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Your Turn / Re: What is the best way for pewsitters to support missions?
« on: May 17, 2015, 12:14:24 AM »
LutherMan:
It's interesting to me whenever people refer to overhead as "skimming," as if any portion not going to the end-user is unrelated to the work that is being performed. So, what definition are you attaching to 'overhead'?
Folks may want to spend some time reading the information available at: http://overheadmyth.com This is an effort of the three major watchdog organizations: Better Business Wise Giving Alliance, Charity Navigator and Guidestar to shed some light on a topic that has really fouled things up for a lot of people.
The cost to solicit donations (when they aren't freely offered up), and especially the cost to care for the donor who makes gifts, are part of the cost of doing 'missions' in this era. Generating and mailing tax-deductible receipts, answering questions from people who want to be good stewards, providing accountability reports, keeping records over the course of a year in case receipts are misplaced, ensuring donor restrictions are met under IRS regulations and the specifications of the Financial Accounting Standards Bureau (FASB) etc. have to be borne somewhere, by someone. The costs of promoting mission opportunities in ways other than solicitations have to be borne by someone.
Whenever my team and I pick up the telephone, or answer an email from a concerned or enthusiastic donor, or send out materials that have been requested, or tailor a donor's record to better align with their interest, the organization incurs an overhead cost. (But I'm answering this thread on a Saturday night, on my time and simply because of my personal and professional interest in 'overhead' as it relates to non-profits)
If the concern is that an organization skims money from mission donations to, say, pay the guy that cuts the grass at the office building then your concern would be well-placed. But there are rules that discourage (if not prohibit) that kind of thing from happening. A true example for the LCMS is that Board of Director policies prohibit the use of restricted contributions to fund things like the salaries of the executive officers. So your mission donation can't pay the President/CEO, vice presidents, or other executive officers salaries.
You can certainly find ways to send 100% of your donation to the field. I can tell you, as a trained professional, you will run some funky risks doing it that way. For example, pick a missionary in Africa and mail them a personal check. Whether they can actually cash that check and get 100% of the equivalent funds from the local bank isn't always a certainty. The local bank in Africa may charge a processing fee - overhead. They may charge a currency exchange fee - overhead. The bank, depending on the country, may want a gratuity for handling your check - overhead. Because you made a check payable to the individual missionary, you lose the tax-deductibitliy of the donation (ref. IRS Publication 526). And you have no real reassurance that the missionary will use the money to spread the Gospel rather than simply go out for a nice relaxing evening on the town, or to buy a DVD of their favorite movie.
My point is that anyone who uses overhead as a measure of effectiveness of an organization - or even efficiency for that matter - is misguided. Perhaps a better question to ask is what kind of impact you want your support to have, and which organization - regardless of their overhead - is in the best position to help you make that impact.
As an aside: I also find it interesting that most nonprofits - including church related ones - have an office or department that exists to serve donors, pastors and financial advisers - and provide printed or electronically accessible information to help people make informed choices. My team even provides a toll free number and an e-mail address to make it easy to contact us, yet I constantly read discussion threads about these kinds of topics and wonder: What are we doing or not doing that keeps people from calling us to inquire about these kinds of things?
But about that 'skimming' thing again - what feeds that perception?
It's interesting to me whenever people refer to overhead as "skimming," as if any portion not going to the end-user is unrelated to the work that is being performed. So, what definition are you attaching to 'overhead'?
Folks may want to spend some time reading the information available at: http://overheadmyth.com This is an effort of the three major watchdog organizations: Better Business Wise Giving Alliance, Charity Navigator and Guidestar to shed some light on a topic that has really fouled things up for a lot of people.
The cost to solicit donations (when they aren't freely offered up), and especially the cost to care for the donor who makes gifts, are part of the cost of doing 'missions' in this era. Generating and mailing tax-deductible receipts, answering questions from people who want to be good stewards, providing accountability reports, keeping records over the course of a year in case receipts are misplaced, ensuring donor restrictions are met under IRS regulations and the specifications of the Financial Accounting Standards Bureau (FASB) etc. have to be borne somewhere, by someone. The costs of promoting mission opportunities in ways other than solicitations have to be borne by someone.
Whenever my team and I pick up the telephone, or answer an email from a concerned or enthusiastic donor, or send out materials that have been requested, or tailor a donor's record to better align with their interest, the organization incurs an overhead cost. (But I'm answering this thread on a Saturday night, on my time and simply because of my personal and professional interest in 'overhead' as it relates to non-profits)
If the concern is that an organization skims money from mission donations to, say, pay the guy that cuts the grass at the office building then your concern would be well-placed. But there are rules that discourage (if not prohibit) that kind of thing from happening. A true example for the LCMS is that Board of Director policies prohibit the use of restricted contributions to fund things like the salaries of the executive officers. So your mission donation can't pay the President/CEO, vice presidents, or other executive officers salaries.
You can certainly find ways to send 100% of your donation to the field. I can tell you, as a trained professional, you will run some funky risks doing it that way. For example, pick a missionary in Africa and mail them a personal check. Whether they can actually cash that check and get 100% of the equivalent funds from the local bank isn't always a certainty. The local bank in Africa may charge a processing fee - overhead. They may charge a currency exchange fee - overhead. The bank, depending on the country, may want a gratuity for handling your check - overhead. Because you made a check payable to the individual missionary, you lose the tax-deductibitliy of the donation (ref. IRS Publication 526). And you have no real reassurance that the missionary will use the money to spread the Gospel rather than simply go out for a nice relaxing evening on the town, or to buy a DVD of their favorite movie.
My point is that anyone who uses overhead as a measure of effectiveness of an organization - or even efficiency for that matter - is misguided. Perhaps a better question to ask is what kind of impact you want your support to have, and which organization - regardless of their overhead - is in the best position to help you make that impact.
As an aside: I also find it interesting that most nonprofits - including church related ones - have an office or department that exists to serve donors, pastors and financial advisers - and provide printed or electronically accessible information to help people make informed choices. My team even provides a toll free number and an e-mail address to make it easy to contact us, yet I constantly read discussion threads about these kinds of topics and wonder: What are we doing or not doing that keeps people from calling us to inquire about these kinds of things?
But about that 'skimming' thing again - what feeds that perception?