tag:blogger.com,1999:blog-3614581.post3268579388643143377..comments2024-03-28T03:11:22.839-07:00Comments on PHILANTHROPY 2173: What does transparency look like?Lucy Bernholzhttp://www.blogger.com/profile/09253941214286179394noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-3614581.post-83759049058590657872008-01-21T13:16:00.000-08:002008-01-21T13:16:00.000-08:00I feel compelled to reply to the article posted he...I feel compelled to reply to the article posted here as a comment.<BR/><BR/>David Baines, the writer of this article called me on Friday morning to let me know he was writing a<BR/>piece in his Saturday editorial. Armed with our 2005 and 2006 annual<BR/>reports we file with Canadian Revenue Agency, he recites publicly<BR/>available numbers namely that we received $234,632 in tax-receipted<BR/>donations (which are largely donations we received through our website for the projects on GiveMeaning.com) and another $730,350 from charitable foundations to pay GiveMeaning's administrative costs in<BR/>operating the website in Canada.<BR/><BR/>He specifically states that I "refused to identify any of these<BR/>donors" when in fact, I offered for him to speak with some of<BR/>GiveMeaning Foundation's donors and yet he didn't take me up on this.<BR/><BR/>I find it odd that Baines appeared to rush to publish this article,<BR/>calling me for the first time the day before the article was supposed<BR/>to run.<BR/><BR/>Nevertheless, his main contention is that GiveMeaning Foundation has<BR/>spent more money building the GiveMeaning brand and service than it has raised money for its projects. This is not only not in dispute but not surprising to anyone that knows anything about a start-up business. GiveMeaning launched its re-vamped website in late September of 05. Prior to that, our web presence was in Beta and very little transactions flowed through. The numbers that Baines is reporting on is our first full year of collecting tax-receipted<BR/>donations in Canada for the GiveMeaning website. Given that our average donation through the website is about $40, our first-year tally of money raised for projects is not surprising. It's also not surprising to anyone that understands the nature of a start-up that in the first few years of operation that start-up costs will exceed revenues. It took eBay eight years to make a profit.<BR/><BR/>Baines can't understand "why certain undisclosed charities would give money to pay overhead for what is essentially a charitable conduit."<BR/><BR/>Foundations are investing in GiveMeaning because they recognize that the GiveMeaning service is helping charities of all sizes make<BR/>fundraising easier and less costly. <BR/><BR/>By supporting our work at<BR/>GiveMeaning, they are providing an infrastructure for all charities to<BR/>use. He seems unaware that foundations regularly make grants to other foundations for capacity and infrastructure costs.<BR/><BR/>Of course I draw a salary and yes, my wife works as a contractor for<BR/>GiveMeaning. Baines seems to think that GiveMeaning should run<BR/>without staff and expense and that it's wrong for charitable<BR/>foundations to provide GiveMeaning with the financial resources to<BR/>build its service, a service used by charities of all sizes.<BR/><BR/>Baines seems unable to draw distinction between money raised through the GiveMeaning.com website for projects and money raised separately from donors who support our admin costs. When he says "Williams insists that, whenever a person gives money for a particular charity, 100 per of that money gets to the named beneficiary. That may be true, but it does not mitigate the fact that the vast majority of the overall money collected during 2006 went to administration." By<BR/>lumping together these two costs as one, he is ignoring the simple<BR/>fact that the donors giving to our administrative costs are doing so<BR/>specifically FOR our administrative costs and that donors giving<BR/>through the website for projects have 100% of their funds passed on<BR/>the Implementing Organization responsible for carrying-out that<BR/>project.<BR/><BR/>It can't be laid out more clearly than what we have in our About Us<BR/>section which reads "We charge nothing for donations collected online and even cover the credit card costs associated with each donation. We rely on the support of generous donors and advertisers to provide this service."