No, they are paying people to make more money with investments or whatever - that's fine, do what you want - the money comes from the investment income, it doesn't matter if it's inhouse or out.
But if you pay people from donations directly then it's not OK to pay a lot.
Are you paying people to get more donations (no good), or are you paying people to make more money in some other way - including by saving you money (...more efficient and effective....), then it's fine.
Basically if by paying people you will end up needing to collect less donations - or you use those more effectively, then I'm fine with it.
But if you pay people to work on methods of getting more donations in the first place, then I'm not OK with it (if it's excessive, more then a few %) - even if it means you have more money in total.
>But if you pay people from donations directly then it's not OK to pay a lot.
Unless the donator is aware of the fact that you are paying your employees with the donations, and choose to give anyway. In fact, most large charities have employees who get paid, usually out of donations :). But you don't make your decision based on their management process, but based on the service they provide you; namely aiding some cause on your behalf.
You don't decide whether or not to buy a burger at McDonald's based on what percentage of your dollar goes to the CEO, but based on the quality of the service they may provide. Same with charities. If a charity can get away with paying exorbitant amounts to their CEO and still be the best value per dollar, people will donate, and it won't be wrong. Maybe the reason they do so well is that they were able to hire great high level management.
However, to convince people that you were going to spend their money one way and then actually spend it another is fraud. If you paid McDonald's for your burger, and they didn't give it to you, you would be within your rights to sue. At the very least you wouldn't go back. So it is with charities.
It is perfectly fine if you feel that a particular charity spends too much on management, and therefore decide not to donate your money to them. I realize that you may have been stating your personal opinion as to how you decide which charities you donate to, and that's fine. But to then claim in newspapers or other places that because they don't match your standards they are objectively evil and should be shut down/boycotted is a completely different thing. I think that is more what the article is about.
But I do actually make my decisions based on their management process. Personally if they spend more than 5-10% of the money on administrative expenses I don't donate. And BTW that cuts out the vast majority of the charities, I think (wild guess) that most spend around 50%, and some as high as 75% (police fraternities for example (again, wild guess)).
The newspaper example, I think, was more a case of the person not being upfront about it.
Also, I personally think that if the charity money did not go to him, it would go somewhere else. So by him consuming 50% of the donations for his own pocket he is reducing the amount of charity money in the world.
Others might disagree and say that if he didn't get the donation, no one would. So you might as well allow him to exist.
If that's your opinion fine. But I feel that even if the second case is the real one I still am not OK with it (but I think the first one is what actually happens).
So as long as the charity compartmentalizes their income into different groups (depending on source) and pay the Porches from one group you're OK with it?
Your line between OK/!OK seems really arbitrary to me.
No, not their income, their output, i.e. expenses.
I'm OK with them spending money to make (i.e. earn) money, or to save money. I'm not OK with them spending money to collect more donations.
For example if you want to hire an expensive but very very good organizer that will save the charity administrative costs greater than it costs to hire the person - no problem.
On the other hand if you want to hire someone who is really good at drumming up support and getting people to donate, that could be a problem, IF they are getting paid a lot. And I don't care that they will bring in more money than it costs to hire them. I'm still not OK with it.
How much is too much? I'd say a few percent - i.e. if it costs more than a few percent to bring in X number of donations, then don't do it. (Or if you do it let people know upfront that XX% of their money is being used to try to get more money.)
That's why I refuse to donate to pretty much any group that calls me. Paying for those calls usually costs around 50% of the money brought in.
There are some cases where the calls are by volunteers, and then it's OK obviously.
Take a raffle for example: some charities will award as prizes 50-80% of the money brought in. Normally I would not be OK with that, except that they are usually upfront about it.
Mass mailing: I don't know how much that costs, but if it costs more than a few percent of the money brought in, don't do it.
A "for-profit charity". That's where someone starts a charity, for the purpose of paying himself a nice salary. Suppose he pays himself 50% of any money brought in.
You might say: well there is still that 50% of the money that does some good, which otherwise would not have happened.
I don't agree.
I think that last case is the example in the article. He says to himself: at least I'm doing some good in the world, so what if I'm making lots. I (and I guess most other people too since he was forced to shut down) don't agree.
But if you pay people from donations directly then it's not OK to pay a lot.
Are you paying people to get more donations (no good), or are you paying people to make more money in some other way - including by saving you money (...more efficient and effective....), then it's fine.
Basically if by paying people you will end up needing to collect less donations - or you use those more effectively, then I'm fine with it.
But if you pay people to work on methods of getting more donations in the first place, then I'm not OK with it (if it's excessive, more then a few %) - even if it means you have more money in total.