On Dec. 12, teachers Michelle Myers and Laura Steele Monahan emailed the whole school, congratulating Country Day’s Run to Feed the Hungry (RTFTH) team for raising the largest group donation once again.
RTFTH, an event that’s owned and operated by the Sacramento Food Bank & Family Services (SFBFS), is both a race on Thanksgiving morning and a fundraiser for the food bank.
This is the eighth consecutive year that Country Day has led the fundraiser. With 257 participants, Team Country Day raised $8,081, well ahead of second-place Dreyer Babich Buccola Wood Campora LLP, which raised $3,475. The 493 members of St. Francis High School raised $2,348 for their team, placing fifth in the top 10 fundraising participants. The total donations from RTFTH this year were $114,930, according to SFBFS.
But how much of that money is actually going toward helping those in need?
Some nonprofit charities spend more on overhead (administrative costs) and fundraising than the programs that they aim to support, meaning most of the donation doesn’t help the cause.
For example, the Cancer Survivors’ Fund located in Missouri City, Texas, spends 89.9 percent of its total functional expenses ($1,392,364) on professional fundraising fees, according to Charity Navigator, a widely recognized independent nonprofit corporation that evaluates charities in the U.S.
Only 7.1 percent of the expenses goes toward supporting its mission, (providing scholarships for young adults to give them a new purpose and meaning in life, to enable them to start and/or continue their college education and to provide financial help for prosthesis needs).
Other nonprofit charities that are negatively rated by Charity Navigator because they spend over 50 percent of their budget on for-profit fundraising professionals include The Committee for Missing Children, Wishing Well Foundation USA and the Children’s Leukemia Research Association.
According to the RTFTH website, however, 100 percent of the donations go directly to new and existing programs. Yet the website also says that all net profits from the fundraising go directly toward the SFBFS, for there are costs in putting up the event.
So is 100 percent of the donations really going directly into SFBFS’s programs?
According to Kelly Sifkin, communications director of SFBFS, the answer is yes.
While SFBFS does have administrative costs, they are below 12 percent—“a really respectable number for a nonprofit organization,” Sifkin said.
More importantly, she added, the administrative costs are not taken from donations, but rather from sponsorships and other revenue sources.
Myers confirms that. She said it’s the money that team members pay to register for the event—$25 because of the team discount—that goes into administrative costs.
Sifkin pointed out that administrative costs are necessary for charities. They cover a wide range of expenses such as team T-shirts, permits for street closures for the race, barricades, timing chips, staff payroll, electricity bills and car fuel.
Therefore, Sifkin said, the percentage of administrative costs shouldn’t be solely used to judge charities.
“It’s really tricky because a lot of people, when they’re thinking about where they’d like to share their support, head to sites like Charity Navigator and only use the overhead to judge the work and impacts that the organization has,” Sifkin said.
“But you shouldn’t be judging the work that the organization does based on that.” Sifkin is not alone in that opinion.
Three of the leading sources on nonprofit charities—Guide Star, Charity Navigator and BBB Wise Giving Alliance—encourage donors to look past the overhead ratio. The CEO’s of all three organizations signed a letter in 2013 that says while overhead ratios are helpful in some ways, they shouldn’t be the sole deciding factor in choosing a charity.
“In most cases, focusing on overhead without considering other critical dimensions of a charity’s financial and organizational performance does more damage than good,” the letter said.
The letter also points out that overhead costs include important investments charities make to improve their work and keep their programs functional.
Despite administrative costs, the SFBFS still spent $9,189,580 out of $10,009,102 on program service expenses in 2011, according to its Form 990 filed to the IRS—a file open for public viewing. Only 8.2 percent of total expenses was spent on management and general expenses.
SFBFS operates six free programs—food, clothing, parent education, adult education, youth education and senior programs—and RTFTH is the organization’s largest fundraiser.
The school first participated in RTFTH as a team in 2006. Paul Kessler, ’11, proposed the idea to the middle-school Student Council, then headed by teachers Joel Rickert and Monahan.
“I thought it was a great idea,” Monahan said.
“I’ve always been interested in issues of hunger and food equity, and for years I volunteered with a grassroots organization, RESULTS, that worked to end hunger and the worse aspects of poverty. The other thing is that it also ties in so closely to the school’s value of the habit of helping.”
Kessler’s mother, Mary, volunteered to be the parent coordinator for the first couple of years. She compiled a folder with instructions on how to effectively run the team, which Myers refers to as “The Bible,” and left it with Country Day.
The team grew in size over the years, attracting students like Colin Keiner, ’11, who contributed to marketing Team Country Day’s fundraising. One year Keiner raised over $4,000 on his own.
When asked whether it is Country Day’s goal to remain the leading fundraising group for years to come, Myers laughed.
“I think so—we always say we’re not competitive, but we are! I think we’d love to keep it. “It shows that we’re small but mighty.”