Social Good Gone Bad – How to Protect Yourself from So-Called “Charities”

This week, Account Director Jillian Wilson-Martin and Assistant Account Executive Ivellisse Morales from our Social Impact team discuss how to protect your charitable dollars from so-called “charities” that claim to do good, but really pocket your donations as profits.

You’ve got to spend money to make money. It’s a basic business principle. But through the lens of a nonprofit, you’re expected to spend the minimum to raise the maximum, while also effortlessly delivering social impact.

Talk about high expectations.

In a recent Ted talk, fundraiser extraordinaire Dan Pallotta argued nonprofits should have the same flexibility to spend on overhead expenses as corporations in order to achieve world-changing scale in social impact. But how much is too much? The recent investigation of America’s 50 worst charities, discovered by the Tampa Bay Times and the Center for Investigative Reporting, shined a less-than-flattering light on a group of charities that spend less than four percent of donations raised on impact. A margin of four cents on every dollar may work for business, but it defies the very purpose of these nonprofits’ existence.

So what’s a reasonable way to evaluate a nonprofit the next time you decide to give? Whether you’re a corporation, foundation or a consumer, follow these five guidelines to avoid being “duped for good.”

1.    Do a gut check. The first step is to evaluate how the nonprofit positions itself as well as its mission, programs and services. Make sure to thoroughly read the website and to check out its social media properties. Are you passionate about the organization’s mission? Do you agree with its approach? Are there other organizations that fight for the same cause, but better? Try to see through the smoke and mirrors and make sure the organization aligns with your personal values or brand.

To read more on Cone's Prove Your Purpose blog, please click here.