Conventional wisdom suggests that the effectiveness of a charity or nonprofit group would be judged by their charitable donations, or in other words, on how donors’ money is actually spent to further the organization’s charitable cause.
But there are some who take a different approach to evaluating charities. These individuals believe that charities and non-profits should be evaluated more like a business, and that they should spend more of their money on overhead. The argument here is that charities that spend more money on their overhead give themselves more and better resources through which to carry out their charitable work.
Should charities be evaluated by the amount they spend on their own resources or on their charitable work?
Daniel Borochoff, founder and President of CharityWatch, a nonprofit organization based in Chicago that rates and evaluates charities for donors.
Dan Pallotta, founder and President of the Charity Defense Council, a nonprofit based in Cambridge, MA that believes charities should be judged by their impact, not their overhead.