Charities Need to Come Clean on Fundraising Costs

According to a recent article in the Chronicle of Philanthropy, more than one-fourth of charities that received $500,000 or more in gifts reported spending nothing on fundraising.

That’s right, nothing. Nada.

While there are lots of folks who would like to think that all these charities are just remarkably efficient, those of us who are in the fundraising profession know the real reason is because charities are under tremendous pressure to under-report their fundraising costs.

I find this fact disturbing for two reasons. One is obvious—that by misrepresenting information on a legal document such as this, the charities are opening themselves up to potentially severe penalties and public loss of confidence.

The second reason is more subtle, but nevertheless important. By under-reporting fundraising costs, they are perpetuating the …