Study finds nonprofits not reporting fundraising expenses
May 23, 2012
A recent study by Scripps Howard News Service suggests nonprofits might not be properly reporting all of their fundraising expenses. Out of 37,987 nonprofits that earned more than $1 million in fundraising, 41 percent said they did not spend any money to do so.
If this report is accurate, it would mean grant solicitation, phone calls, face-to-face meetings, advertising and mailed communications didn't cost the 15,389 nonprofits anything in materials or labor. Yet, these organizations managed to raise $116.7 billion.
"It is ridiculous to think an organization could raise significant amounts of money without spending money to do it," said Robert Ottenhoff, president and CEO of the nonprofit oversight group GuideStar. "I must be doing something wrong. I've never seen it growing on trees."
When the figures were brought to the attention of the organizations, some responded that their workers were volunteers who were not paid a wage for their efforts, and therefore, didn't cost the nonprofits a thing. However, others admitted the reports were being compiled to reflect lower overhead costs with creative accounting, or blamed the inaccurate reports could be the result of on outdated financial management practices.
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