March 4, 2016 3:08 pm at 3:08 pm #617354
I’m often disappointed when I see tzedakose where more than 50 cents of every dollar goes to pay for overhead — staff, advertising, prizes, etc. Why not support organizations that will use all donated money, or almost all of it, to help the poor and needy, families that desperately need it? Why should we support organizations that spend more than half of it on shtick? Is it fair to count that towards maaser money, if most of it does not help the truly needy?March 4, 2016 4:15 pm at 4:15 pm #1141380
To readers — does this issue impact how much you give to a certain tzedakah? Before giving, do you want to know how much of every dollar goes to actually help needy people?March 4, 2016 5:05 pm at 5:05 pm #1141381
You cant run a Charity giving 100% of the funds to the tzdekah. You need to have things like office space, Phones, Electric bills, Office supplies and frankly volunteers can be hard to come by so you need workers that you have to payMarch 4, 2016 5:08 pm at 5:08 pm #1141382
for over 20 years my mother ran a charity that gave 100% of the funds to tzedaka.March 4, 2016 5:22 pm at 5:22 pm #1141383
SY What kind of charity is it?
And you also need liability insurance, A simple example Hatzolah is on a call and accidently hits another car unrelated to the call. They are liable for the damage to the car unrelated to the callMarch 4, 2016 6:02 pm at 6:02 pm #1141384
She worked in an agency that provided services to the community based on financial need. Through that, she and another baal chesed and a local Rav kept bumping in to people who where in desperate need, often for temporary reasons, but didn’t qualify financially. They had “too much income”.
The three got together and established a fund. They accepted donations and handed out cash. It was all done on the books and the accountant was another baal chesed in the community.
They distibuted food monthly and money for bills as needed. Tens of thousands, then hundreds of thousands. The once a year mailing to the community was done on paper and envelopes and stamps donated by friends.
Every penny went to tzedaka. And much of the volunteer work for packing and deliveries was done by gvirim and recipients who were happy to give back.March 4, 2016 6:21 pm at 6:21 pm #1141385
I understand that tzedakose often need to cover overhead, and I’m perfectly comfortable donating to such places, even if not 100% of every dollar goes to help the poor. But I think we should distinguish between organizations where overhead is 5 or 10%, maybe even a bit higher, and organizations in which it’s over 50%. I hope that even zahavasdad will agree that such a distinction is reasonable. There is at least one organization — and it regularly advertises on this site — that spends over 50 cents of every dollar on overhead (employees, advertising, prizes, etc) according to their published 990’s, available on sites such as charitynavigator. Of course people working there need to make a parnassah, and of course these mega-raffles end up bringing them more money to help people. But in my mind that’s difficult to justify as wholesome honest tzedakah.March 4, 2016 6:33 pm at 6:33 pm #1141386
If it is of interest, I just checked their 990 from 2014. According to what they told the IRS, they received $34,756,266 in contributions and grants. Salaries etc made up $2,455,991, and other expenses accounted for $14,604,409. Of the almost $35 million raised, $13,780,339 was disbursed. In short, 7 pennies of every dollar went to pay salaries, and another 42 cents was used to pay for office space, advertising, prizes, and other shtick. In the end, under 40 cents per dollar went to actually help people. The numbers were only slightly happier the year before. Is this really honest tzedakah?March 4, 2016 6:53 pm at 6:53 pm #1141387
What you dont know is how much more funds fundraising brought in. Say you spent $1 for fundraising, but got $5 in return, thats a good deal. Fundraising is not so easy and you really have to spend money to get money.
Its not what I personally think, Its the reality of today
Would anyone have ever heard of Kars-4-Kids if they didnt spend so much on advertising?March 4, 2016 7:04 pm at 7:04 pm #1141388
sometimes i wonder if it is better to stay small and let 90-100% go direct. have 10 small organizations with little overhead instead of one or two (in that area) with 35% going out.
I know what i would do with just the money spent on printing. but then again the printing is sometimes donated or sponsored. i think that really there are so many variables and specifics that it isn’t even possible to tell from a numbers sheet.March 4, 2016 7:08 pm at 7:08 pm #1141389
take the car example. I know people who have gotten donated cars. usually they are cars that someone else is totally done with. it costs hundreds to transfer title, and, of those who I know, the cars required hundreds of dollars in repairs right away, with thousands over the next years. and then they couldnt afford it but couldnt ask for financial help to get another, functional, less costly car because they had already accepted a *free* one.
its really hard to know anything from the outside.March 4, 2016 7:11 pm at 7:11 pm #1141390
zahavasdad — of course you’re right. These people know that if they spend $15,000,000 on advertising, prizes, and other shtick, they can raise $30,000,000, netting way more than if they spent only $1,000 or $1,000,000. I don’t blame these people at all, clearly it works for them which is why they’re doing it.
