"only 8 cents of every dollar shows up as direct aid and grants"
That's an extremely misleading statement. For instance, a food bank giving away food to a pantry does not count as "direct aid and grants" (at least, if they're defining that as "Grants and other assistance to domestic individuals." from the I-990" ). The salary for the warehouse worker operating the food bank is also not counted in that 92%.
Other cherry-picked statements like "32% of donors trust charities less today than they did five years ago" (not giving the percentage that trust charities more, or any other way to contextualize) make it clear that this is just a hit piece.
I don’t even get the point of this site. They say:
> Most of this spending isn’t waste. Hospitals need staff. Universities need facilities. Even small charities need people to run programs. The problem isn’t intent. It’s that the reporting system was designed to satisfy the IRS, not to show donors where their money went.
The complaint seems to be that the form filed with the IRS has the information the IRS is interested in, not the information whoever made the site wants.
The reality is that I know how the places I donate my money and time to use their money because I’m not relying on their IRS filings to get that information. I would suggest others do the same and donate to places where they understand what the org is doing and where the money is going.
Having a detailed and auditable report of how money is being used is really helpful for creating the understanding you are talking about. That is what accounting is for and why it is so essential to modern life.
The site is obviously just an advertisement for a weird camera surveillance system, but the concern about incomplete accounting is very real. In many places one might want to contribute to non-profit efforts, IRS information isn't even available. In my work in Ecuador, I have seen a lot of fraud, and half-baked charities. Some rich NGOs sometimes walk in on some field trip that donors have paid for, make some statements about all they are going to do and disappear without follow-up. Basically they are just tourists on a free vacation taking publicity photos. There is a specific organization that comes down to build environmentally safe toilets. Not only are these built by young middle class volunteers that know nothing about building anything but their CVs, the communities they are helping don't even need new toilets. The building supplies tend to be repurposed after the volunteers are gone, every single year. I'd like to know if I paid for that. There are seeds of merit in the program, but also unnecessary waste.
Despite negative examples, there are many worthy things that are done, and could be done in the region. Northern money can go very far in the areas I work. It can do a lot to not just improve but transform people's lives. So you suggest that an answer to money misuse is to have personal experience with any organization you donate to. How many people who have the money are going to spend any real time in Amazonian Ecuador? They aren't there now. What is going to change? Since there are few people with money who can be personally involved, does that mean that no effort should be made to better people's lives there? Obviously, that is what accounting is for. I think the article is absolutely right about that. I find their solution to be creepy and invasive. Maybe just having better auditing and reporting standards makes more sense than pointing cameras at hospital patients, but what do I know?
In a similar vein if anyone thinks this is an incorrect viewpoint (it’s not):
For every combat soldier in the Pacific Theater in WWII there were roughly 4.3 support soldiers. I don’t think anyone questions the fact you needed all those people for support and not direct action.
Fair point. I updated the article. The 7.7% is the "Grants and other assistance" line on the 990, and it applies to the $500B charitable nonprofit portion, not the full $3T. A food bank distributing food shows up under program expenses, not grants. The original framing was too easy to misread.
The bigger issue is that even the program expenses line doesn't tell you whether the program worked. A food bank spending $2M on operations could be feeding 50,000 people or 5,000. The form doesn't say.
That’s not a misleading statement for what they’re trying to say.
They wouldn’t disagree with what you say. The point they’re making is we don’t know. Maybe 92% of the remaining money is being spent usefully towards programs and 0% as overhead. Or maybe 0% usefully and 92% as overhead.
The IRS disclosure requirements are not sufficient to know. And yet we will give those donating to both organizations the same tax breaks.
The argument is to increase disclosure requirements for organizations through which so much money is passing so that we have a better idea as to how nether those tax breaks we’re giving are actually giving us any value in return.
The problem is there is no guarantee the warehouse worker at a food bank is doing anything of value. So we can’t assume such things are productive without direct evidence.
I think the material point of HN User Yuliyp's comment is that the organization claiming to be providing us with "Charity Sense", for some reason is not providing us all of the data we need to make sense of charities. Even worse, it seems to be deliberately disingenuous in presenting the data it does give us.
At least provide explanations of why certain things are included or excluded from the numbers they're presenting. Why are hospitals and universities lumped in with the food bank in the first place for instance? When you remove them, the numbers and percentages radically change. Not only that, it doesn't feel like the average person sees a food bank and a university, or a hospital, (and certainly not a university hospital), as the same sort of "charity". When you start digging deeper into the numbers, it just looks like they were lumped in to make the less resourced charities like food banks look bad.