<BR/><BR/>Baines leaves readers with his own judgement on what is or isn't<BR/>philanthropy, passing judgement on a fantastic grassroots economic<BR/>development initiative out of Uganda which trains Ugandan people to build guitars and then sells those guitars in North America to create self-sustaining, economic development and on Wild ARC, which is the division of the BC SPCA that provides rehabilitation and care to<BR/>injured animals. Baines doesn't think Sea Otters and poor Ugandan<BR/>people fall into the class of "quality charities." He's entitled to his opinion but the whole point of GiveMeaning is to give grassroots initiatives an opportunity to find their audiences as we believe that any charitable initiative deserves to have the opportunity to better find and connect with supporters who care about those causes.<BR/><BR/>Baines' final point sums it up nicely. He says that "we have a<BR/>responsibility to scrutinize all charitable endeavours to ensure that we are getting decent value for our dollar." He clearly doesn't think that GiveMeaning's service is needed, valuable or useful to the charities and donors we serve. And that spending money on a new way of fixing a big problem is not warranted. He's entitled to his opinion.Tom Williamshttps://www.blogger.com/profile/07446421330879259637noreply@blogger.comtag:blogger.com,1999:blog-3614581.post-90627818391111474552008-01-21T11:37:00.000-08:002008-01-21T11:37:00.000-08:00- Would it make foundations more transparent? Perh...- Would it make foundations more transparent? Perhaps if it was mandated. Maybe community foundations would be a good place to start.<BR/><BR/>- Would it backfire - and make them less transparent? Backfire- not if mandated. Make them less transparent – you will have a majority would see the value. There’d always be the few small minded folks that would run the other way and close off everything. Education helps these types and it takes a while to get through. <BR/><BR/>- Is any one source of information going to change the way any one person does anything, thinks anything, or takes action? NO, not really. Unless it is mandated from an entity (governing body) that makes it a requirement. There’s always the ones that jump on board a new wave, some that lurk a while with suspicion – the cautious type. Others that are just plain stubborn, turf protectors.<BR/><BR/>- Transparency about what and for what purpose? Transparency about anything about foundations --- I know this is broad but a nonprofit may want information that is different than what a researcher/academic would be interested in. Information for those groups that find the information important, necessary, relevant to their work, research, etc…. Ex. Nonprofits, research, rags, consultants, community assessments, etc..<BR/><BR/>- Information and data provided by and analyzed by whom and for whom? Provided by --- Hmmm… perhaps a think tank type of entity. For anyone for any reason/interest in foundation/philanthropy. Maybe a few BIG Foundations could invest over a 5 year period to fund start up for this sort of thing. Good way to leverage knowledge, assets, investment.<BR/><BR/>- What other sources of information are there, and how will more or different information add to, distract from, or shift perspective on what is already available. Sources of info --- don’t RAG’s have good info too? There will always be information that is relevant or non-relevant to someone or something. It just depends on why someone needs it.<BR/><BR/>- Maggie F Keenan, Ed.D.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3614581.post-1658714585507720272008-01-20T20:40:00.000-08:002008-01-20T20:40:00.000-08:00Transparency is an issue highlighted by a story pu...Transparency is an issue highlighted by a story published just this weekend by The Vancouver Sun newspaper - examining a scheme operating in the U.S. and Canada at present:<BR/><BR/>http://www.canada.com/vancouversun/news/business/story.html?id=b76ff000-c8e8-4789-9ed8-806df2c2945a<BR/><BR/>During the year ending Sept. 30, 2006, GiveMeaning received $234,643 in donations for which it gave tax receipts, according to a financial statement filed with Canada Revenue Agency. Tom Williams said these are largely donations from individuals.<BR/><BR/>It received another $730,350 from other registered charities. Williams said these donations were made specifically to pay GiveMeaning's overhead.<BR/><BR/>He refused to identify any of these donors. I found this strange: My sense is that, while some donors request anonymity, most registered charities or foundations publicly report where they are placing their money, not so much for recognition as for transparency.<BR/><BR/>More generally, I do not understand why certain undisclosed charities would give money to pay overhead for what is essentially a charitable conduit.