But now think about all of the waste — $15,000,000 is not going to help people. If they spent $75 million to make $100 million, thus netting even more, would that be an even better idea?
Of every dollar that you give them, less than 40 cents actually directly helps people. Do you count money that you give to this towards your maaser? or do you count only $40 of every $100 contribution? Do you think that this is a yashar way of raising money, when so much is being wasted, even if the idea is that it brings in more?March 7, 2016 5:48 pm at 5:48 pm #1141391
For those seeing this post for the first time, do you contribute tzedakah to organizations that spend over 50% of contributions on overhead? Also, do you ever think about relative “quality” or “honesty” of some tzedakose over other ones in determining how much to give to one place over another?March 7, 2016 6:13 pm at 6:13 pm #1141392catch yourselfParticipant
The fact is that were it not for the money spent on advertising, they would not be able to function at the level, or with the scope, that they do. As such, I think that advertising expenses are very difficult to divorce from operating expenses. The work that they do (i.e., the money spent “actually helping people”) is qualitatively different as a result of the money they spend on advertising. I do not consider the advertising money as having been “wasted”. On the contrary, it is an important part of their charitable activities.
The question is not whether it is worth spending 48 cents of every dollar on advertising to facilitate 42 cents of operation; the question is whether the operations of the specific charity are worth $34M.March 7, 2016 6:29 pm at 6:29 pm #1141393
Apparently you do not really understand the information in the 990.
Look at page 10 of the 990, you should note that total expenses for the year was $30,841,000, of which $19,482,000 was spent on the programs which is 63%, just a bit lower than the BBB standard of 65%. The management and general (what you call your “overhead”) was $1,441,000 which is 4%. Very low.
The funds spent advertising for cars directly result in the donations. These are resources that they would not have from anywhere else and likely would not have been benefitting anyone. Those could hardly be considered part of overhead.
Anyone who is familiar with car donation programs knows that they are expensive to get and you cant compare to other fundraising.
However, there are many of the national charities that use “fund raising” professional agencies that retain 90% of the funds they raise. This is nowhere near that.
Your percentages about what goes to help people does not even match the source of where you are getting information from (They do notch the information in the 990. You are taking unlike numbers). Yours is just made up bad math.
Further, you seem to think that they agency must spend every dollar they raise during the period they raise it. Without putting any aside4 to maintain the viability of the agency, which is just imprudent.
And as far as spending $1 to make $3, would you be happier if that was an investment? Not for profits can have investments. All the larger have investments and endowments.. In fact, for large universities, that is actually the largest part of their activities. (See Harvard or Yale)Then it would be an unbelievable return.March 8, 2016 5:23 pm at 5:23 pm #1141394
To nishtdayngesheft — I am not a tax professional and may have misunderstood what I read in the 990 I found online.
Of course it is reasonable for a tzedakah to not spend every nickel they receive, so they can maintain their long-term viability. That does not bother me at all. The number I understood for salaries ($2,455,991) was what I saw on Part I line 15, under “Salaries, other compensation, employee benefits”.
You wrote that $19,482,000 was spent on programs, which I see detailed clearly on page 10 of the 990 as you mentioned. But I also see that 25% of that ($4,887,671) was itself spent on “Advertising and promotion”, all in addition to $9,048,707 spent as “Advertising and promotion” under the “Fundraising expenses” column. I’m not a baki in BBB recommended practices, in tax law, etc, but I can understand from this form that nearly $14 million was spent on “Advertising and promotion”.
Look, I have no doubts about the sincerity of the people involved in this organization and their commitment to helping others. And chalilah vchalilah I am not suggesting that anything untoward is going on inside the organization, in what it does, or its accounting practices. Thank you for the important work you do and the many people you help. I can also understand that large budgets for advertising etc are necessary to raise large amounts of money for the avodas hakdosh you do.
