Editorial: The King, the Duke, and who gets the money

From ANIMAL PEOPLE, January/February 1996:

North Shore Animal League president John Stevenson spends more money on animal
sheltering, neutering, and adoption promotion than anyone else ever. He spends more,
too, to help other animal shelters, through North Shore’s Pet Savers Foundation subsidiary.
To support $33 million a year in animal rescue work, Stevenson further spends $10 million on
fundraising––more than any other hands-on animal care organization.
Stevenson strongly favors donor accountability and strict public oversight of
fundraising, to ensure that charities do the work they claim to be doing. The North Shore and
Pet Savers IRS Form 990 filings are among the most detailed of the many we monitor. But,
as a nationally respected expert on nonprofit law long before assuming his present post, who
spends much commuting time contemplating how to make charities in general more honest,
Stevenson admits to being perplexed by donor attitudes. The most important number in the
annual ANIMAL PEOPLE charts on animal protection spending, he believes, should be not
the percentage of receipts an organization spends to raise more money, but rather the amount
of money actually spent to fulfill charitable purposes.

“What does it matter to donors how much we spend on fundraising,” he asks, “if we
can put another million dollars into it and get back two or three million extra to spend on programs?
Even if there is a diminishing rate of returns on additional fundraising expenditure,
above a certain level, if your programs are effective, shouldn’t you be spending as much as
you can to advance them?”
Massachusetts SPCA vice president Carter Luke asked a similar question several
years ago concerning salaries––in essence, paraphrased, “If we do the job people give us
money to do, who cares how much anyone gets paid?”
From the perspective of nonprofit organization heads, spending more money to
make money only makes sense. Paying people well to get the job done, at least as the organization
perceives the job, may also make sense.
But for six years now, donors have responded to our annual publication of the budgets,
assets, and salaries paid by leading animal protection groups with shocked outrage. “I
need to know which executives are getting the money I contribute,” writes Camilla Adler of
Bronxville, New York, speaking for many, “and I need to know more.”
It may be that the organizations spending the most on fundraising are able to spend
more on programs, though unlike North Shore many do not, and it may be that some highly
paid executives justify their salaries, in business terms, by raising more money than anyone
else. Business as usual, however, is not what donors expect of charities, which are granted
tax exemptions because, presumably, they operate free of self-interest for the public good.
The operative phrase here is not “for the public good,” but “free of self-interest.”
Many and perhaps most people working in for-profit businesses also work essentially for the
public good, albeit motivated by self-interest: the builder, the baker, the tofu maker, the
doctor, the lawyer, and the chief executives of the corporations providing our food, clothing,
and shelter. Providers of information, transportation, health care, and entertainment include
a mix of nonprofit and for-profit institutions, often differing from each other only in the
degree to which they can attract self-interested investors. Non-profit organizations enjoy special
privileges in our tax code not because they uniquely do socially beneficial work, but
because they purport to do work from altruistic motives that would otherwise not be done.
When donors contribute to a nonprofit organization, they expect to see altruism in
action. If they see self-interest instead, if they see business as usual, they have every reason
to begin thinking of nonprofit institutions as businesses like any other, to stop sending gifts
and making bequests, and to start demanding the repeal of tax exemptions. Donors also have
every reason to become cynical. We’re now often hearing two questions that once seemed
unthinkable––and we’re hearing them from longtime stalwarts of animal causes:
• Did major environmental groups actually encourage conflicts leading to the possibility
the Endangered Species Act might be dismantled just to have a good fundraising issue?
The obtuseness of some groups in steadfastly promoting punitive enforcement instead of
incentives for compliance seems otherwise difficult to explain. Certainly the belligerent antiESA
attitude of much of the present Congress has boosted environmental fundraising out of
the prolonged funk that followed Earth Day 1990.
• Are some self-proclaimed humane advocacy groups knowingly promoting policies
that perpetuate pet overpopulation, to keep themselves in business? Judging by the peeved
response of certain organizations to early neutering, low-cost neutering, mobile clinics, highvolume
adoption, off-premise adoptions, neuter/release, breed rescue, feral cat rescue, and
the no-kill initiatives of the North Shore Animal League and San Francisco SPCA, continuing
years after each tactic has proved itself, and considering those same perpetually nay-saying
organizations’ emphasis on fundraising, it is hard not to wonder.
Finally, when nonprofit institutions seem to act from self-interest more than altruism,
altruists are more easily inspired to form their own institutions––and so are the self-interested,
attracted by the prospect of tax-exempt easy money. While the altruists struggle to do a
lot with little, fundraising according to need, the self-interested just raise funds fulltime,
diverting out of the cause an ever increasing share of the donated resources.
As Mark Twain allegorically predicted in Huckleberry Finn (1884), which appeared
at about the same time as organized philanthropy, would-be Kings and Dukes with bogus
hard-luck stories steal aid from widows, orphans, victims of injustice (Jim) and abused children
(Huck himself), as well as from animals, the favorite cause of the mother of Twain’s
