Who's better at telling donors about a nonprofit's fundraising performance, the charity itself or a "watchdog" group?
The launch this summer of a new tool that would allow nonprofits to self-report their performance has brought the issue to the fore, resulting in an exchange of charges and countercharges.
The Direct Marketing Association Nonprofit Federation, an association of nonprofits and firms that solicit funds through direct marketing, rolled out the Nonprofit Accountability Dashboard "to demonstrate to the public that participating nonprofit organizations are transparent on fundraising."
Anticipating possible criticism, the association in its announcement took a swipe at "a patchwork of charity watchdogs" who for years have given "inconsistent measurements and theories on fundraising from an outsider's perspective.
"We believe those concepts are not helpful to those who support the thousands of reputable charities loved by the public who do amazing things to help our society advance," the group's chairman, Angel Aloma, said in the announcement.
The watchdogs didn't take long to weigh in. "There's no independent scrutiny or analysis which would provide a benefit to a donor," Sandra Miniutti, vice president of marketing at Charity Navigator, told The Chronicle of Philanthropy.
"It appears to be no different than when charities publish their own pie charts and annual reports showing donors their best attributes."
The Chronicle noted that charity regulators and the media often spotlight nonprofit fundraising campaigns that channel most of the donations to commercial solicitors.
But the DMA maintains that some campaigns that appear expensive will pay off in the long run by attracting new donors.
The DMA's new tool asks nonprofits to provide three years worth of data about how many people were served, total revenue and expenses, how much was spent on programs, the amount spent to acquire and retain donors and the number of current donors.
"Not meaningful," Daniel Borochoff, president of CharityWatch, which also monitors charities' fundraising costs, told The Chronicle. Listing the number of donors says nothing about their quality, whether they made big or small contributions or would continue to give, he said.