I am only asking whether when they give tzedakah, people think about what fraction of their contributions go directly towards helping other people, and what fraction goes for other *legitimate* expenses. To suggest a point of contrast, when I give my rov tzedakah for aniyim, then I know that every nickel I give goes into the pocket of a poor family having trouble putting food on the table or paying for their electricity. Not 48 cents, not 75 cents, not even 95 cents, but every single penny. Not a dime goes to pay for advertising, for a prize, or even for a meshulach’s airfare. 100% of it is going to poor people. When I send the Mir Yeshiva a check, I know that every nickel will go directly towards supporting lomdei torah, be it talmidim, the rebbeim, the cleaning staff, pay for utilities, etc. Is this a question that people consider? Do people think about this when considering what fraction of what they donate counts towards ma’aser? Perhaps the answer should be 100%, but I don’t think that’s obvious.March 8, 2016 5:35 pm at 5:35 pm #1141395
When you give Mir a donation, why wouldn’t you think a percent goes to cover the expenses of their fundraisers costs (travel, telephone calls, etc.)?March 8, 2016 5:37 pm at 5:37 pm #1141396
Most organizations have paid staff that arent directly related to the organzation, Like a Yeshivas has office workers, clerical workers and some have R’L “FUND RAISERS” people whose jobs it is to raise funds
Do you think if you go to a dinner 100% of the money go to the organization. They have to pay for the food, room rental, The Journal etc
The more you need to collect, the harder it gets and the more expensive it is.
Raising $10 isnt that difficult and raising $100 isnt that difficult, but raising $10,000 is harder you need time and maybe money to do so.
I do have problems with the charity we are discussing here for various reasons not for this discussion, but they raised $34 Million. That is quite hard to do, You need to pay to get this.
Is anyone going to seriously poskin that if you give money to a yeshiva, you only get tzedkah credit if the money goes to learning, but you dont get credit if the money is used to pay the secretary who answers the phone or the desks in the officesMarch 8, 2016 5:49 pm at 5:49 pm #1141397
Joseph — I guess you’re right, I didn’t think so much about that. Well, I still prefer to give to the yeshiva directly than to a meshulach, so that more of the donation goes to the yeshiva (no meshulach would get a cut). Same reason I prefer to use check than credit card when I can to tzedakose, so the tzedakah receives more.
Actually, Joseph’s question makes me wonder — what fraction of a place like the Mir’s expenses go to fundraising costs. Is it 5%? 25% 50%? I imagine it’s on the relatively low side, and would be disappointed if I heard it was even 20% or 30% of the overall budget.
I think in the ideal world, the Mir and other tzedakose would not need to spend any money on travel, phone calls, etc, and people would send in the same amount, and the yeshiva would end up in a much better state. I imagine if there something of a “ceasefire” and all yeshivas/kiruv organizations/etc agreed to limit their spending to X, then we’d end up with much less waste. Or maybe that’s wishful thinking?March 8, 2016 5:55 pm at 5:55 pm #1141398
I think they’re competing with donors for money a lot more than they’re competing with each other, unfortunately.March 8, 2016 5:56 pm at 5:56 pm #1141399
zahavasdad — I don’t love dinners, etc, either for the same reason — so much waste — food that’s often not great, journals no one will look at (there are costs in layout, editing, printing), parking at a hotel no one wants to drive to. If a yeshiva, tzedakah, etc, said we will not cave in to this mishiga’as, and instead will spend donations on legitimate necessary (staff, seforim, etc), then I would hope that more than enough people would say, wow, this is a quality tzedakah to which I would love to give. Perhaps some “advertisement” could still be done. When the R”Y is American for a wedding, for example, perhaps an alum will host a parlor meeting or shiur. This would be a tovah of the alum, the R”Y of course isn’t taking money for it, and gvirim and others can meet the R”Y in a respectful manner, and give to a good cause that makes excellent use of all contributions.March 8, 2016 6:01 pm at 6:01 pm #1141400
The reason that isn’t done is because it doesn’t usually work.March 8, 2016 6:02 pm at 6:02 pm #1141401
1) You seem to infer that salaries are not an appropriate expense for an organization, why would that be? Doesn’t the Mir have to pay its Rabbeim? And the executive Director and the remainder of the office staff?
2)Program expenses means that is what is spent on program, the purposes of the organization. A program of an organization is not going to be only giving out money unless they are solely a grant making organization. And even then it is likely that there will be salaries and related expenses that are deemed programmatic.
