Tag Archives: accountability

Which nonprofits serving military veterans are worthwhile?

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logoI get asked this question now and again, and I see this question posted in various places:

I want to donate money to help USA military veterans and their families. Which nonprofits are really worthwhile?

Sadly, I have trouble answering the question, because there are just too many news articles about very shady happenings by organizations claiming to help military veterans, such as this story from CNN’s Anderson Cooper, another one from Cooper, this one from the Daily Beast, this one from Veterans Today, and this from the Tampa Bay Times. I also find the TV commercials of several of these organizations emotionally-manipulative, as though donating to their organization proves your patriotism.

I’m not going to name any of the organizations in question, but it’s worth it to click on those previously-mentioned links and see the organization names yourself – some will be very recognizable.

Here are some questions you can use as you look at a web site to help you evaluate an organization that claims to help military veterans and their families:

  • Does this organization have a prominent link right on the home page for veterans or families of such in need of services – a link as prominent as its links for financial donors? If not, then it’s a red flag: how can an organization say it serves veterans or families of such but not have an obvious way for people to seek services? If it does have a link, click on it. Does the organization have just one page that talks about vague benefits – events, discounts, camaraderie, etc. – rather than concrete service information like mental health services / counseling, rehabilitation resources, accommodation adjustments in housing, debt management, help with government paperwork, job re-training, etc.? In short: pretend you are a veteran or family member in need and look at the web site from that perspective, then ask yourself this question: are you able to find information about services you urgently need?
  • Does the organization list its services as, primarily, directing veterans and their families to other agencies to help with health services, rehabilitation, job placement, etc. – or does the organization actually provide those services directly? If the former, your donation might be better going directly to those organizations that actually provide the services, since the organization is just referring people other organizations.
  • Does the organization say, right on the home page, that it involves volunteers? If no, that’s a red flag – why would a nonprofit not involve volunteers? Are they hiding something? If they do have such a link to volunteering information, do volunteers help in direct service, or do volunteers help just with fundraising? If the former, that’s a good sign that this is a legitimate organization, as they have a commitment to members of the public seeing their work firsthand – they value that kind of investment in their work. If the latter, then that’s a red flag: this organization sees volunteers only as fundraisers, as money-makers. There’s nothing wrong with volunteers being fundraisers, but if that’s the ONLY way the organization involves volunteers, it may mean the organization is concerned only with raising large amounts of money.
  • Does the organization provide an accounting of how it spends money, beyond saying, “80% of money raised goes to services”? For instance, what percentage of the organization’s staff is working in direct support to veterans and their families, versus staff working to raise funds, manage volunteers that raise funds, marketing staff, etc.?

Those are my suggestions of questions to ask before you donate financially to an organization that claims to help veterans and their families.

So, can I recommend any organization myself as one I would donate to (and maybe I have donated to)? Yes. I recommend the USO.

Why I’m not outraged at the IRS

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Each year, the IRS reviews as many as 60,000 applications from groups that want to be classified as tax-exempt.

501(c)(4) tax-exempt status is a different nonprofit category than organizations like homeless shelters, arts groups, animal groups, etc. The (c)(4) status allows advocacy groups to avoid federal taxes, just like 501(c)(3) orgs, but the status doesn’t render donations to the groups tax deductible. The primary focus of their efforts must be promoting social welfare – and that can include lobbying and advocating for issues and legislation, but not outright political-campaign activity. Also, these groups do not have to disclose the identities of their donors unless they are under investigation.

The U.S. Supreme Court’s January 2010 “Citizens United” ruling lead to a torrent of new 501(c)4 groups: the number of applications sent to the IRS by those seeking 501(c)4 status rose to 3,400 in 2012 from 1,500 in 2010. MOST of these applications were from conservative groups. And many of these organizations flout the law in terms of not being involved in political-campaign activity – if you saw the whole process where Stephen Colbert oh-so-easily formed his own 501(c)(4) organization, you know what I mean.

