(This article is outside of the usual topics for this site, but I couldn’t pass up the opportunity to do a little educating around this topic.)

Unless you’ve been completely off-grid for the last few weeks, you’re probably at least passingly familiar with the ice-bucket challenge. There’s an article going around Facebook that critiques ALSA’s budget numbers. The website is called “Ruthless Politics.” Perhaps it should be called “Thoughtless Politics.”

Why? Their critique is full of logical fallacies and rhetorical devices, and sorely lacking in useful information.
Let me explain.

Let’s start out with the numbers themselves. Here’s the chart that is included in the article:

graph

These numbers are correct. It’s not the numbers that are the problem, it’s the author’s analysis. He picks on a few points by making assumptions and leaving out data, and ignores the big picture… Including any actual results obtained through the organization’s work.

There are all sorts of stories here that are not being told by these numbers of by the author’s critique of them.

Why is the research number 27%, and not higher?

We have no idea. Maybe it’s mismanagement, or maybe there aren’t enough scientists with qualified proposals. Why did they include some “travel expenses” and “professional fees” in the research category? Because those expenses were directly tied to the research! There’s no conspiracy here. It costs money to work with researchers and oversee each project, separate from administering the organization as a whole. And all in all, around $500,000 out of $7.2 million is not unreasonable.

Why do they spend so much on education?

The author asserts that this is really money that should be called “fundraising” money. And while it’s true that education often leads to more donors, that’s not what this is about. It’s about compassion, awareness, and inspiration. Education is a public service, and is therefore rightly separated out from the backend fundraising and direct advertising costs. As the ice-bucket challenge has shown us, there are a TON of people who weren’t aware of what ALS is. Sounds to me like there’s a need for education!

And of course the author completely ignores the 19% spent on patient and community services. I don’t know about you, but I’d say supporting current ALS patients is a noble and worthy thing for the ALS Foundation to do.

Put it in context

All in all, a 7% Admin budget and 14% Fundraising budget is pretty damn respectable. Maybe if they spent more on Admin, they’d be able to find more research to fund, or better vet and oversee the research that they’re funding.

Maybe if they spend more on Fundraising (read: advertising and marketing) they’d raise even more money to direct to research and patient support.

Have you ever seen the advertising budgets for companies like Apple and Google? And yet, somehow we don’t hear any shareholders complaining  about it.

My favorite quote from the article: “nearly $4 million goes towards fund raising.  Meaning they spend donation money, in hopes of raising more donations!”

Um, yeah… Do you think that people spontaneously say to themselves “Hey, I feel like searching for a random nonprofit to give to, today!”

Of course they spend money on fundraising. That’s how it works! Ever take a look at the advertising budget of a big company like apple? What portion of the product cost do you think pays for advertising that same product to get you to buy it. It’s huge!

And as for it being donation money, what other money do you think an org like this has?

It’s called leverage.

They spend $3.6 mil a year on fundraising, and bring in something like $29 million, 20.3 of which is donations and bequests. I’d say that’s a damn good return on investment!

Finally, the closing statement makes baseless extrapolations about the amount of the money that will be directed to research this year:

“So while the ALSA brags that they’ve raised $70 million since the inception of the Ice Bucket Challenge the public has a right to know that only around $17.5 million of that money will go towards finding a cure.”

This extrapolation assumes that the pie charts will be the same this year. That’s a completely baseless assumption. This year’s donations will be significantly higher for the ALS foundation. That by no means implies that all expenses will increase equally! If they have a solid admin team, they probably won’t hire any new staff. They almost certainly aren’t going to use these one-time donations to give everyone a raise.

Will the fundraising budget increase? Maybe. Almost certainly not proportionally to the increase in donations. And we’ve already seen that this organization has a record of leveraging that fundraising money well.

And who’s to say that the mix of research, education, and patient services funding will stay the same?

We have no idea. Time will tell, when we get the numbers for the current fiscal year. Until then, I’d love to see someone show the real-world impact of ALSA’s work.

Don’t let the bad apples sour you to whole scene

Are there some nonprofit orgs that have poor fiscal management and/or spend unwisely and/or exorbitantly compensate their Execs? Of course there are. But the numbers in the charts in this article are actually *probably* fantastic, depending on the results that unmentioned in the article.

As someone who has worked at non-profit organizations for the majority of my professional life, it drives me crazy when articles like this spread bad information about “fiscal responsibility” and “quality” of a nonprofit’s work based solely on budget percentages.

I’ll get off my soapbox now, and back to working on my exciting new program. But before we return to our regularly scheduled programming, I’ll leave you with this excellent TED talk.

Watch it. Please.

 

 




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