Centre On Philanthropy Responds To Criticism
Elaine Butterfield, Executive Director of the Centre on Philanthropy, has responded to recent criticism of non-profit operational costs, saying that the non-profit sector has “an important role to play” in tackling the “unprecedented challenges” that Bermuda is facing.
She also noted that the non-profit section generates some $70 million in revenue [or 1.1 percent of GDP] and employed approximately 900 people [or 2.3 percent] of the workforce in 2010.
Ms. Butterfield said, “The Centre on Philanthropy has viewed with concern the opinions of many with regard to how charities are spending their funds on operational costs.
“There can be no doubt that Bermuda faces unprecedented challenges, across all sectors of the community. There can also be no doubt that the non-profit sector has an important role to play; by working together with stakeholders including the government, the private sector and the community, we can get far more accomplished and be more effective at it.
“I question what would happen if non-profits were not available to assist the government with its social agenda and our community with our increasing need for human services support? Perhaps the following information can assist.
“Currently there are nearly 400 registered nonprofits in Bermuda. Beyond the critical role that they play in addressing social needs, their significance in the Bermuda economy is reflected in generating approximately $70 million in revenue or 1.1 percent of GDP and employing approximately 900 people or 2.3 percent of the workforce in 2010 [Bermuda Government Department of Statistics, 2011].
“The revenues generated in the form of grants, fees for services, and more are directly reinvested in the community via programmes, salaries and facilities.
“While everyone is indeed entitled to see this subject from their perspective, I challenge you to consider what has been shared and to walk a day in the shoes of Bermuda’s all too often unsung heroes. I am confident that many will be very surprised.
“I urge you to consider the contribution that non-profits make, and whether our real aim is to keep non-profits overhead low, or do we want to change our community for the better?
“Perhaps this is what is referred to as outside-the-box thinking, but consider for a moment the impact of a non-profit sector that is equipped to ‘actually’ make a difference and the effect and change that it would make in our community.
“The current mindset is to reward non-profits for what they spend [or how little they spend] rather than what they have accomplished in the lives of their clients and ultimately the community.
“In order to hire skilled professionals to offer the best possible services, even at a non-profit salary scale which is lower than the private sector, and run the operations of the service is costly. However it is also true that many of us are being paid below our skill-set by choice, because the work that we do is very rewarding and we have a desire to do it.
“Everyone is not willing or able to sacrifice for a non-profit salary and the immense stress of caring for others that is a natural part of the career. Like essential services, many who work in the non-profit sector do not work from 9.00am until 5.00pm and weekends and evenings are all too common and what it actually takes to get the job done.
“Some of the expectations placed on non-profits include:
- We are expected to conduct our operations according to best practice standards (and many do) while accepting less compensation than the for-profit sector
- We are expected to raise funds while spending as little as possible on advertising and marketing or not to advertise unless the funds are donated
- Although we are expected to conduct our operations ‘like a business’ we are frowned upon for overhead costs
- If we put on too many fundraisers and come up with innovative ideas, we are seen as operating outside of our scope
- We are expected to respond to the growing need created in our community by socio-economic trends, and increasingly be the first to be cut from donor budgets
“This idea that overhead is something that only for-profit organizations experience is very unrealistic and greatly challenges the effectiveness of non-profit organizations in some cases even more so.
“So the next time you’re looking at a charity, don’t ask about the rate of their overhead before you ask about the scale of need for their services, how they measure their progress, and what resources they need to make them effective regardless of what the overhead is. Consider how important the overhead is if some of our problems are actually getting solved?
“Now I am not suggesting for a moment that this should not come under guidelines. The new Charities’ Act, the Registry General and the Charities’ Commissioners all serve as regulators. The Centre on Philanthropy’s role is to provide support to the non-profit sector by providing them with the tools they need to maximize their overall impact.
“We provide training and education for capacity building, volunteer engagement as well as advocacy and community engagement on their behalf.
“If we can see the benefit to all of us in this thinking, then the non-profit sector can play a massive role in changing our community for all of our citizens most desperately in need of it to change. If we can work together as stakeholders along with the non-profit sector then we are talking about the potential for real change.
