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E-Newsletter -- January, 2005
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In This Issue:
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Tsunami Relief from US Exceeds $500 Million |
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Lies, Damned Lies, and Statistics |
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Senate Finance Committee and Nonprofit Sector Regulation |
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Book Review -- Sustaining Nonprofit Performance -- The Case for Capacity Building and the Evidence to Support It |
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Please Share With a Colleague! |
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Featured Links:
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Tsunami Relief from US Exceeds $500 Million
Since the December 26 tsunami, US charities have reported receiving $521 million to aid victims, according to an article in the current issue of The Chronicle of Philanthropy.
The American Red Cross and the US Fund for UNICEF account for slightly more than half the $521 million total. Doctors Without Borders, which discouraged additional donations within a few days of the disaster, received about $20 million in the US and $50 million worldwide. It's notable that $16 million of the $20 million raised by DWB in the US was raised over the Internet.
US residents donate almost $250 billion a year to charity, so the tsunami relief funds raised to date account for about 0.2% of annual US giving. These funds, however, may cause the percentage of US gifts spent on international programs to increase slightly in 2005.
The information is interesting in its own right, but it indicates a few other important facts. It points up the willingness of Americans to give -- and give quickly -- to international causes when disaster strikes. It also indicates that the much-written about skepticism about charities is easily overcome by well-known charities with a history of direct service.
A recent poll indicates that almost 2/3 of nonprofit executives responding indicate concern that the funds raised for tsunami relief may negatively affect their own domestic fund raising. However, few are reporting that any effects have yet been felt.
Lies, Damned Lies, and Statistics
The title of this piece is taken from a quote from 19th century British prime minister Benjamin Disraeli. It's a good quote to remember whenever analyzing statistics, and especially statistics extracted for news articles.
One set of statistics requiring such care was the announcement by the Catalogue for Philanthropy of a "Generosity Index" that ranked US states on their charitable giving as reported in 2003 tax filings.
Most of the media reported these findings without comment. A few outlets attempted to examine the data and draw conclusions, but it rapidly became apparent that the data are really not meant to be analyzed. The study's authors explicitly make no attempt to analyze the data, which is a telling sign in itself.
One funny exchange happened in the online version of The Wall Street Journal, when it was determined that "red states" (states supporting George W. Bush in 2004) were, generally speaking, more generous than "blue states" (those supporting John Kerry in 2004).
When reactions came in that the methodology was flawed because the "Generosity Index" rankings were flawed, the Online Journal threw up its hands and agreed that the data mean nothing.
So, if you were following your state's "generosity" based on this report, don't worry about it. Definitely don't make any plans around it.
Senate Finance Committee and Nonprofit Sector Regulation
-- Nonprofits required to file Form 1023 every five years?
-- All nonprofits with over $250,000 annual revenue required to have an independent audit?
-- Mandating nonprofit boards to have no less than three and no more than fifteen members?
-- Requiring nonprofits to submit strategic plans with their annual Form 990 returns?
-- Assigning jurisdiction over litigation involving breach of IRS nonprofit regulations to the US Tax Court?
Every one of these, along with many other recommendations, is included in a Senate Finance Committee staff memo on proposed changes in nonprofit regulation.
In the wake of recent nonprofit sector scandals such as the United Way of the National Capital Area, and after looking at donation abuses such as some car donation schemes, Sens. Charles Grassley (R-IA) and Max Baucus (D-MT) are working on new Federal nonprofit sector regulation. In some ways, these reforms are similar to the corporate governance reforms passed in 2002 and known as Sarbanes-Oxley.
With the support of the Senate Finance Committee, Independent Sector has assembled more than 100 experts to address the draft document and make recommendations on behalf of nonprofits about what new legislation and regulations should look like. The first phase of this work is almost complete.
Follow this link below for more information on Independent Sector's "Panel on the Nonprofit Sector" -- http://www.nonprofitpanel.org.
Legislation is expected this year, and hearings may be held as soon as next month.
Book Review -- Sustaining Nonprofit Performance -- The Case for Capacity Building and the Evidence to Support It
Paul Light's latest book is an excellent analysis of capacity building and nonprofit organizations, based on survey research which yields surprising and very valuable results. However, the book's credibility is harmed by a flawed marketing attempt to tie public confidence in nonprofits to 9/11 and assert that relative lack of public confidence in charities is a recent phenomenon and that the change post-9/11 was significant.
Please Share With a Colleague!
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