Maybe there was some other reason they had for using this amalgamation? But they should be forthcoming with what that reason was.
Looking will blow up too many cushy deals for too much of the Powers That Be. A great deal of it is non-show "chairmanship" jobs for the family and friends of politicians. Legal bribes.
Feeding Our Future was another fine example of the shenanigans that go on in the US. Power Forward Communities was setup with $100 and captured $2 billion in EPA grants; caught while still doing only token work and not yet having been drained into the pockets of the favored. Abundant Blessings in CA was another nest of fraud; in criminal court right now.
Seems like you can't go more than a couple days without another non-profit scam mess hitting headlines.
Can you explain what you're referring to about Power Forward Communities? As far as I can tell it's a network of established non profits like Habitat for Humanity and Rewiring America, it seems they did more than token work in things like electrification before their grant was rescinded.
The actual org itself acts as an umbrella to coordinate work among the participating non-profits.
OK - except I recall a tour of Japanese graduate students at CompuMentor in San Francisco, studying the whole setup.. the reason? there are no "non-profits" in Japan (at that time, still?). CompuMentor was a great example -- both dipping deeply into the tills with special sales and large steady cash flows AND serving a genuinely underserved niche.
Throw-down on some EPA effort As If That Is Typical, is intellectually dishonest. Mitigation and remediation are expensive and take time. And also there is substantial abuse and greenwashing. So you throw out the baby with the bathwater, so to speak.
"Its all a scam" says the barstool attorney, doing nothing.
I recently had to get surgery at a local hospital with a cross on top and named after a saint. As I waited for my appointment, I noticed the walls were covered with quotes from donors. The lady who was working the desk was an unpaid volunteer from a local church. Out of curiosity, I looked up the financials for the hospital and saw that the board of directors and various executives (around 12 people) were pulling in multi-million dollar salaries. Of the $3B they had raked in from donations that year, they allocated around $300M to a program to help the local people in some ambiguous way. No mention of what happened to the remaining donations. The bill for my treatment was $60K, thankfully insurance covered most of it. Rather seems like charity washing an otherwise ordinary corporation including exploiting gullible people for free labor...
No, it's not cheaper than other options. Pretty much market rate healthcare highway robbery. Afaict, they call themselves a charity because of the cross on top of the building. That's it. Their website mumbled something about helping the community with some sort of program with vague handwaving. Maybe an investigative journalist could figure out what they do that's actually charitable, but based on publicly available information, I could not find much. My sense is people just assume they have good intentions because they named themselves after some saint. Just charity vibes.
For anyone even more skeptical of where your money goes when you donate to a nonprofit, there are plenty of resources out there for researching this. CharityNavigator is a popular one, but I donate primarily to GiveWell: https://www.givewell.org
It's a start, but it's woefully inadequate. Just take the ARRL, which is supposed to be a nonprofit organization for ham radio. They waste money on lobbyists working on absolutely pointless endeavors, and achieve nothing. But don't worry, all of the executives are well paid.
I worked with a large number of these so called "legitimate" charities and after what I saw I will never give a penny to any non-profit. You will have far, far more impact figuring out something you care about and directly spending $100 to accomplish that than giving $5000 to any of these organizations.
In what respect did you work with them? What is your main complaint? As far as I know, top GiveWell charities give malaria nets and stuff and it saves lives at fairly efficient rates.
This is getting downvoted, but it's a salient point nowadays.
Who watches the watchers?
Because if it's no one, then all we're doing is vouching for what could easily be scams set up by who knows who to steer our money to dubious organizations for who knows what purpose.
We shouldn't trust the watchers any more than we should trust, say, Feed the Children. Or Medecins Sans Frontiers. All these organizations should be watched in a comprehensive fashion.
Very misleading analysis, the 8% direct grant comes from adding universities, hospitals and non-charities that make up 85% of the denominator. If you account for this using their own numbers, you get about 50% overhead, not 92%
But this just goes to show that we need watching and monitoring infrastructure even for the organizations who claim to be watching and monitoring on our behalf. We have to know who's full of it, and who is acting in a more trustworthy fashion.
What you point out is a huge miss. There is little chance that it wasn't intentional. There should, at minimum, be an explanation presented as to why they did that?
