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The Sin in Doing Good Deeds

nytimes.com

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Re: The Sin in Doing Good Deeds

#21

Post by jd »

ars wrote: post #8
jd wrote: post #4

Earlier quoted context omitted.

It's not that obvious where to draw the line. Executives of charities need to get paid. And because charities deal with large amounts of money, mismanagement can be very costly. By increasing the salary of the executives you can get more qualified people. As a result, the charity becomes more efficient and effective and everybody's happy. Often charities have billions (?) of capital. If they hire a local private bank…

No, they are paying people to make more money with investments or whatever - that's fine, do what you want - the money comes from the investment income, it doesn't matter if it's inhouse or out. But if you pay people from donations directly then it's not OK to pay a lot. Are you paying people to get more donations (no good), or are you paying people to make more money in some other way - including by saving you money…

So as long as the charity compartmentalizes their income into different groups (depending on source) and pay the Porches from one group you're OK with it?

Your line between OK/!OK seems really arbitrary to me.

Re: The Sin in Doing Good Deeds

#22

Post by ars »

jd wrote: post #21
ars wrote: post #8

Earlier quoted context omitted.

No, they are paying people to make more money with investments or whatever - that's fine, do what you want - the money comes from the investment income, it doesn't matter if it's inhouse or out. But if you pay people from donations directly then it's not OK to pay a lot. Are you paying people to get more donations (no good), or are you paying people to make more money in some other way - including by saving you money…

So as long as the charity compartmentalizes their income into different groups (depending on source) and pay the Porches from one group you're OK with it? Your line between OK/!OK seems really arbitrary to me.

No, not their income, their output, i.e. expenses.

I'm OK with them spending money to make (i.e. earn) money, or to save money. I'm not OK with them spending money to collect more donations.

For example if you want to hire an expensive but very very good organizer that will save the charity administrative costs greater than it costs to hire the person - no problem.

On the other hand if you want to hire someone who is really good at drumming up support and getting people to donate, that could be a problem, IF they are getting paid a lot. And I don't care that they will bring in more money than it costs to hire them. I'm still not OK with it.

How much is too much? I'd say a few percent - i.e. if it costs more than a few percent to bring in X number of donations, then don't do it. (Or if you do it let people know upfront that XX% of their money is being used to try to get more money.)

That's why I refuse to donate to pretty much any group that calls me. Paying for those calls usually costs around 50% of the money brought in.

There are some cases where the calls are by volunteers, and then it's OK obviously.

Take a raffle for example: some charities will award as prizes 50-80% of the money brought in. Normally I would not be OK with that, except that they are usually upfront about it.

Mass mailing: I don't know how much that costs, but if it costs more than a few percent of the money brought in, don't do it.

A "for-profit charity". That's where someone starts a charity, for the purpose of paying himself a nice salary. Suppose he pays himself 50% of any money brought in.

You might say: well there is still that 50% of the money that does some good, which otherwise would not have happened.

I don't agree.

I think that last case is the example in the article. He says to himself: at least I'm doing some good in the world, so what if I'm making lots. I (and I guess most other people too since he was forced to shut down) don't agree.

Re: The Sin in Doing Good Deeds

#23

Post by 12ren »

In the aftermath of a wave of criticism, his company collapsed.

One breast cancer charity that parted ways with Mr. Pallotta began producing its own fund-raising walks, but the net sum raised by those walks for breast cancer research plummeted from $71 million to $11 million.

But because his company collapsed, the true comparison figure that Mr. Pallotta raised became $0 million. As a business, it didn't succeed. And he's blaming the world. People often give to charities to feel charitable, and having a profit-motive undermines that - even if the result is that less money is raised. This is because people making donations are often fulfilling a need to give and help people - not by what is best for those being helped. The latter requires a kind of ruthless saint, quite different from the human motivation of brotherly love.

In contrast, ordinary businesses helps people, or else no one would give them money. A fantastic example of this is Grameen Bank "microcredit": http://www.grameen-info.org/index.php?option=com_content&#38... Usury (interest for credit) has got to be pretty much the opposite of charity, yet it seems to do tremendous good.

Re: The Sin in Doing Good Deeds

#24

Post by ars »

shader wrote: post #19
ars wrote: post #8

Earlier quoted context omitted.

No, they are paying people to make more money with investments or whatever - that's fine, do what you want - the money comes from the investment income, it doesn't matter if it's inhouse or out. But if you pay people from donations directly then it's not OK to pay a lot. Are you paying people to get more donations (no good), or are you paying people to make more money in some other way - including by saving you money…

>But if you pay people from donations directly then it's not OK to pay a lot. Unless the donator is aware of the fact that you are paying your employees with the donations, and choose to give anyway. In fact, most large charities have employees who get paid, usually out of donations :). But you don't make your decision based on their management process, but based on the service they provide you; namely aiding some ca…

But I do actually make my decisions based on their management process. Personally if they spend more than 5-10% of the money on administrative expenses I don't donate. And BTW that cuts out the vast majority of the charities, I think (wild guess) that most spend around 50%, and some as high as 75% (police fraternities for example (again, wild guess)).