real-life model for Huck (the son of a freed slave whom Twain remembered in his 1874 sketch
Sociable Jimmy). The frauds reassure any who recognize falsehood that their lies told are told,
after all, in the interest of encouraging the soul-redeeming faith of the defrauded victims.
When the self-proclaimed Humane Society of the United States can raise funds for
41 years without ever either sharing the wealth with or being accountable to the hands-on
humane societies that many donors think HSUS represents, when the so-called American
SPCA can do nationwide solicitation while doing no sheltering and little cruelty investigation
outside of New York City, and when the equally self-designated National Humane Education
Society’s educational efforts consist almost entirely of flyers tucked in with direct-mail
fundraising appeals, what ethical standard is to discourage an Ann Fields of Love and Care
for God’s Animalife from not fulfilling her own real and implied promises to donors? When
the chief executive of HSUS receives a salary and perquisites comparable to those of the
President of the United States, what mores tell an Ann Fields that she isn’t to divert donations
to enjoy comparable luxury?
Mark Twain saw to it that through Huck’s intercession, the King and the Duke were
tarred, feathered, and ridden out of town on a rail, while their victims were at least partially
recompensed. Ann Fields died at age 49 of a heart attack, perhaps brought on by her own
self-indulgence––but her victims won’t recover one cent, and her family may continue the
questionable practices. We’ve meanwhile heard from several one-time major donors to Fields
who are themselves now indigent, after having given Love and Care and other animal-related
non-profits hundreds of thousands of dollars.
How you get cheated
Gullible donors are certainly responsible for much misdirection of funding. But that
is not to say such donors deserve blame. Donors understandably like to believe there is a carefor-life
haven somewhere looking after all homeless animals––and like to believe it so much
that many don’t ask hard questions. Donors equally understandably like to believe there are
simple solutions to complex problems. And donors, fortunately for legitimate charities and
the beings they help, like to respond to a sob story by writing a check and feeling better.
Donors are by nature kindly people, who mean well and have difficulty believing
that others who claim to feel as they do may be scheming crooks. Many have great difficulty
even looking at pictures or written accounts of suffering. They just flip over the form letter,
give the amount the “love card” asks for, and rush the check off, hoping to end the misery or
at least get it out of their minds.
Of course that isn’t what happens. The more checks the donor mails, and the more
promptly in response to solicitations, the more solicitations arrive. The donor advances to the
“frequent donor” and “high donor” lists: the prime targets. Pitches become more sophisticated.
Telemarketing requests join direct mail. On average, about two-thirds of a donation made
in response to direct mail actually goes toward programs, but typically only one third of donations
to telemarketing go into actual charitable work. The rest finances even more fundraising.
Because there is an inherent upper limit to donors’ ability to give, the total amount
of money received by charities in a particular field tends to rise to a ceiling and then holds
even. Thereafter, charities fight ever harder for shares of that relatively fixed amount. The
ceiling in animal protection, in inflation-adjusted dollars, year after year, comes to between
0.9% and 1.1% of all U.S. charitable contributions. Organizations that don’t aggressively
compete for a share tend to be starved out, rewarding aggressive solicitors at the expense of
those who solicit according to need. Over the past six years we’ve seen several one-time
major national animal protection charities virtually disappear, through a variety of circumstances
that disrupted fundraising for a year or two, while the gap in wealth between established
charities that fundraise as necessary and those of equal age that fundraise at maximum
capacity has more than doubled.
The most encouraging sign for the future of animal charity is recent growth in incorporations
of local and special-focus groups, mostly engaged in the hands-on work that the
majority of nationals long since abandoned as unprofitable––in disregard of their implicit
mandate to do what is unprofitable, if they are to be tax-exempt. If local and special-focus
groups only compete with each other for funding, of course, the poor will continue to struggle
as the rich get richer; but if they compete successfully for the funding that ineffective and
wasteful nationals currently suck out of their respective communities, much more can be done
with the limited donor dollars.
First, though, donors must learn to give with deliberation. Compile a list of which
charities you support from a year’s worth of bank records, and tally up how much you’ve
given to each. Most animal protection donors we know who have undertaken this exercise
have been shocked to see how far their actual patterns of giving are from their intentions.
Most find themselves unwittingly rewarding those who send the most frequent solicitations
with by far the most money, even if all the individual gifts are small. Most are also surprised
to find out how much money they are giving––and how little of the total actually goes to the
charities they most like. Often donors tell us that the mere exercise of listing their donations
inspires resolve to change their donation patterns, because they have discovered for themselves how certain organizations’ appeals deceive them.
Whatever your animal protection goals, your beliefs about tactics, and your philosophy
about how humans and animals should relate, you can only help the cause by tempering
impulsive generosity with deliberation. Be generous; give more if you can; but make sure
you’re truly rewarding the conduct you wish to encourage.