On Wed, Apr 10, 2013 at 12:39 PM, Ingrid Srinath <[email protected]>wrote:
> Charity J: Spends virtually nothing on donor acquisition... Deploys > virtually the entirety of the small sums they collect to feed starving > children. Saves their lives but does nothing to expand the number of lives > they can save or to prevent more children from being reduced to starvation. > > Charity Q: Spends about 50% of their revenues on expanding their donor > base, auditing programmes to improve effectiveness/efficiency, building > knowledge on causes of and remedies to poverty. Consequently, reaches > greater numbers of children with greater effectiveness each year, changes > policies that cause poverty or prevent its reduction, develops programme > innovations that are widely replicated by other charities and governments. > > Which would you choose to support? Could a charity spend "overhead" in ways I support? Sure. Do they? Not usually, usually "overhead = fundraising." I.e. they are spending money to raise money. The problem is one of opportunity cost. If charity J spends 10 units directly on starving children, while charity Q spends 50 units on starving children and 50 units on raising funds, you might say that charity Q does more good. You might even be right. However, this analysis neglects the opportunity cost of that 50 units of fundraising. -- Charles