3) I don’t know the details of the marketing included in program, however it is pretty clear that an outreach organization would have marketing as part of their program. There would also be other educational outreach that would be communicated via programmatic marketing. I know I’ve seen many informational articles on general child raring information and car safety distributed by K4K.
4) When you make general donations, you are not making them to K4K, that organization does their fundraising almost solely through vehicle and other non cash contributions. They are asking for the car you were disposing of (anyway) they are not asking for your cash. Nor are they holding a Chinese auction of any sort. That is a different organization. As noted before, the inherent cost of acquiring such donations is high, but it is tied directly to advertising.
5) To reiterate, the organization you would be donating to would not be the organization that you fear is spending so much of what it raises to obtain the funds. And the programmatic percentage of even K4K was 63% in 2014, just shy of the BBB’s general 65% for all charities, even those that would seem to really have no meaningful overhead.
6) The fundraisers that go out for many organizations get a much higher cut than 35% of what they collect. Your suggesting that this would be indicative of a “not honest” tzedakah is unfounded. They, unlike many other organizations, undergo annual audits and report their activities. V’dal.March 8, 2016 6:03 pm at 6:03 pm #1141402
I think many people give more when they’re reminded with calls, letters, visits, etc. Even advertising (with its associated costs) gets people to donate when they otherwise probably would not have. That’s the reality. In prewar Europe the Roshei Yeshivos and Rebbes also traveled within Europe and beyond (America, etc.) to raise funds for the Yeshiva. The travelling back then cost them money too.
Of course your point what percent of the raised funds go towards fundraising costs is a very relevant and pertinent question about whether it is reasonable. 10% most people might agree is reasonable. 50% most people probably agree is unreasonable and too much.
I recall a story from prewar Europe where one of the major Rosh Yeshivas went fundraising. He came to a gvir’s home to solicit tzedakah for the yeshiva. The gvir said how do I know my donation won’t go towards the costs of your travelling rather than towards paying for the Limud Torah. The Rosh Yeshiva gave him a good answer, though I forgot what it was (as well as which RY it was.)March 8, 2016 6:06 pm at 6:06 pm #1141403
I think it’s also worth noting that a great deal of the money which you see as “wasted” is actually going back to the community. The meshulach you mentioned is but one example.March 8, 2016 6:12 pm at 6:12 pm #1141404
I’m ok with the idea that wasting/spending large sums of money is necessary to raise even bigger sums of money. But that doesn’t mean I want to be part of it. And I wonder whether people think about this issue before deciding on where to give. Personally I would much rather give to people and places so that as much of my donation goes to people that need it most. Wouldn’t $35 million spent directly on poor people, for example, go much further than $35 million minus tens of millions of overhead expenses, with then only half left to help people?March 8, 2016 6:16 pm at 6:16 pm #1141405
I think it’s also worth noting that a great deal of the money which you see as “wasted” is actually going back to the community
Many people actually have parnassah from this waste. The caterer , the printer . The Hall that is rented (If its a Jewish place) so its not “Waste”March 8, 2016 6:21 pm at 6:21 pm #1141406
He said part of the ???? ?????? of ????? was allocating the donated gold to the items with a higher level of ????? according to the purity of the intention of the donor.
So too, Hashem arranges that the money given with pure intentions goes directly towards the ???? ?????, and the money given with less pure intentions goes to the horse and wagon.
As I recall, it was R’ Chaim Volozhiner.
Yes, ZD, those are also good examples.March 8, 2016 6:31 pm at 6:31 pm #1141407
TY, DY.March 8, 2016 6:46 pm at 6:46 pm #1141408
To zahavasdad — I hear what you are saying that people are making a parnasah from this. But I’m still not happy about this situation. Suppose you knew that 50% of your donation to yeshivas X was going to the meshulach at your door. Would you still be perfectly ok giving him a donation? It’s going to this good person’s parnassah? I think it would still rub us the wrong way. Supporting the printer and caterer and the hall, etc, are all nice things but not if those expenses are unnecessary in the first place.
In the organization discussed earlier, I doubt that even half of the $14 million dollars spent in advertising goes to employ people in our community. Of course there’s nothing wrong with giving business to people outside our community, but I will still consider that waste as far as tzedakah is concerned.March 8, 2016 6:47 pm at 6:47 pm #1141409
” Wouldn’t $35 million spent directly on poor people, for example, go much further than $35 million minus tens of millions of overhead expenses, with then only half left to help people?”
