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Weigh who you give your Charitable Dollar to at Christmas

Weigh who you give your Charitable Dollar to at Christmas
Ask the hard questions about leadership compensation and how much money reaches beneficiaries

By David W. Virtue, DD
October 26, 2017

In the next couple of months, millions of Christians throughout the Western world will give away billions of dollars to their favorite charities. Most of them will only have a scant knowledge of where the money is going, pushed along by emotional tug-at-your heart appeals that they receive in the mail, email or on television. Donors will invariably never ask how much the top executives of these organizations get paid.

When they do occasionally ask they might be told that approximately thirty percent goes to salaries and fundraising, the other 70 percent to program. They will not be told that as much or more than 80% percent will be donated goods with no monetary value except what the organization deems it to be worth.

A case in point is Food for the Poor, a Florida-based NGO, and one of the largest hunger relief and development organizations in the nation. Its Director, CEO, President, Robin G Mahfood receives a generous compensation of $438,031 in a total revenue of $1,158,156,705. What is not clearly stated is that 86.4% are "donated goods" according to a 2014 report.

Food for the Hungry, an Arizona-based NGO actively partners with community leaders and families in over 20 countries across the globe to lift the burden of extreme poverty, its mission statement claims. Last year they took in some $85 million, with some $36 million of it Govt. money. Maurice Martin, Interim Chief Executive Officer receives a salary of $178,512 while Keith Wright, Former Interim Global Executive Officer received $141,665.

World Vision International, an Evangelical Christian humanitarian aid, development, and advocacy organization with a massive child sponsorship program, has total revenue of $1,005,144,556. Its president, Richard E. Stearns is compensated to the tune of $451,254.

Samaritan's Purse, a Christian charity raised over US$599 million in their last financial year and spent 16% on salaries for its staff, including a pay package of $822,333 to the Rev. Franklin Graham (who also receives $258,677 from the Billy Graham Evangelistic Association) and pay packages over $250,000 to six other members of staff. Adding the salaries to other expenses of 16% as well, 32% of their income used on the organization itself. This also excludes the $95 million unspent.

Graham also flies around the world in a Mitsubishi MU2, described as a fast, supple turbo-prop aircraft proclaiming Jesus to a spiritually starving world. A new MU2 costs $1.9 million. You can pick up a used 1981 MU2 for a mere $700,000.

These expenses exclude the operational expenses of their offices in each country. There could be another 10% to 20% added to overall operational expense.

Tearfund, a British Christian charity raises £72 million ($95 million) in a year, but spends £23.9 million ($36 million) on staff costs. They will no doubt argue that the 33% spent on salaries enables the organization to conduct the programs in the various countries, but it is important to note that this 33% of total donations is not spend directly to alleviate the suffering of people. Adding the 6% of support and running costs and the 11% spent on raising funds with the 33% spent on salaries, you find a Christian organization spending 50% of their total income not on those who are suffering but on their own internal structural mechanisms. Of course, overhead costs are a necessary expense in running an organization, but it should remain the means to an end rather than an end in itself where the survival and expansion of the organization is paramount. Unfortunately, high overheads is a modern trend, which is becoming evident in charities set up to support Christians specifically.

Open Doors which serves persecuted Christians worldwide raised approximately US$17.6 million within the US and spent approximately US$8.35 million on operational expenses, which include salaries, travel, etc. This expense total includes pay packages for their US staff, with five earning over US$100,000 per year. Their expenses equate to 47% of their total income, with only 53% of the US$17.6 million directly going to persecuted Christians.

Their UK arm, for the same period, raised approximately £11.7 million ($15.4 million) whilst spending £6.2 million ($8.18 million) on operational expenses, which includes raising awareness, preparing the next generation of supporters and engaging the Church. Therefore, only 47% of their donations go to directly support the persecuted Christians. Pay packages for six of their staff added to over £50k ($66k) each. These expenses highlighted excludes the operational expenses of their offices in each country. There could be another 10% to 20% added to overall operational expense.

By contrast, Barnabas Fund, a British charity focusing on assisting persecuted Christians around the world under Islamic threat, raised £13.6 million ($17.9 million) last year, but spent 12% on overheads including fund-raising and promotion. Salaries for the organization's leaders are privately funded.

Transparency and manipulation are often the hallmarks of appeal letters, and Christians should ask for the organization's financial statement and what they pay their top executives before writing out checks. Emotional appeals, either from letters or television ads can be deceptive, not just because they show a need which may be very real, but is the money really dealing with the problem portrayed, or is the money used for other purposes.

Christians in the West should ask questions, challenging Christian organizations and holding them accountable. Naivete is no excuse for not doing due diligence. People should also ask how much of the dollar will be spent directly on the beneficiaries.

If you want to find out more about your favorite charity here are two links we recommend to readers:

Or in the US you can go to Charity Navigator - Your Guide to Intelligent Giving https://www.charitynavigator.org

The Evangelical Council for Financial Accountability was founded in 1979, ECFA provides accreditation to leading Christian nonprofit organizations in the U.S. that faithfully demonstrate compliance with established standards for financial accountability, fundraising and board governance. Members include Christian ministries, denominations, churches, educational institutions, and other tax-exempt 501(c)(3) organizations. http://www.ecfa.org/


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