The newspaper example, I think, was more a case of the person not being upfront about it.

Also, I personally think that if the charity money did not go to him, it would go somewhere else. So by him consuming 50% of the donations for his own pocket he is reducing the amount of charity money in the world.

Others might disagree and say that if he didn't get the donation, no one would. So you might as well allow him to exist.

If that's your opinion fine. But I feel that even if the second case is the real one I still am not OK with it (but I think the first one is what actually happens).

Re: The Sin in Doing Good Deeds

#25

Post by quoderat »

sokoloff wrote: post #20
quoderat wrote: post #17

The problem is that there are many qualified people in charity work who make barely-subsistence wages who would likely do an as-good or better job with far less pay. So, for the most part, my guess is that $500,000+ salaries are a form of rent seeking, and are not justified in the so-called marketplace. It'd be nice if someone could crash together the stats and see if this intuition bears out. You know, look at perce…

Did you read the article at all? Take the case of the breast cancer charity which, from the article, was pulling in $71mm from charity walks using his services. They stopped using his services and continued the walks and are taking in $11mm now. You might argue that several other variables might have also changed, but a 6.5x factor is hard to ignore.

I read the article. I wouldn't call one anecdote data, though it's about 1/10,000 of a good start.

Re: The Sin in Doing Good Deeds

#26

Post by albertni »

quoderat wrote: post #25
sokoloff wrote: post #20

Earlier quoted context omitted.

Did you read the article at all? Take the case of the breast cancer charity which, from the article, was pulling in $71mm from charity walks using his services. They stopped using his services and continued the walks and are taking in $11mm now. You might argue that several other variables might have also changed, but a 6.5x factor is hard to ignore.

I read the article. I wouldn't call one anecdote data, though it's about 1/10,000 of a good start.

That's a little harsh. It was a pretty significant anecdote - a 6.5x decrease with the only clear change being Pallotta's company-charity being forcibly stopped from continued involvement. Is there room for other plausible reasons to have caused the drop? Definitely. And of course if, hypothetically, Pallotta's company-charity was involved with sufficiently many causes, you would even expect there to be at least one anecdote with such a substantial drop. But to call it "1/10,000 of a good start" is much more unreasonable and illogical than thinking the anecdote might be of worth.

Re: The Sin in Doing Good Deeds

#27

Post by trominos »

GavinB wrote: post #13

If an organization is turning a profit for its owners or shareholders then it's a business, not a charity. That's a definition, not a moral judgment. There are lots of businesses that do good work for people. The tricky part is when you're soliciting for donations, you just need to be extremely transparent about where the money is going. What we need is not a rethinking of what a charity can be, but a rethinking of w…

From answers.com: "Charity: An institution, organization, or fund established to help the needy."

Re: The Sin in Doing Good Deeds

#28

Post by trominos »

cabalamat wrote: post #10
tome wrote: post #7

Renumeration is tricky for charities. In a public company, and to a large extent a private company, the bottom line is the bottom line. Investors invest, and they want money out of it. As long as it's legal, anything goes to get that profit. In a charity the bottom line is providing some much less tangible benefit to someone or something. The bottom line is a much fuzzier concept. The benefit is harder to gauge than…

Indeed. People give money to charities because they want to help a cause, not because they want to help the chief executive get paid lots of money.

No. That's exactly the point: people don't give money to charities to help a cause, they give money to feel good.

If they gave to help a cause, then they would support whatever (reasonably ethical) methods best helped that cause. The fact that so many donors bitch about frankly miniscule CEO compensation proves that the majority of them are not in it to improve the world -- or at least that there are other things they want out of their donation.

Re: The Sin in Doing Good Deeds

#29

Post by trominos »

quoderat wrote: post #25
sokoloff wrote: post #20

Earlier quoted context omitted.

Did you read the article at all? Take the case of the breast cancer charity which, from the article, was pulling in $71mm from charity walks using his services. They stopped using his services and continued the walks and are taking in $11mm now. You might argue that several other variables might have also changed, but a 6.5x factor is hard to ignore.

I read the article. I wouldn't call one anecdote data, though it's about 1/10,000 of a good start.

You might not call it that, but one anecdote is indeed data. A very small amount, to be sure -- but it's all we've got.

Tiny amounts of data can almost never prove a particular theory correct (in sociology, at least), but you're quite simply wrong if you think we can't get anything out of them. This particular data -- datum, I guess -- certainly can't show that charity CEOs in general earn their keep, but it so blatantly contradicts your theory that I think it's safe for us to assume that you're incorrect.

Is it possible that "there are many qualified people in charity work who make barely-subsistence wages who would likely do an as-good or better job with far less pay" and that the story's CEO's departure caused an 85% loss in the charity's income? Yes, of course. But it's unlikely. At the very least it seems like there needs to be some kind of barrier to hiring those people -- maybe it's impossible to determine which of these minimum-wage earners is actually a highly competent manager.

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