MoneySense
One Mount Pleasant Road, 11th Floor
Toronto, Ontario
Canada
M4Y 2Y5

To the Editors:

A grading system like the one used by the MoneySense Charity 100 may make donors feel more informed about which charities they should support, but in fact, they’re looking at a list that is based on a number of inaccuracies and assumptions.

First, the 35 percent figure used by The Charity 100 and others for fundraising costs isn’t based on any sort of research. In fact, research by the Nonprofit Overhead Cost Project shows that fundraising costs legitimately vary widely by type of organizations and type of fundraising.  And the Canada Revenue Agency (CRA) itself says that “[f]undraising ratios alone are not determinative in assessing whether a charity's fundraising complies with the requirements of the guidelines in this guidance.”

Second, there is increasing research which shows that organizations that invest in infrastructure have greater impact because they have better facilities, better resources and better trained staff.

Third, the figures used by MoneySense leave little room for explanation. What proof do you provide that an organization that has 36 percent fundraising costs (and doesn’t meet the 35 percent standard) is operating less effectively than an organization with 34 percent fundraising costs?

Certainly, we recognize that the intent of the article is laudable. The effective and efficient use of charitable contributions is very important. However, donors should look at fundraising costs as one of many key factors, while also realizing there are hundreds of factors that can affect a charity’s fundraising costs, and these costs can vary widely from year to year

Our advice to donors: figure out which causes mean the most to you and identify charities that work on that mission. Learn more about them, volunteer for them and ask questions about issues that concern you (like fundraising costs or administrative costs). Make your giving personal and informed—it takes more than reviewing an arbitrary grade.

Sincerely,

Mark Climie-Elliott, CFRE

Chair, Canada Council

Association of Fundraising Professionals