To be effective, charities need to invest in themselves
Author: Nicole Mezzarobba Ford
Imagine the impact we could have if instead of treating charities like charity cases, we thought of them, and invested in them, as businesses – helping them scale, become more efficient and deliver a better return on investment? It’s counterintuitive by most people’s thinking, but charities are actually more effective if they aren’t expected to spend all their money on program delivery. When they invest in themselves, they can help more people.
It’s part of our culture of philanthropy to think charities should spend all their money directly on programs, that “administrative” spending is bad. A recent Imagine Canada survey found that almost two-thirds of Canadians who plan to donate over the holiday season believe that charities spend far too much on their administration and overhead costs. In fact, only 7 per cent of those polled disagreed with the view that charities overspend on administration.
The challenge is the misperception by donors that any dollar not seen as going directly to the stated cause is “wasteful” and “outrageous.” We need to put an end to this old-school thinking and encourage charities to invest in business resources.
We need to spread the message that to be effective, charities, like the private sector, need to actively invest in themselves in order to best help those they serve.
Instead of simply providing cash grants to charities, non-profits and social enterprises, invests in the expertise and resources required to help them grow and function most effectively.
It’s an approach with proven results and high potential, but it requires a cultural shift. Donors need to give implicit permission for charities to invest in “administration and overhead.”
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