“But it will never happen by forcing these organizations to lower their horizons to the demoralizing objective of keeping their overhead low.”
Well said!!!
Efficiency does not mean a reduction in the service or the quality of the service recived by those who are beneficiaries of the charity.
In fact I’d go so far as to say, a more efficient charity delivers a better service and meets more needs of those who are the ultimate beneficiaries.
To dismiss overheads as it is what it is, when charities can pool resources and provide a better and bigger product to those in need is of benefit to all of Bermuda.
I don’t think the article grasps what folks are suggesting. See the bigger picture.
It is right and proper to ask these non-profits to account for there spending. No-profits seem to have become a “cottage industry” paying executive style salaries. This can’t be right. Donors are entitled to hole them to account and sure every dime is properly used for it’s ultimate purpose, not on salaries.
Thank you!
“…demoralizing objective of keeping their overhead low.” Really, is “demoralizing” the word you want to use?? Is it really demoralizing not to have a cushy office space in the heart of downtown? Is it really demoralizing to have to bring your own coffee to work? Shame on you for using that word.
Now, how about before we slam the government for not taking out loans to fund these struggling charities, we recall why you are now having to ask the government for money: the big donors have left the island! I won’t get into WHY they have left as we all know the answer. The issue is that charities got pretty comfortable when the big spenders were here to front some of their overhead. Maybe they rented a pricier office space, maybe they gave raises and bonuses that they might not have otherwise afforded…. Well times have changed and we must all adapt. Notice I didn’t say “tighten our belts?” That’s because we must do something more significant than just cutting costs. Charities need to PHYSICALLY ADAPT to their new environment. Getting handouts is not adapting. Adapting is reducing hours of non key employees, reducing the work week, reduce the number of hours the charity is open for business, working from home offices, instituting a sliding fee for services… Asking government for money or turning the lights out when not using them isn’t going to cut it in our new environment. We need to ADAPT to our new environment. Quit expecting money to fall into your hands – adapt to not having as much and get on with it.
Sorry, but salary expenses of a charity should not consume nearly 90% of the annual operating budget.
Even when nearly 100% of the services provided by that charity are delivered by real people? Programmes don’t deliver themselves – they require people.
There are 400 charities employing 900 people!!!!!payroll is eating expenses… assistance should not be so costly from charitites, more volunteers needed..appears to give and maintain certain people having a job whilst appearing to help others in need..hmmmmm I understand homes that may operate with charity assistance, including children and adults..It would be interesting to get a breakdown of all charities, who(job description)is employed and whether the charity should actually be taken over to a government department if it is so dire..
There are many valid points in the above article.
Charitable organisations do have overheads, which is something many people forget. This is especially true if they are providing professional services and/or have premises to maintain. Apart from salaries there is rent, utilities, maintenance, IT equipment, cleaning, security services, regulatory/legal/accounting fees, paper for printers etc. A multitude of mundane expenses, all of which cost money.
In addition some organisations, in order to service their demographic, may need professional staff. If they cannot attract and retain the quality of staff they need, they cannot meet the functions of the organisation. It is not feasible to run those type of organisations on a volunteer staffing basis – if indeed you could even find suitably qualified volunteers.
The donor community, particularly large corporate donors demand a high degree of transparency of the accounts of those organisations to whom they donate. In many cases, if they are repeat donors, they request itemisation of the use of the funds. The charities commission is also now enforcing more rigid requirements in terms of reporting.
While it true that there are organisations that may perform similar functions and that synergies may be possible with some, I do not think it is fair that blanket statements can or should be made about ‘executive salaries’ and improper use of funds. If you have reservations about an organisation that you wish to donate to, check their status with the charities commission.
In reality, there are many charities in Bermuda are providing essential services and in some cases, struggling to do so because people do not understand that there are costs that may not be immediately apparent.
OMG- you all don’t get it. Ms Butterfield is right these are unsung heroes who do much work for little pay. Name me just ONE ” exec style salary” @Cadrine Alice????
You don’t think 90% on salaries is right @Politricks??
