Wednesday, September 14, 2011

The cost of charity

I guess when Republicans aren't saying "let them eat cake" to the poor and those without things like health insurance, they're suggesting that there was some nirvana time in the past when we relied on charities to take care of people rather than the government.

As someone who happens to run a charity, I have a few things to say about that.

One of the more interesting facts is that contrary to what the Republicans are implying, the nonprofit sector has seen tremendous growth lately. According to data I found with a simple google search, in 1940 there were roughly 13,000 nonprofits. By 1971, that number had risen to 200,000. Today, most estimates come in at about 1.5 million. So rather than some nirvana in the past where charities abounded to take care of these needs, the truth is that this sector is growing exponentially...but simply can't keep up.

Now I'm going to go into my business mode on this one. Some people think that "charity" means "free." Nothing could be further from the truth. Sure there are lots of things volunteers can do to provide support for those in need. But can you build low-income housing for free? How about medical care? Do you think there are enough doctors and nurses to provide care for all of those without insurance on a volunteer basis? Or do you think they're going to have to get paid most of the time. Can volunteers run a hospital? I think not.

So charity costs money. And then the question becomes...where does that money come from? Obviously it comes from donations. I wonder if any of these Republicans have looked into how much money you have to spend to raise money? I know that one well. As an example, I have a friend who runs one of the best and biggest charities in this town. Most of the financial support comes from private contributions. And they spend 22% of their budget to raise that money - that means almost $650,000 in a budget of $3.7 million.

What do you think happened to those contributions when the economy collapsed in 2008/09? So did the donations - just at the time when their services were needed the most.

As an alternative, the nonprofit I run gets over 80% of its support from local government contracts. We spend 3% of our budget on fundraising ($45,000 of $1.5 million).

So no dear Republicans. Charities alone can't handle this job. And if they tried - it would be a hell of a lot more expensive than if we as a country simply made the commitment to get the job done.


  1. Thank you! I work for a nonprofit as well, as a grantwriter, and I am in complete agreement. I wrote a series of posts on my blog about why charity can't replace government support:

  2. The "we should let charities handle the poor" is a blatant lie used to mask a lack of concern in a socially acceptable facade. Ron Paul came out and blatantly said that is the solution to the need for entitlements.

    He knows this is not a "solution." He is simply a liar.