How You Get Cheated
North Shore Animal League president John Stevenson spends more money on animal sheltering, neutering, and adoption promotion than anyone else ever. He spends more, too, to help other animal shelters, through North Shore's Pet Savers Foundation subsidiary. To support $33 million a year in animal rescue work, Stevenson further spends $10 million on fundraisingmore than any other hands-on animal care organization.
Stevenson strongly favors donor accountability and strict public oversight of fundraising, to ensure that charities do the work they claim to be doing. The North Shore and Pet Savers IRS Form 990 filings are among the most detailed of the many we monitor. But, as a nationally respected expert on nonprofit law long before assuming his present post, who spends much commuting time contemplating how to make charities in general more honest, Stevenson admits to being perplexed by donor attitudes. The most important number in the annual ANIMAL PEOPLE charts on animal protection spending, he believes, should be not the percentage of receipts an organization spends to raise more money, but rather the amount of money actually spent to fulfill charitable purposes.
"What does it matter to donors how much we spend on fundraising," he asks, "if we can put another million dollars into it and get back two or three million extra to spend on programs? Even if there is a diminishing rate of returns on additional fundraising expenditure, above a certain level, if your programs are effective, shouldn't you be spending as much as you can to advance them?"
Massachusetts SPCA vice president Carter Luke asked a similar question several years ago concerning salariesin essence, paraphrased, "If we do the job people give us money to do, who cares how much anyone gets paid?"
From the perspective of nonprofit organization heads, spending more money to make money only makes sense. Paying people well to get the job done, at least as the organization perceives the job, may also make sense.
But for six years now, donors have responded to our annual publication of the budgets, assets, and salaries paid by leading animal protection groups with shocked outrage. "I need to know which executives are getting the money I contribute," writes Camilla Adler of Bronxville, New York, speaking for many, "and I need to know more."
It may be that the organizations spending the most on fundraising are able to spend more on programs, though unlike North Shore many do not, and it may be that some highly paid executives justify their salaries, in business terms, by raising more money than anyone else. Business as usual, however, is not what donors expect of charities, which are granted tax exemptions because, presumably, they operate free of self-interest for the public good.
The operative phrase here is not "for the public good," but "free of self-interest." Many and perhaps most people working in for-profit businesses also work essentially for the public good, albeit motivated by self-interest: the builder, the baker, the tofu maker, the doctor, the lawyer, and the chief executives of the corporations providing our food, clothing, and shelter. Providers of information, transportation, health care, and entertainment include a mix of nonprofit and for-profit institutions, often differing from each other only in the degree to which they can attract self-interested investors. Non-profit organizations enjoy special privileges in our tax code not because they uniquely do socially beneficial work, but because they purport to do work from altruistic motives that would otherwise not be done.
When donors contribute to a nonprofit organization, they expect to see altruism in action. If they see self-interest instead, if they see business as usual, they have every reason to begin thinking of nonprofit institutions as businesses like any other, to stop sending gifts and making bequests, and to start demanding the repeal of tax exemptions. Donors also have every reason to become cynical. We're now often hearing two questions that once seemed unthinkableand we're hearing them from longtime stalwarts of animal causes:
* Did major environmental groups actually encourage conflicts leading to the possibility the Endangered Species Act might be dismantled just to have a good fundraising issue? The obtuseness of some groups in steadfastly promoting punitive enforcement instead of incentives for compliance seems otherwise difficult to explain. Certainly the belligerent anti-ESA attitude of much of the present Congress has boosted environmental fundraising out of the prolonged funk that followed Earth Day 1990.
* Are some self-proclaimed humane advocacy groups knowingly promoting policies that perpetuate pet overpopulation, to keep themselves in business? Judging by the peeved response of certain organizations to early neutering, low-cost neutering, mobile clinics, high-volume adoption, off-premise adoptions, neuter/release, breed rescue, feral cat rescue, and the no-kill initiatives of the North Shore Animal League and San Francisco SPCA, continuing years after each tactic has proved itself, and considering those same perpetually nay-saying organizations' emphasis on fundraising, it is hard not to wonder.
Finally, when nonprofit institutions seem to act from self-interest more than altruism, altruists are more easily inspired to form their own institutionsand so are the self-interested, attracted by the prospect of tax-exempt easy money. While the altruists struggle to do a lot with little, fundraising according to need, the self-interested just raise funds fulltime, diverting out of the cause an ever increasing share of the donated resources.
