I, as do many of you, feel an obligation to help my fellow Man from time to time in their hour of need. Whether it's within our families, our local
communities or helping those across the globe, service to others in any shape and form is inevitable throughout our time on Earth. When devastation
hits parts of the Earth far from our homes, we tend to give to charities to play middle-man between ourselves and those in need. In the age of
high-tech gadgets and the ability to instantly communicate, text message donations have quickly become a convenient way to reach across the globe and
collect money from those who see fit to donate.
But in my opinion, all is not as it seems. The heart-felt assistance to those in need do not make it to the needy without passing through the hands of
many organizations that see fit to extract absorbent fees and profit handsomely before the aid ever reaches the intended recipient.
To clearly see how this works, we must follow the money...beginning to end! But before we do that, I want to make sure those reading this understand
that I realize that these people must make a living. It takes time and money to organize these efforts. Costs must be covered and bills paid. My
intention with this thread is to show that these organizations do much better than we expect, and there are many people in line to take a small cut
before the money goes to those who need it most. So lets begin....
Let's pretend a natural disaster occurs somewhere in the world. With widespread destruction and people either killed or misplaced from their homes, it
is obvious that aid will be needed to help these people. Charities begin campaigns to raise money for that cause in various ways, but we are going to
concentrate on text fundraising. The charity will then contact a mobile fundraising provider to setup the program. When everything is in order, the
money begins to flow.
First link in the chain is the donor. Everyday people like you and I feel the need to help in whatever way we can, in a convenient, timely manner, and
so when we see the calls for aid it is very easy to text #xxxxx to #xxxxx and donate $10 to the cause. This donation is simply added to our monthly
phone bill. No muss, no fuss. Our part is done.
The next link is the cell phone companies. The cell phone companies are the required to pass the funds along to the Mobile fundraising organization
hired by the charity, such as Mgive, the Mobile Giving Foundation and many more. But it is not quite that simple. The cell phone companies, although
they are very careful to pass as much as they can to the large, well-known charities such as the Red Cross and Salvation Army to ward off bad
publicity, are notorious for skimming as much as 20% from the collected funds for "fees and services". On top of that, they are allowed to charge
their regular text message rates. So hypothetically speaking, the $10 has now become $8.
But this can take quite some time to make it's way to the next link in the chain. Some cell phone providers hold onto the funds for up to 120 days,
which is long after the time when the people in need require assistance the most. Right away! The American Institute of Philanthropy is quoted as
saying :“A charity will generally receive your donation faster if you mail a check or donate directly to the charity online using its secure web
site." Needless to say, the second link in the chain muddies the waters right off the bat. But let's move on....
The next link is the Mobile Fundraising Providers. (Mgive, Etc.) For a charity to implement a text donation option, these services are coordinated and
assisted by these Mobile Fund raisers. Right of the git-go, a charity must "purchase" a fundraising plan from the providers. In some cases it can cost
as much as $800 a month just to provide the service. (This fee is paid by the charity and only comes into play later on.) They may also be required to
pay one-time setup fees around $500 to get the plan rolling, along with the monthly charge. In this plan, the charity is also allowed to text
volunteers and donors through text messaging. The number of outgoing texts the charity is allotted depends on the package they decide to purchase. If
they happen to go beyond that allotment, they can be charges as much as $.05 for each additional text, further dwindling the available funds. But they
are also able to charge a fee of up to $.35 for EACH donation....and then extract a fee of up to 3.5% from that same donation.
Similar to the CEO's of the cell phone companies and the char ties as well, the Executives at the Mobile Fundraising Providers such as James Eberhard
of Mgive are multi-millionaires. And it's east to see why. We have not even talked about the fees taken by the charities, and now the $8 passed along
by the cell phone provider has now become, at best, $7.30!
Now we come to the last link in the chain before the money hits those in need. For the most part, charities pass along all of the funds minus
operating expenses fundraising costs. Hopefully I was able to show you that these operating expenses can be extremely high for any charity, and even
devastating for a smaller charitable organization. Included in these costs is not only the cost of the products, transportation of volunteers (and it
is important to remember that many of these charities use free labor to conduct aid missions and much of its fundraising) and the biggest dip......CEO
The average CEO compensation in 2008 was approximately $250,000 for a larger charitable organization. This number is quite large, but it pails in
comparison to the pay that many of the large charities give their top leaders. Some charities pay anywhere from $500,000 to almost a $2.75 million!
Needless to say, the operating expenses of these charities can be unreasonable. After all the bills are paid, the charity only disperses at best 80%
of the funds collected from the Mobile Text Fundraising Provider. I have seen some as low as 50%. So if we go with between those two numbers, and
average it out at 65%, our $7.30 has now become $4.75! Even at 80% that $7.30 becomes $5.84!
$5.84....out of a $10 initial donation. I understand that this is all based on averages, but I hope you can see that with the "operating costs" of all
the organizations involved, including the outrageous CEO compensation amounts, text donations alone are being stripped of at least half of its
original amount. The kindness of those who find it necessary to give what they can to those in need are being used to create millionaires in the
fundraising industry. The people at the end of the chain not knowing what they are losing out on, and a complete fraud being perpetuated on us all.
I leave you to make your own conclusion and please correct me if my math is wrong or if I misunderstand any link in the chain. But I have to say that
this looks to me like just one more scam on the people who give, because they care. At best, I hope I have made you think twice before you donate
through texts, and I hope you do your homework before you give to just any charity.
Thanks for reading!
2010 CEO Compensation Study
CEO Pay Charity
edit on 8-6-2011 by sheepslayer247 because: add link