For one why don’t YOU go see what the WRC or Centre for Abuse has to deal with on a daily basis via phone calls from victims.
Trained people are needed to counsel them not just volunteers.
Who is to answer the phones, robots?
Most of their work is advisory.
How about Meals on Wheels- dozens of
volunteers come nearly every day to deliver- but who cooks and adheres to food safety standards??
You can’t rely on just volunteers to plan menus for 100s every day and stretch food budgets wisely. You all need to go volunteer to see how these charities operate as there seems to be a misconception that they can survive by volunteers (who are not always reliable and can take off whenever they want) running them…You want thousands $$$ in the hands of volunteers with no accountability…yeah that’s a better idea.
Charities do not generate “revenues”. They produce a service for which they generally do not charge a fee….The receive donations from persons / entities who have earned these monies as “revenue.
There are many charities that are doing good work in Bermuda however there are some that are just smokescreens for bloated paychecks. Time to weed them out! “The lady doth protest too much, methinks” Hamlet by William Shakespeare.
The center on philanthropy has a very tight focus on enabling the nonprofits by coaching them in their financial and regulatory housekeeping and facilitating their fundraising. By inserting a layer of what can only be called Professional Bureaucracy into the charities sector they have not only added appreciably to the ‘Overhead’ of the sector itself but have also lead by example – a bad example. There has been a clear shift in Bermuda’s charitable sector in the last 10 years toward charities being taken over by ‘new management’ who take much larger salaries, work out of much more lavish premises, have many more assistants and raise much more money at much more lavish events to pay for it all. Thing is they don’t deliver much more help to many more people; they often barely manage to actually accomplish the same effect as they did under the previous, much less sophisticated, management.
What the center on philanthropy SHOULD focus on is developing a metric and an audit system that allows donors to see through this kind of smoke. They should require any of their associated charities to, among other things, commit to being performance-audited by them and to the publication of the audit results. In addition, since most of these charities solicit public donations, the positions and remuneration of every paid employee and service provider should be published as should any expenses over 5% of total expenses. By doing this the center would bring greater transparency to the entire system and lead in the right direction.
If there are charities which really do need higher salaries or higher overheads then let them explain this openly and honestly and not try to hide it behind smoke and mirrors.
I have personally stopped contributing to a few charities after watching them become more about being charitable organisations than providing helping services. Instead I donate to the charities who are still running on a shoestring and delivering to the maximum of their ability. But that is just me.
Sargasso
Some good suggestions here!
Things are truly sad in this island. It seems like every week people have a different “beef” with somebody. Right now the fangs are out for the charities, who should be receiving all the support they can get.
The people in this island remind me of a bunch of fish in a crowded bowl turning on one another.
Charities used to be run by volunteers. Now many charities are run by paid employees like the USA. I don’t donate to charities unless they have large number of volunteers. Suggest others do the same. International Business now contribute more than 90% of the $70M mentioned above. If they stop donating almost 900 people would be unemployed.
@Self: At the end of the day I do not like to see anybody trying to take advantage of the system. Charities included! The fangs would not be out if they were doing the right things that they were meant to do.
Surely it does not make sense that people should not get paid just because the organization they work for does things that are beneficial to the public, while those that work for organizations focused on selfish goals get to reward their staff with high pay.
The work done by charities in Bermuda requires skilled, trained experts, who deserve to be paid for the services they provide. Many charities operate through the activities of their staff, with little extra material expenses . Think of emotional care or the culling of invasive plants; these activities require hard work but little else. This means that salaries must represent the bulk of the expenses of charities that do these services.
How very philanthropic for yourselves… and you still require volenteers to dothe grunt work? You guys are smart…getting paid executive salaries. People donate the money, why not volenteer your expertise if you are so “gung ho ” to help others?
Just another self enrichment, self gratifying career opportunity… enjoy!
Unfortunately the REAL purpose of many ‘charities’is to primarily ‘enrich’ their executives+friends! They raise funds by playing on peoples desire to help the TRUE ‘needy’–who only receive a small portion of the contributions! Even unpaid charitable volunteers are often poorly treated+ UNappreciated-ergo their decline Sad!!