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Can You Know Where Charity Dollars Go? Not Easily
Source: NPR  ·  May 6, 2011  ·  Excerpt

The controversy over Three Cups of Tea author Greg Mortenson and his charity has donors asking this question: How do I know if my charitable dollars go where I think they're going?

Not easily, answers Daniel Borochoff, president of the American Institute of Philanthropy. He was one of the first to raise red flags about Mortenson's charity, Central Asia Institute (CAI). Last month, CBS' 60 Minutes also questioned how the group spent its funds.

"It ought to be legally required that if you're raising money for a cause, you have to be specific about what exactly that cause is," says Borochoff.

But he says that's not currently the case, and charities are often vague.

'Three Cups' Stirs Up Controversy

CAI notes on its website that it spends 85 percent of its money on programs, such as building schools and hiring teachers in remote areas of Pakistan and Afghanistan. It fails to mention that its "programs" also include promoting Mortenson's books and lectures — something the charity says helps to educate the public about its cause.

"So as a donor, you've got to find out what is the charity's program, because they're not clear about it," says Borochoff.

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Our take
Stories like this highlight the clear need for transparency between charities, other nonprofits and their donors. When someone chooses to share their hard-earned income with an organization that shares their passion for a cause, they have every right to know how that money will be used.

Indeed, the standards and practices of many nonprofit groups (and even the government) have increased the expectation for greater transparency among the general public. Scandals like the one involving Greg Mortenson have contributed to the overall hunger for accountability as well.

Contact us now for help answering these and other questions:

  • How does my organization measure up to current standards and best practices for communicating with donors about uses of revenue?
  • What are the best ways to increase transparency and how are they typically implemented?

 

 
 
       
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