How much is too much? We would all like to believe that every penny that we give to charity goes directly toward the end cause. A nail for Habitat for Humanity, a band-aid for the Red Cross, and a pencil for the Boys & Girls Club. But we all know that life is not so simple. Even charities need to buy computers, turn the lights on, and pay staff. Yes, staff. And that includes (gasp!) fundraising staff! You mean charities raise money to pay people to raise money?
But how much is too much? A recent study by Ellison Research revealed that most Americans believe most non-profits spend too much on overhead.
In fact, 62% of all respondents believe that overhead spending by charities is higher than what is reasonable.
Here's the funny part. They didn't tell the respondents, "the average charity spends $x.xx on overhead; is that too much?"
No, they asked, "how much do you think charities spend on overhead. Okay, now how much should they spend?" The results were clear. The amount Americans think charities spend on overhead is more than the amount Americans think they should spend.
The average American believes that 33.6 cents out of every dollar raised is actually spent on overhead. This is not the actual amount, rather what Americans think. The answers were all over the place, with as many as 35% of respondents saying that they believe that more than 50 cents out of every dollar is spent on overhead.
When asked how much charities should spend, the average American responded that 22.4 cents is reasonable. Not ideal, mind you, but reasonable. The fact that the average American said, "I think they actually spend 33.6 cents, but they should only spend 22.4 cents" without ever hearing any real numbers is really kind of crazy when you think about it. I mean, how pessimistic have we become?
The survey goes on to ask if you think spending on overhead is higher than reasonable, equal to reasonable or less than reasonable. As stated earlier, 62% of all respondents said that it is higher than reasonable. The survey breaks it down by demographics, such as age, ethnicity, income and geography. I'll let you visit the link and come to your own conclusions there.
The President of Ellison Research cautioned that this study is not an indictment of the actual practices of the non-profit industry, but it does not speak well of the public’s perception of the industry.
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