There's a mistake I see in the comments here that "non-profit" = "charity". There are a large collection of non/not for-profits that are not even remotely in the charity business. Some of these companies have long legacies that stretch back to academic labs spun out of major U.S. educational institutions.
I've worked for two such companies in my career (and partnered with a few others) and both of them were really just normal businesses that used their non-profit status as part of their business model. They used that status to position themselves as an objective second party to various governments and businesses and signal trust. They also internally represent themselves as something different from commercial businesses, just with a weird way of mopping up profit at the end of the fiscal year. At one I was a researcher and the other a low-level executive.
At the working level, both paid slightly under comparable jobs in the private sector, were often very top heavy, and spent lavishly on facilities and had large internal R&D programs that often went nowhere but acted like overamped hands-on training programs that expressed themselves in additional expertise they could offer their clients without having to turnover staff.
I often had multiple personal offices, subsidized mid-level restaurant quality lunches, laboratories, assistants, and research budgets stretching into the low millions of dollars. This was in addition to the regular work we were contracted out to do, which was often either direct work on fairly cutting-edge S&T like programs or providing special advisory and expertise services to those same customers.
All of the companies I know in this space are also fairly top-heavy with, executive and administrative pay helps sop up any profit.
The law requires these companies to report quite a bit of information about their financials into the public space every year [1]. Some of the executives make quite extraordinary pay.
yes, what we need is for charities to operate on a quarterly reporting cycle, so that their administrative overhead increase, and (like public companies) they can be myopically focused on short-term performance.
It's truly ridiculous how detached whoever created this LLM-generated website is from the inner workings on non-profits. It's never the case that someone gives a large sum of money to do whatever the fuck you want to do with that money.
They're usually given for a fixed period of time to do something grandiose by the end of it and the NGO has to report how they've spent every cent of it, usually at the end of that grant, but sometimes along the way as well (every X months). Not to the IRS, but to grant-givers.
Readit News
That's an extremely misleading statement. For instance, a food bank giving away food to a pantry does not count as "direct aid and grants" (at least, if they're defining that as "Grants and other assistance to domestic individuals." from the I-990" ). The salary for the warehouse worker operating the food bank is also not counted in that 92%.
Other cherry-picked statements like "32% of donors trust charities less today than they did five years ago" (not giving the percentage that trust charities more, or any other way to contextualize) make it clear that this is just a hit piece.
> Most of this spending isn’t waste. Hospitals need staff. Universities need facilities. Even small charities need people to run programs. The problem isn’t intent. It’s that the reporting system was designed to satisfy the IRS, not to show donors where their money went.
The complaint seems to be that the form filed with the IRS has the information the IRS is interested in, not the information whoever made the site wants.
The reality is that I know how the places I donate my money and time to use their money because I’m not relying on their IRS filings to get that information. I would suggest others do the same and donate to places where they understand what the org is doing and where the money is going.
The site is obviously just an advertisement for a weird camera surveillance system, but the concern about incomplete accounting is very real. In many places one might want to contribute to non-profit efforts, IRS information isn't even available. In my work in Ecuador, I have seen a lot of fraud, and half-baked charities. Some rich NGOs sometimes walk in on some field trip that donors have paid for, make some statements about all they are going to do and disappear without follow-up. Basically they are just tourists on a free vacation taking publicity photos. There is a specific organization that comes down to build environmentally safe toilets. Not only are these built by young middle class volunteers that know nothing about building anything but their CVs, the communities they are helping don't even need new toilets. The building supplies tend to be repurposed after the volunteers are gone, every single year. I'd like to know if I paid for that. There are seeds of merit in the program, but also unnecessary waste.
Despite negative examples, there are many worthy things that are done, and could be done in the region. Northern money can go very far in the areas I work. It can do a lot to not just improve but transform people's lives. So you suggest that an answer to money misuse is to have personal experience with any organization you donate to. How many people who have the money are going to spend any real time in Amazonian Ecuador? They aren't there now. What is going to change? Since there are few people with money who can be personally involved, does that mean that no effort should be made to better people's lives there? Obviously, that is what accounting is for. I think the article is absolutely right about that. I find their solution to be creepy and invasive. Maybe just having better auditing and reporting standards makes more sense than pointing cameras at hospital patients, but what do I know?
For every combat soldier in the Pacific Theater in WWII there were roughly 4.3 support soldiers. I don’t think anyone questions the fact you needed all those people for support and not direct action.