So what was the “extra scrutiny” by the IRS? Good luck trying to find out specifics beyond the phrase “extra scrutiny” again and again. It took me an hour on Internet searches to find out enough to make this list of what the “extra scrutiny” was:

  • more details on what “social welfare” activities the organizations were undertaking
  • speakers they had hosted in meetings
  • fliers to promote events
  • list of volunteers
  • roles/works of volunteers
  • lists of members
  • list of donors
  • positions on political issues the organization was advocating

Some groups have claimed they were asked who was commenting on the group’s Facebook page, but I can’t find any confirmation of this claim.

Of course, this “extra scrutiny” is a fraction of what many of these same people outraged at the IRS were demanding regarding the now defunct nonprofit group ACORN. It’s the same scrutiny these conservatives were screaming about wanting for arts organizations back in the 1990s, in their attempt to eliminate all government funding for arts organizations. And probably most importantly: no organization was prevented from engaging in the activities it wanted to, not even those with pending status. None. Zilch.

This scrutiny is not only what I have been asked for in every nonprofit and government-related job I have held in the last 15 years (yes, I have been asked by a government agency to provide a list of paid staff and volunteers – they wanted to see if our arts organization was involving “enough” volunteers”); these are details I have long encouraged nonprofits to provide on their web sites, to show transparency and credibility.

So, I’ll be by usual blunt self: any nonprofit organization, no matter what their designation, that can’t easily provide details on its programs – who, what, where, when – as well as information the number and role of volunteers and information on any activities that might be considered political advocacy, shouldn’t be a nonprofit. And if that organization is a political group, it should have to provide a public list of all financial donors. Period.

But, no, I’m not going to provide a list of volunteers. Their roles and accomplishments, yes, but not a list of volunteers.

In fact, let’s get rid of (c)(4) nonprofits status altogether. You want to form an organization that engages in political activities? Form a PAC. 

My sources:

http://www.politico.com/story/2013/05/israel-related-groups-also-pointed-to-irs-scrutiny-91298.html#ixzz2TSsJpVJ1

http://www.reuters.com/article/2013/05/14/us-usa-tax-irs-idUSBRE94B08I20130514

http://www.southcarolinaradionetwork.com/2013/05/15/at-least-2-sc-tea-party-groups-say-they-were-singled-out-by-irs/

http://www.coyotecommunications.com/outreach/scrutiny.html

http://www.salon.com/2013/05/14/when_the_irs_targeted_liberals/singleton/

Nonprofits *are* job creators!

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Recently, I heard a man on the TV ranting about why people without private sector experience are bad to serve in government offices. “They’ve never balanced a budget, created a job or had to struggle to make payroll!” he said.

And my head exploded. KAPOW.

When you are working in government, or a nonprofit, balancing budgets and struggling to make payroll is often MOST of what you do!

In the nonprofit and public sectors, the pressure to balance a budget – one that has often been cut drastically with no input from you, the person expected to balance that budget – is far greater than the for-profit/business world. And the struggle to make payroll is something I’ve seen far too often in nonprofit organizations, often because a corporation has slashed its own budgets and cut funding to the organization or initiative that had been promised for months, or a government agency suddenly had its budget cut and, therefore, had to cut the budget of nonprofits it was supporting.

And nonprofit organizations are job creators. Funding nonprofits, which are focused on improving or preserving communities for EVERYONE, are not only job creators, but also, the people that make communities places where people actually want to live and work – which helps those that start businesses. Nonprofits:

  • help improve education (which creates better workers),
  • help preserve and improve environmental health (which helps organic farmers and fishermen have better products)
  • help improve children’s health (which allows parents to have the time to work instead of caring for sick children – time, perhaps, even to start businesses)
  • help promote bicycle use (which helps create more business for bicycle shops, creates more ways for workers to get to their jobs, contributes to a healthier workforce, and creates more parking spaces for cars)
  • build and promote community gardens (which helps those that sell gardening implements and other supplies)
  • fund and manager arts organizations (which create jobs for actors, production staff and administration staff, as well as enhancing the community and making it more attractive to employers to locate businesses there)
  • build, sustain and grow universities and colleges (which train people in various areas of expertise – and these people become workers, even job creators, themselves)

and on and on.

