economic capacities than do the wealthiest among us.

Having said that, I agree with Trapezebear, that being an "educated consumer" of charitable causes not only invests the individual more deeply into both the charity's purported ambitions but also the needs of the community the charity is claiming to serve.

But on top of all of that, it's still a crime that Home Depot's Chief Executive has taken home over $200 Million in salary and bonuses since 2000 while dividends to shareholders have dropped 13% over the same period. I'll bet you the farm that his charitable contributions over that period are positively paltry.

Bottom line: there's nothing wrong with supporting local charities as long as you know those local charities are being nominally responsible with the money. The cost of doing business, even when that business is philanthropy, still costs.

[dr-scott.livejournal.com]

You are most likely correct about the Home Depot guy. The corporate governance problem is exactly the same as the charitable organization problem: the incentives visible to those who actually control the organization tend to corrupt them away from its purported goal (in charities, to serve the charitable purpose; in corporations, to generate wealth for the shareholder.) This will always be a problem (known to economists as the "agency problem") whenever the executive authority is given to an agent whose interests are not precisely aligned to the owners (or the public good, in the case of the charities.) There are ways to minimize it through better design of governance, but it will never go away completely. We have a Congress run by lawyers who are closely aligned with the interests of established corporate management, so proper reforms in that area mysteriously get blocked.

[dr-scott.livejournal.com]

See even clearer discussion of the agency problem here.

[mister-don.livejournal.com]

Beliefs and actions such as yours helped end that event and redirected Fenway's fundraising for the good

[redsquared.livejournal.com]

Your timely post has got me to thinking.
I have noticed that more of my friends (and friends' friends) are involved in charitable 'athons. And that means that I have been giving more money to these well marketed charitable events than I had in the past. Most of the charities that I give to, goes directly to the charity on an annual basis with no free gifts, gimmicks or exerting tasks.

And I have found it very difficult to say no to friends that ask for support. And usually, the action of support is easy, just click on the link, put in your credit card and voila, it's done.

But I hadn't really thought about the percentage going to the charity angle that you bring up. It is a very good point. I think that for me, it will now be a checklist item that has to be completed before committing any money to to charity event.

[billeyler.livejournal.com]

I guess I shouldn't even start a sub-thread about the United Way "Give-or-you'll-be-looked-down-on" by many corporations, including the University of New Mexico.

[fuzzygruf.livejournal.com]

"Almost every participatory fundraising event I have ever seen would do much more for the charity if the participants did the same number of hours of their normal paid work and just gave the cash over."

I suppose if you're a whore, you can turn additional tricks. But what if you work a 40-hour week, with no chance for overtime? You can't raise "extra" cash by spending the same extra amount of time at your normal paid job. Okay, so half the friends I know who raise money are whores, but what about the other half?

[goldibehr.livejournal.com]

The fundraiser company's name was Pallotta Teamworks. According to:
http://members.tripod.com/~homeo/wheels1.html and this
http://members.tripod.com/~homeo/wheels8.html the "overhead" was even more than you remember. And they did it repeatedly for many years.

[hossinseattle.livejournal.com]

public policy specialist.

[hossinseattle.livejournal.com]

At the risk of a trouncing, I've finished 3 charity marathon fundraisers, including two AIDS Marathons. I never thought to ask of the percentage until after the first one. After that I asked my pal who's an ED for a charity and he said not more than 33% to overhead is acceptable. That seems OK to my gut, but I'm not an economist.

My sense is that marathons are better than rides, since there's less $ spent on equipment and stuff. My personal choice was to pay my own airfare and stay with friends when I participaed in the first one so more $ to the charity.

I did notice that some folks who didn't have money to donate were able to coerce their friends into giving stupid amounts of money. I would not ahve given the same amount of money I raised. You make an excellent point about the percentage.

[ozdachs.livejournal.com]

I do want to know the percentage of donations that go directly to services, but I am not sure that all charitable events need to have a 90% direct-to-service rate.

The community building and basic PR value of some projects is tremendous. Getting TV to show AIDS, breast cancer, juvenile diabetes, and hunger as issues which happen to people like you and your neighbors is huge. The feel-good benefit of uniting in a cause is huge.

It’s not, “Should I work for pay and donate money to a cause or should I volunteer my time for the cause.” It’s a mixture of both.

Yes, we should be aware of the amount that goes to direct services – and most of my gifts are to the organizations with low overhead. But, I strongly believe that there is a good to society done by the walkers and runners to nag us to donate. If nothing else, they are creating an awareness of charity.

