90 Cents Out Of Every Dollar Goes To Veterans? What? Why? How?

Before I started working at a non-profit, I used to research the charities I would donate to diligently, in order to see what percentage of their spending was used on programs, and not being wasted on the dreaded "overhead".

Somewhere along the line, (I'm not sure where), the saying: "9 out of every 10 cents goes directly to _______" became public consensus for the bellwether of a good charity. And that's what I always sought out when researching charities in which to donate.

Then I began working for, and eventually leading a non-profit - and I came to realize that this was dead wrong (or at least incomplete).

That's because spending a lot of money on programs, as this rubric implies, does not in any way correlate to a good non-profit. Here's a few reasons why:

• Efficacy is not a part of the equation. What if an organization is spending a lot of money on ineffective programs? On paper, they would look amazing, but in reality they could be doing more harm then good.
• It treats all organizations as if they do the same work. Providing free intensive mental health care is not the same thing as running a soup kitchen. They are inherently different things with different expenses and goals, and should be evaluated accordingly.
• It forces a short term view. Non-profits are so worried about keeping this spending ratio high on their tax forms each year, that they will sometimes forgo making long term investments in their business for fear that this ratio will go down one year and they will lose public trust (and donors). You can't run an effective business when you can only plan 12 months out.
• It's critical that non-profits spend money outside of their programs. No donor wants to hear that their generous gift went to pay for things like workers comp. insurance or trash pickup service, for example. Yet we have to spend money on these things to order to operate a business!
• Non-profits exist to address and solve big societal problems. You can't do this, without building infrastructure - which is usually considered overhead!

The above being said, what I've learned as a non-profit leader is that having a real relationship with your donors is critically important, such that they understand and see the importance of the work you're doing, and they trust you to spend their dollars in the most frugal and effective way possible. Even if this sometime means we have to buy unexciting things like software licenses or health insurance with them.

Also, I've learned that the value of those to give to a charity in a scheduled way cannot be overstated. As someone who runs a non-profit, having predictable donations is critically important to being able to run a stable business that really moves the needle, and it gives you the ability to get past the "one year at a time" mindset, and really think long term.

So, next time you think about donating to a cause that you care about, I'd invite you to go one layer deeper than spending. Is the organization positively changing the trajectory of a person's life in a quantifiable way? Here's a few questions you can ask to get at that:

• Ask how the organization is measuring outcomes, and what they are?
• Ask if they are using evidence-based practices for their programs?
• Ask if they are conducting any research or program evaluation?
• See if they have a strategic plan that looks 3-5 years out? Where do they want to be?

Finally, a quick plug if you're made it to the end. After reading all of this, if you're looking for a good veteran serving non-profit to support, I'd invite you to check out Team RWB's Operation Eagle. We'd be forever thankful.