The amount of misinformation being promoted by so many pundits and even elected officials in the USA regarding the realities of the third sector is startling, disheartening and destructive. I have worked primarily in the nonprofit and government sectors, and in those sectors, I most certainly HAVE had to balance budgets, create jobs and struggle to make payroll. In fact, I have had to be far, far more creative with resources and efficient in the use of time and resources than I have ever had to be in a for-profit setting. By contrast, most people I’ve known who have worked primarily in the corporate sector have little understanding of how to do a lot with a limited amount of resources: they can’t believe most nonprofits don’t have fully staff IT departments or the latest computer technologies, and are stunned that volunteers are, in fact, not free at all.

Nonprofits and government agencies have GOT to do a better job of talking about what they accomplish, what it takes to make those accomplishments possible, and how they make those accomplishments happen. Every nonprofit has an obligation to show their transparency and credibility, and to teach the media and general public about the resources and expertise needed to address critical human and environmental needs. The Internet has made it oh-so-easy to do that!

Also see:

Beware those charity rating sites

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Very few nonprofits hand out cash to people. Instead, they provide services. Those services could be just about anything: nutritious food for people who can’t afford to feed themselves, live theater, counseling for people who have been victims of domestic violence, shelter for unwanted animals, job training for people desperate to enter or re-enter the workforce, day care activities for people with severe disabilities, and on and on and on.

Many of these services are designed, overseen or provided by professionals — people who have the training and experience to provide specialized services. These nonprofit professionals are just like those in any for-profit profession: they have spent a lot of money on their education and training, they have bills to pay, they have health care costs, they want to be able to buy homes and put their kids through school, they need a retirement plan, etc. And to keep the best people, nonprofits have to pay competitive salaries (and their competition isn’t just nonprofits — its businesses as well).

All of these organizations have rent to pay, equipment and supplies to buy (copy machines, computers, paper, furniture), insurance and utlities to pay for, and on and on.

What about any of these costs isn’t related to program costs? A copy machine may mean the difference between serving 1000 people as opposed to just 100. A trained social worker with a Master’s degree may mean the difference in providing a job counseling program and not providing one at all. A paid, full-time manager of volunteers may mean the difference between involving 100 volunteers and just a dozen or less.

With all that in mind, I have a lot of skepticism for claims that nonprofits give too much to administative costs, as well as for grading systems that are focused mostly on financial reports and not-so-much on the results of a nonprofit’s work. Some nonprofits have told me that they have been forced to hire a revolving door of short-term consultants instead of full time employees because, the way sites charity rating organizations or the way funders count administrative costs, a consultant can be counted as a program cost, but an employee, doing exactly the same work, is considered administrative.

As the Nonprofit Quarterly put it recently, “With one holiday giving article after another urging donors to do their homework on charities, it would be nice to believe that those that set themselves up to inform donors would take care not to do harm.”

Here’s some of the many criticisms of these charity rating sites:

Here’s my advice: when evaluating a charity, look for accredication by professional bodies, such as the Council of Accreditation. Look for membership in national or international networks. Look at what the organization says it does; don’t just look at activities – look at results. Look to see if they involve volunteers — not because volunteers are “free” and replace paid staff but, rather, because volunteers prove community investment in the organization. If you don’t see this documented on the organization’s web site, email the organization and ask for it.

But remember that many large donors refuse to fund administrative costs, and that means the organization may not have the funding to hire the staff that would be needed to provide the level of detail regarding its programs you and others may want — because, you know, that’s an administrative cost.