"Should Not Even Be Considered..."

Richard Steinberg at Indiana University / Purdue University Indianapolis sent me a tremendous collection of various academics' quotations, from a variety of perspectives, on the failings of the "efficiency measure." This from Phyllis Freedman eleven years ago. That not much has changed in eleven years shows just how entrenched the measure has become: 

"In fact, the Cost of Fund Raising ..., along with Program Expenditure Rate, ... should not even be considered by donors when evaluating charities.  In fact, these calculations overlook entirely the real measures of success.  If a soup kitchen can feed fifty additional homeless people a week if it raises more money, although in doing so the cost of fund raising rises to 50%, should those fifty people go hungry so the soup kitchen can meet an arbitrary Cost of Fund Raising standard? Is that a real measure of effectiveness?  Wouldn't the parents of a child with leukemia consider a charity worthy of support if it contributes $10 million dollars a year toward a cure, even though it spends half of every dollar raised to reach that goal?"  

- Freedman, Phyllis.  1997.  "Fundraising Cost Percentages: Do They Really Matter?"  Federation Folio of the National Federation of Nonprofits, Vol. 1 #3, October 1997.  pp. 1-5. 

Dan Pallotta Uncharitable

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