Giving begets giving. I believe we could use more of acting together in community, and so I appreciate the public orgies of giving despite their inefficiency. It’s only when the campaigns become routine and bureaucratic – perhaps like school cookie dough sales – that they should be killed off.

Wait to donate until you die? Naw! If you aren’t in the habit of charitable giving most people aren’t going to do it when they die. Besides, shouldn’t you live your life expansively throughout? You cannot rely on your will as a pre-planned post-death indulgence that will excuse your lifetime of self-centered tightwadness! Of course I may think differently as I eat cat food in my old age, but I kinda think that even the Meow Mix will taste okay if I’m living in a city, state, nation, world that I helped improve.

[abqdan.livejournal.com]

A pet peeve of mine. I don't sponsor people in any of these events. I plan what I want to give over a year, and donate accordingly. I think people have generally figured out it isn't worth bugging me about these things any more. While I support non-profits with both time and money, I don't much like being put on the spot by friends waving a sponsorship form under my nose. Peer pressure tends to work in reverse with me.

[dr-scott.livejournal.com]

"We support diversity. Buthat doesn't extend to any employee not supporting our network of favored charities." :-)

[dr-scott.livejournal.com]

Certainly if you're spending every last cent of your income and there's no better way to contribute, pitching in is an option.

And aren't we all whores? :-)

The question is, are you a good whore? Do you give value for what you receive?

[dr-scott.livejournal.com]

33% or less is not bad as a guideline. As others point out, there are collateral benefits: if the cause really needs publicizing, some of the event costs are really doing good. To the extent the particpants are receiving the benefits (aspirational, vacational...) of a costly enterprise (sag wagons, medical care, accommodations...) they should do the financing if they can afford it. The abuse of personal relationships is problematic.

[dr-scott.livejournal.com]

Of course you're right. When a cause needs publicity, the expenditure on the event comes back in free media exposure. BUT many of these things are perennial and now have little need for more exposure; like I resent all advertising I've already seen, I resent having to hear about the same events over and over and over. Ritual no longer has meaning. And if I choose not to encourage even more of these events to occur by minimizing my support, it's to up the informational content of my environment. Institutions like this suck up resources needed by less popular efforts that are more targeted.

Expansiveness / cat food; point well taken. Like most people with my background, my early life was highly resource-constrained, and it's hard to let go of habits of thrift developed then. I think of extravagance as waste leading to loss of freedom.

[dr-scott.livejournal.com]

That's my MO also. I have my charitable goals, I research them and try to make the money count the most. It's an imposition to have friends and business associates pressure me to finance *their* charitable (and ego-satisfaction) goals as well. I'm not saying no one should participate, I'm saying there should be no stigma in *not* participating when you have other plans.

On Giving

[hotelbearsf.livejournal.com]

Good points, Doctor. Here's my two cents.

I've burned out of the pay-for-play parties. You're right - it's all about egos but some of it is good old social climbing as well. Between the two of us we used to average 100 invitations a year. I have gotten our names off most of the lists. You just can't do them all.

When it comes to my own charitable giving, I look at several things; one of the most important is overhead: if the organization's overhead is over 25%, I don't give to it. Period. The other requirement is that I can give to a named fund that takes care of a specific need with all moneys donated used for the need and not for overhead.

I also do a lot of private fundraising. For instance, an independent school I'm very fond of has an enormous scholarship fund; all monies go directly to paying the kids tuition. What I found out was that there were some kids who couldn't afford the books, which run around $1000 per year. I was able to raise the funds and these students now have 75% of their book fees paid. I get the joy out of seeing my funds and the funds raised have a direct benefit.

What people don't realize is that when you die, your IRA is thrown onto your estate and your taxed on that money. Instead, what you can designate where the funds from your IRA are to go upon your death. (Future Endowment). I've divided mine among a couple of organizations with extremely specific instructions.

And last but not least, helping out someone you care about is the greatest pleasure and gift of all.

Re: On Giving

[frstythesnowman.livejournal.com]

My brother now has a job at a fund raising company. With a Master's degree in English... he felt he was unmarketable in N/A. So he took one of the most thankless jobs ever. Phone solicitor for charities. Cold calls.

He's now a manager there. He's happy with his job.

His company raises money for charities that either don't want to do it themselves or who feel overwhelmed.

Pediatric AIDS is one of the hardest to raise money for. People hear the word AIDS and hang up. It's sad really.

So, my own family is benefiting from private fund raising.

Myself, I want to make donations where I don't get something. I want to place it in the agency myself... I distrust phone solicitors because you don't actually know if the money will go to the charity. Could just be a phone scammer looking to collect credit card info from the unwary.