As Mark Twain allegorically predicted in Huckleberry Finn (1884), which appeared at about the same time as organized philanthropy, would-be Kings and Dukes with bogus hard-luck stories steal aid from widows, orphans, victims of injustice (Jim) and abused children (Huck himself), as well as from animals, the favorite cause of the mother of Twain's real-life model for Huck (the son of a freed slave whom Twain remembered in his 1874 sketch Sociable Jimmy). The frauds reassure any who recognize falsehood that their lies told are told, after all, in the interest of encouraging the soul-redeeming faith of the defrauded victims.
When the self-proclaimed Humane Society of the United States can raise funds for 41 years without ever either sharing the wealth with or being accountable to the hands-on humane societies that many donors think HSUS represents, when the so-called American SPCA can do nationwide solicitation while doing no sheltering and little cruelty investigation outside of New York City, and when the equally self-designated National Humane Education Society's educational efforts consist almost entirely of flyers tucked in with direct-mail fundraising appeals, what ethical standard is to discourage an Ann Fields of Love and Care for God's Animalife from not fulfilling her own real and implied promises to donors? When the chief executive of HSUS receives a salary and perquisites comparable to those of the President of the United States, what mores tell an Ann Fields that she isn't to divert donations to enjoy comparable luxury?
Mark Twain saw to it that through Huck's intercession, the King and the Duke were tarred, feathered, and ridden out of town on a rail, while their victims were at least partially recompensed. Ann Fields died at age 49 of a heart attack, perhaps brought on by her own self-indulgencebut her victims won't recover one cent, and her family may continue the questionable practices. We've meanwhile heard from several one-time major donors to Fields who are themselves now indigent, after having given Love and Care and other animal-related non-profits hundreds of thousands of dollars.
Gullible donors are certainly responsible for much misdirection of funding. But that is not to say such donors deserve blame. Donors understandably like to believe there is a care-for-life haven somewhere looking after all homeless animalsand like to believe it so much that many don't ask hard questions. Donors equally understandably like to believe there are simple solutions to complex problems. And donors, fortunately for legitimate charities and the beings they help, like to respond to a sob story by writing a check and feeling better.
Donors are by nature kindly people, who mean well and have difficulty believing that others who claim to feel as they do may be scheming crooks. Many have great difficulty even looking at pictures or written accounts of suffering. They just flip over the form letter, give the amount the "love card" asks for, and rush the check off, hoping to end the misery or at least get it out of their minds.
Of course that isn't what happens. The more checks the donor mails, and the more promptly in response to solicitations, the more solicitations arrive. The donor advances to the "frequent donor" and "high donor" lists: the prime targets. Pitches become more sophisticated. Telemarketing requests join direct mail. On average, about two-thirds of a donation made in response to direct mail actually goes toward programs, but typically only one third of donations to telemarketing go into actual charitable work. The rest finances even more fundraising.
Because there is an inherent upper limit to donors' ability to give, the total amount of money received by charities in a particular field tends to rise to a ceiling and then holds even. Thereafter, charities fight ever harder for shares of that relatively fixed amount. The ceiling in animal protection, in inflation-adjusted dollars, year after year, comes to between 0.9% and 1.1% of all U.S. charitable contributions. Organizations that don't aggressively compete for a share tend to be starved out, rewarding aggressive solicitors at the expense of those who solicit according to need. Over the past six years we've seen several one-time major national animal protection charities virtually disappear, through a variety of circumstances that disrupted fundraising for a year or two, while the gap in wealth between established charities that fundraise as necessary and those of equal age that fundraise at maximum capacity has more than doubled.
The most encouraging sign for the future of animal charity is recent growth in incorporations of local and special-focus groups, mostly engaged in the hands-on work that the majority of nationals long since abandoned as unprofitablein disregard of their implicit mandate to do what is unprofitable, if they are to be tax-exempt. If local and special-focus groups only compete with each other for funding, of course, the poor will continue to struggle as the rich get richer; but if they compete successfully for the funding that ineffective and wasteful nationals currently suck out of their respective communities, much more can be done with the limited donor dollars.
First, though, donors must learn to give with deliberation. Compile a list of which charities you support from a year's worth of bank records, and tally up how much you've given to each. Most animal protection donors we know who have undertaken this exercise have been shocked to see how far their actual patterns of giving are from their intentions. Most find themselves unwittingly rewarding those who send the most frequent solicitations with by far the most money, even if all the individual gifts are small. Most are also surprised to find out how much money they are givingand how little of the total actually goes to the charities they most like. Often donors tell us that the mere exercise of listing their donations inspires resolve to change their donation patterns, because they have discovered for themselves how certain organizations' appeals deceive them.
Whatever your animal protection goals, your beliefs about tactics, and your philosophy about how humans and animals should relate, you can only help the cause by tempering impulsive generosity with deliberation. Be generous; give more if you can; but make sure you're truly rewarding the conduct you wish to encourage.