Your mistake is that you assume that there would be $35,000,000 without the $14,000,000 spent to get it.
Because of the type of donations received, old cars, they would never receive any of it. So the correct way to look at it is sort of cost of goods sold. They have to report both, the funds raised and the costs (including the click through costs which are several dollars a click) at the gross amounts. In the car donation programs the fair way to evaluate would be to report just the net amount raised. There are amounts that are required to be spent because of the copious reporting requirements and the balance was spent for the programs.
You can hardly call the funds spent to directly acquire such donations as wasted. There is very much a direct correlation of what comes in to what is spent.
In short, if they didn’t spend what they did raising the money, they would not have it all. Specifically here where they are converting what would be an unusable commodity into funds they can use to further their programs. Its a true win-win situation.March 8, 2016 7:06 pm at 7:06 pm #1141410
Supporting the printer and caterer and the hall, etc, are all nice things but not if those expenses are unnecessary in the first place.
They need parnassah whether or not the tzedakah’s expenses are necessary.
As explained several times, though, the expenses are necessary.March 8, 2016 9:17 pm at 9:17 pm #1141411
“DaasYochid – They need parnassah whether or not the tzedakah’s expenses are necessary.”
This by itself is not a justification for giving tzedakah somewhere. If a meshulach comes from a yeshiva, and you knew he got a 90% cut, you’d say, sure I’ll give, he needs a parnassah too?March 8, 2016 9:31 pm at 9:31 pm #1141412
You live in a fantasy world, 100% of funds cannot go to the Tzadeak unless its a very small charity with only 1 or 2 people involved, no offices , no phones etcMarch 8, 2016 9:32 pm at 9:32 pm #1141413
This by itself is not a justification for giving tzedakah somewhere.
I didn’t say it was.March 8, 2016 10:08 pm at 10:08 pm #1141414YW Moderator-42Moderator
Overhead costs are part of tzedaka.
If you give $180 to a yeshiva, it might go to pay a kollel check, pay a plumber, or pay for advertising. All these are part of the yeshiva’s expenses and all equally count toward maaser.
Do you then go and ask what the kollel guy and plumber are spending their check on? Groceries, sforim, tuition, bowling? Is your mitzvah of tzedaka any less based on this?
If you believe in the cause then give to it, otherwise don’t. It is not up to you how they spend their money. There are holy people working in their offices who make these decisions. If they can make $1,000 without any overhead, or $3,000 with 50% overhead costs, which should they choose? Is the $1,500 overhead a “waste of money”? Do you realize that that $1,500 is mostly going toward the parnasa of other Jews?March 8, 2016 11:29 pm at 11:29 pm #1141415
At least we agree on this, 42…March 9, 2016 12:19 am at 12:19 am #1141416
” I doubt that even half of the $14 million dollars spent in advertising goes to employ people in our community. “
I wonder what percentage of the car donations coming is from people from our “community”March 9, 2016 12:29 am at 12:29 am #1141417cvParticipant
You live in a fantasy world, 100% of funds cannot go to the Tzadeak unless its a very small charity with only 1 or 2 people involved, no offices , no phones etc
With Verizon for $68.86 a month (tax included) you can make unlimited phone calls to every state in USA + Canada + High Speed Internet. It will cover all day long calls and tons of e-mails. Today big corporations send employees to home offices and cut off corporate expenses on office. I can’t see why someone can’t collect tzedakah from home.March 9, 2016 1:58 am at 1:58 am #1141418CopyMachineParticipant
Let’s look at this from a different angle. Instead of tzedaka, let’s talk tuition collectors.
They’ve got a real nasty rap. Nobody likes them. At least not in the parent body! But you know who loves ’em? The rebbes and teachers that wouldn’t have food to put on their table without the tuition collector bully chasing down the parents…
Yes, there is overhead when it comes to tzedaka. But think of the rebbes and teachers- that overhead is going to feed their kids. These are people we are talking about!
A chesed organization cannot run soley on volunteers round the clock. Every organization needs some kind of paid workers, in order that they CAN devote their time to helping the organization.
A volunteer who has no money can only volunteer for the time it takes to starve…
So, yes, feel good when you give to tzedaka, knowing that even the “overhead” keeps the chesed going!
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