Ink on my Fingers

Posted by Laura Otten, Ph.D., Director on July 8th, 2011 in Articles, Thoughts & Commentary

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Funny what we will and won’t do, to what we can and can’t adjust.  A voracious reader, I love my e-books.  I can take as many books as I want wherever I go to fit my mood, whatever it is, and I don’t need to schlep an extra suitcase.  I will not, however, read a newspaper on line.  Couldn’t figure out why, what was stopping me, until recently.

It was the May 5 issue of The Chronicle of Philanthropy that helped me to understand why.  Online, I am stuck reading one story at a time.  But with the print version, I can jump from story to story on the front page and see what piques my curiosity.  All in one glance; no scrolling, not going forward or backwards, all right there in front of my eyes.  And I love jumping from story to story because often the juxtaposition of stories is more interesting than any one story in and of itself.

Take the issue of The Chronicle, noted above.  Sub-headline on the lead story, top of the front page:  “60% of big charities say Internet fund raising is stronger so far in 2011 than a year ago, ….”  Jump down right below and the headline reads, “Most Donors Intend to Give More in 2011, ….”  Last headline is Ore. Crafts Novel Way to Crack Down on Overhead Costs.”  And sandwiched in between all the stories (and a picture of a bicyclist hoisting his bike standing on the beach) is a box graph title “Why Donors Stop Giving.”  [Reasons?  Changed priorities 41%), asked too many times to give (32%) and own financial position changed (30%).]

Glancing at all of these headlines, I got a very good sense of what I would find in the article—with one exception—and what is top of the mind of nonprofits these days.   The story that wasn’t revealed by its headline, however, was the most interesting.

Just how was the state of Oregon cracking down on it the overhead costs of nonprofits? The solution was amazing to me.  In fact, I didn’t believe I had gotten it right after the first reading.  So, I read it again, and again, and yet again—several more times.  The state Senate has approved a bill that would ban charities from receiving gifts that are eligible for a state tax deduction if those charities spend less than 30% of their expenses on their programs and services.  Did you get that?  Did you have to read that statement multiple times in order to really believe it was saying what it said?  Was Oregon’s Senate really saying that if you spend $.31, $.40 or $.50 of every dollar on programs and the rest on what I can only assume they would label “overhead” costs you are deserving of receiving gifts from donors who, in return, may claim a state tax deduction?  Excuse me?

I’d love to meet the donor who would be thrilled to know that $.70 of every dollar s/he gave to a nonprofit was going to pay the electric bill, or the copier or for new office equipment.  I don’t recall getting any appeal letters recently with pictures of a hot water heater or blackboard or phone bill.  I get that you can’t deliver programs and services without the necessary infrastructure supports in place, and I’m willing to fund them as well as the programs and services.    And  I know that it is an ongoing struggle to try to educate donors to this dual funding need—programs and overhead.  But I would never give my money—tax deductions or no tax deductions—to an organization that a)needs to spend that much of its funds on overhead and b)thinks it is okay to do so.  And I would never vote for a legislature who would support such a notion.   Perhaps Oregonians should take a look at the budgets of their State Senators.

I can only imagine the front page headlines a year from now if other states’ legislatures take their lead from the Oregon Senate and actually pass legislation suggesting that it is a “nonpunishable” offense for nonprofits to spend $.71 of every dollar raised on overhead and $.29 on programs and services:    “Why donors stopped giving?  Irresponsible nonprofits. “New Study Find Most Donors Intend to Give Way Less in 2012.”  “Bottom drops out of internet giving as donors discover the true costs of nonprofits doing business.”

The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.