<BR/><BR/>In the case of GiveMeaning, that overhead is disproportionately large. Of the $982,705 in total donations it received (and issued tax receipts for), GiveMeaning spent $666,070, or 68 per cent, on administrative expenses.<BR/><BR/>Those expenses included $199,043 for professional and consulting fees; $153,646 for salaries, wages and benefits; $28,433 for advertising and promotion; and $24,019 for travel.<BR/><BR/>I asked Williams whether he receives a salary. Well, yes, $90,000 per year. And his wife, country singer Jessie Farrell, who works part-time for the foundation "when she can," gets $30,000. So together they collect $120,000 per year, plus expenses.<BR/><BR/>After subtracting overhead costs, just over $300,000 was available for charitable purposes in 2006, but only $172,000 was actually given to charities (the remainder is still on the foundation's books). That $172,000 represents just 17.5 per cent of total donations.<BR/><BR/>But that's not the end of it. Many of the charities that receive money have their own overhead. So the net amount available for true charitable purposes is even less.<BR/><BR/>Williams insists that, whenever a person gives money for a particular charity, 100 per of that money gets to the named beneficiary. That may be true, but it does not mitigate the fact that the vast majority of the overall money collected during 2006 went to administration.<BR/><BR/>Williams says this was due largely to start-up costs: "Yes, we have spent more than we have given away. Just like any other start-up business, it takes time to get profitable," he said.<BR/><BR/>He said the financial return for the year ending Sept. 30, 2007, which is just now being filed, will show a greater percentage of overall donations going to charity. We shall see.<BR/><BR/><BR/>The Vancouver Sun January 19, 2008Brian Hauff Historyhttps://www.blogger.com/profile/09077708168314584062noreply@blogger.comtag:blogger.com,1999:blog-3614581.post-33805826125378495382008-01-20T13:52:00.000-08:002008-01-20T13:52:00.000-08:00ConchesThanks for this post. I went over to your b...Conches<BR/><BR/>Thanks for this post. I went over to your blog to check out your "new lens" - and want to encourage others to do the same. There is a lot there to think about - which I will do and hope to write more about. I agree with you that financial markets have are limited and limiting - but in my years of thinking about them, and about philanthropy as industry, they have proven to be (for me) the most complete and provocative metaphor. What does get lost is their shortcomings - and so other lenses, other frames are very much needed. <BR/>Thanks<BR/>LucyLucy Bernholzhttps://www.blogger.com/profile/09253941214286179394noreply@blogger.comtag:blogger.com,1999:blog-3614581.post-89469615178432299512008-01-20T09:54:00.000-08:002008-01-20T09:54:00.000-08:00As an employee at the salesforce.com foundation, I...As an employee at the salesforce.com foundation, I have been thinking about this topic a lot recently (http://www.conches.org/2008/01/impact-measurem.html). Transparency is critical, in my mind, to attach foundations to the end game, a just and equitable world without suffering. Open information platforms are always a good idea. As you have written iun the past, the idea of a philanthropy marketplace has a lot of buzz these days. Personally, I have very little trust in the marketplace as metaphor because of the reflex to devolve into consumerism as opposed to collaboration and aggregation. However, the mechanisms of a marketplace may be applicable, and more information about the philanthropists role is certainly valuable.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3614581.post-18402841401505257252008-01-20T07:58:00.000-08:002008-01-20T07:58:00.000-08:00Great perspective Lucy. It seems to me that there ...Great perspective Lucy. It seems to me that there could be business models that would support something like TheFunded for foundations. I would guess that many, many nonprofit employees would enjoy visiting the site and adding their rankings. An anonymous message board or discussion thread where nonprofits were encouraged to share their foundation stories would be sure to be a hit.<BR/><BR/>A site like that could be created on a tiny budget by one or two people with some decent web skills. Google ads would seem to provide at lease some basic revenue and I'm sure other revenue streams could be identified.<BR/><BR/>I think a site like the Funded would attract a lot of nasty, unproductive comments and I'm not sure I'd support the creation of such a site. But my point is that it does seem to me that for-profit sites have a place in the growing infrastructure.Sean Stannard-Stocktonhttps://www.blogger.com/profile/07403925570833037540noreply@blogger.com