The bigger issue is that even the program expenses line doesn't tell you whether the program worked. A food bank spending $2M on operations could be feeding 50,000 people or 5,000. The form doesn't say.
They wouldn’t disagree with what you say. The point they’re making is we don’t know. Maybe 92% of the remaining money is being spent usefully towards programs and 0% as overhead. Or maybe 0% usefully and 92% as overhead.
The IRS disclosure requirements are not sufficient to know. And yet we will give those donating to both organizations the same tax breaks.
The argument is to increase disclosure requirements for organizations through which so much money is passing so that we have a better idea as to how nether those tax breaks we’re giving are actually giving us any value in return.
At least provide explanations of why certain things are included or excluded from the numbers they're presenting. Why are hospitals and universities lumped in with the food bank in the first place for instance? When you remove them, the numbers and percentages radically change. Not only that, it doesn't feel like the average person sees a food bank and a university, or a hospital, (and certainly not a university hospital), as the same sort of "charity". When you start digging deeper into the numbers, it just looks like they were lumped in to make the less resourced charities like food banks look bad.
Maybe there was some other reason they had for using this amalgamation? But they should be forthcoming with what that reason was.
Looking will blow up too many cushy deals for too much of the Powers That Be. A great deal of it is non-show "chairmanship" jobs for the family and friends of politicians. Legal bribes.
Feeding Our Future was another fine example of the shenanigans that go on in the US. Power Forward Communities was setup with $100 and captured $2 billion in EPA grants; caught while still doing only token work and not yet having been drained into the pockets of the favored. Abundant Blessings in CA was another nest of fraud; in criminal court right now.
Seems like you can't go more than a couple days without another non-profit scam mess hitting headlines.
The actual org itself acts as an umbrella to coordinate work among the participating non-profits.
Throw-down on some EPA effort As If That Is Typical, is intellectually dishonest. Mitigation and remediation are expensive and take time. And also there is substantial abuse and greenwashing. So you throw out the baby with the bathwater, so to speak.
"Its all a scam" says the barstool attorney, doing nothing.
because it cheaper than other options or what?
Deleted Comment
Personally, the more I look into GiveWell the more I think it's an amazing way to donate
Who watches the watchers?
Because if it's no one, then all we're doing is vouching for what could easily be scams set up by who knows who to steer our money to dubious organizations for who knows what purpose.
We shouldn't trust the watchers any more than we should trust, say, Feed the Children. Or Medecins Sans Frontiers. All these organizations should be watched in a comprehensive fashion.
[1] https://charitysense.com/#how-it-works
But this just goes to show that we need watching and monitoring infrastructure even for the organizations who claim to be watching and monitoring on our behalf. We have to know who's full of it, and who is acting in a more trustworthy fashion.
What you point out is a huge miss. There is little chance that it wasn't intentional. There should, at minimum, be an explanation presented as to why they did that?
I've worked for two such companies in my career (and partnered with a few others) and both of them were really just normal businesses that used their non-profit status as part of their business model. They used that status to position themselves as an objective second party to various governments and businesses and signal trust. They also internally represent themselves as something different from commercial businesses, just with a weird way of mopping up profit at the end of the fiscal year. At one I was a researcher and the other a low-level executive.
At the working level, both paid slightly under comparable jobs in the private sector, were often very top heavy, and spent lavishly on facilities and had large internal R&D programs that often went nowhere but acted like overamped hands-on training programs that expressed themselves in additional expertise they could offer their clients without having to turnover staff.
I often had multiple personal offices, subsidized mid-level restaurant quality lunches, laboratories, assistants, and research budgets stretching into the low millions of dollars. This was in addition to the regular work we were contracted out to do, which was often either direct work on fairly cutting-edge S&T like programs or providing special advisory and expertise services to those same customers.
All of the companies I know in this space are also fairly top-heavy with, executive and administrative pay helps sop up any profit.
The law requires these companies to report quite a bit of information about their financials into the public space every year [1]. Some of the executives make quite extraordinary pay.
https://projects.propublica.org/nonprofits/
(which can include golf courses, heh)
The vast majority of non-profits are political and social lobbying efforts. And I don’t think it’s unreasonable to ask them to fill out a form.
They're usually given for a fixed period of time to do something grandiose by the end of it and the NGO has to report how they've spent every cent of it, usually at the end of that grant, but sometimes along the way as well (every X months). Not to the IRS, but to grant-givers.