The Good Blog

It has been my privilege during my travels to become friends with former High Court of Australia Judge, the Honourable Michael Kirby AC CMG in his role as President of the New South Wales Court of Appeal. After he was elevated to the High Court of Australia, I was particularly honoured when he cited me in a charity law decision. Prior to serving on Australia’s highest constitutional and appellate court, Michael was Special Representative of the Secretary General of the United Nations for Human Rights in Cambodia from 1993-1996. Most recently, he was honoured as a co-winner of the 2010 Gruber Justice Prize, which recognizes “individuals…whose groundbreaking work provides new models that inspire and enable fundamental shifts in knowledge and culture”.

Now in retirement, Justice Kirby has agreed to come to Vancouver as part of Benefic’s “Charity Matters” series, for several meetings and lectures, from September 29-30, 2010. He is a dynamic speaker whose presentations are always interesting and engaging.

Justice Kirby will be speaking on the topic, “What Is the Public Benefit of Human Rights?” Increasingly, charities are required to demonstrate to CRA that their activities and purposes demonstrate a “public benefit” which is tangible and can be established in court. This is much more difficult in areas of human rights and religion than it is in the relief of poverty or advancement of education. Justice Kirby’s exploration of the impact of human rights principles on the humanitarian, social, political and religious activities of civil society organizations is one of the most significant challenges in the future of charity law.

Justice Kirby has served as a judge since 1983 and was on the High Court of Australia from 1996 – 2009. Kirby has been heavily involved in human rights issues around the world. During his time as Special Representative of the Secretary General of the United Nations for Human Rights in Cambodia, Justice Kirby fought tirelessly for the recognition of HIV/AIDS as a human rights issue. Since his retirement, he has taken an active teaching role, putting his twelve honorary doctorates to good use as a Distinguished Visiting Fellow at the Australian National University along with a number of other institutions. We hope you are able to join us for this important conversation with the honourable Michael Kirby on a charity issue that matters.

If you’re interested in attending, please contact info@beneficgroup.com to ask for specific event details and registration information, as soon as possible as the events are in high demand.

Donors I work with often tell me they will only give to a charity that has very low overhead, so that their money goes to the cause and not administration. This is obviously motivated by a desire to have their donations go the farthest and do the most good.

The irony is that as a result of this widespread pressure, many charities and non-profits sacrifice effectiveness to be low cost, or perceived as low cost. And in doing so, they often cut more effectiveness and value than cost.

It isn’t reducing cost that brings growth; instead, it’s smart investment and strategic allocation of resources that bring better returns, whether social or economic.

As Raymond Flandez writes writes in Philanthropy.com, though donors often have a visceral reaction against overhead, there are actually many reasons why overhead can be a good thing: the quality of the overhead/administration often determines the quality of the cause, for example. And sometimes, the overhead is the cause.

Nonprofits need to help their donors understand that charitable organizations have a lot in common with businesses. Dan Pallotta, a prominent nonprofit expert, told a group of charity fund raisers in New York.

“We don’t like to see a lot of people making a lot of money in charities,” says Mr. Pallotta, the keynote speaker at this week’s Direct Marketing Association’s New York Nonprofit Conference. People have a “visceral reaction” to the notion.

But nonprofit compensation should match or at least correspond to the salaries in the for-profit world, he says. For one thing, nonprofit salaries at the moment don’t attract the best and brightest. Why work as a chief executive for a medical charity at $230,000, he says, when others with the same MBA have salaries of $400,000 or greater?

Mr. Pallotta, the inventor of multiday AIDS Rides and Breast Cancer 3-Day events, says other items of neglect in the nonprofit world are marketing (there’s limited advertising), risk taking (fear of big fund-raising efforts), time (investment in long-term revenue growth), and expansion (since 1970, only 144 nonprofit organizations have crossed the $50-million revenue barrier; in the for-profit world, some 46,000 companies have.)

In addition, he considers this question from donors a “sinister” one: “What percentage of my donation goes to the cause versus overhead?”

Donors need to learn why that question is problematic, he said. First, it divorces “overhead” from “the cause.” It also forces charities to forgo what they need to solve problems, such as hiring an innovative new leader or tripling the fund-raising staff to increase long-term giving. Most important, this gives donors bad information. The high quality and service of a local soup kitchen, for instance, may be because of its investment in staff and equipment, not because of how it reports low-overhead costs.

Mr. Pallotta told fund raisers to stop using the word “overhead.” Instead, he told them to train donors and board members to ask how effective the organization has been in accomplishing its mission and goal for the cause.

Mr. Pallotta also suggested setting up an organization for nonprofits to defend their practices, create public awareness, spur a legislative force. and establish legal strategies against municipalities that require charities to meet a low overhead standard. The name he proposed for such an entity: the International Charity Defense Council.

If even God ordered a census, without one, non-profits worry about the consequences for charity.

The federal government announced on June 29, 2010 that they would be scrapping the mandatory long-form census, which  20 per cent of Canadians receive in a census year, now making it voluntary only. Read more…