Give Me Knowledge, Not Numbers
6 July 2017 at 8:10 am
A successful and transparent charity delivering on its purpose should not be sucked into discussions about whether it should be spending 10 per cent or 15 per cent on its overheads, writes David Crosbie, CEO of Community Council for Australia.
“SOCRATES: What, Lysimachus, are you going to accept the opinion of the majority?
LYSIMACHUS: Why, yes, Socrates; what else am I to do?
SOCRATES: And would you do so too, Melesias? If you were deliberating about the gymnastic training of your son, would you follow the advice of the majority of us, or the opinion of the one who had been trained and exercised under a skillful master?
MELESIAS: The latter, Socrates; as would surely be reasonable.
SOCRATES: His one vote would be worth more than the vote of all us four?
SOCRATES: And for this reason, as I imagine–because a good decision is based on knowledge and not on numbers?
MELESIAS: To be sure.” – The Socratic Dialogue: Laches by Plato
Not everyone can run a charity effectively, particularly charities that employ people and deliver various programs and services. Running charities requires a level of skill, experience, capacity.
Unfortunately, there are many who would seek to undermine and diminish this knowledge.
I am not sure what is gained when charities seek to appease ill-informed commentators and experts-for-hire touting their econometric models, many enthusiastically pointing out that the numbers are wrong, and eagerly telling charities how they could and should do their work better.
I used to live on a dead-end street set on a peninsula surrounded by a river. There was one narrow road into the area which became very busy during peak hours. Many of my neighbours campaigned to have a bridge built over the river to end the daily gridlock and open the peninsula up to the wider world. The campaign was unsuccessful.
What if we decided we would just raise the money ourselves and build our own bridge? What if we collectively pooled all the building materials and tools we had, combined it with the money we raised, and just started building the bridge ourselves? How hard can it be? Put a huge amount of concrete in the ground, put in supports, run big steel girders from one side to the other, more concrete. I have successfully run a multifaceted charity and national peak bodies in mental health, and alcohol and drugs, surely, I could work out how to build a bridge?
The reality is that building a public bridge is a complex project requiring expertise, skilled surveying and engineering, planning and careful execution by a range experts and experienced tradespeople. You can’t just build a bridge.
In my experience, there is a similar reality about the kinds of services and supports provided by many charities and not for profits. Most of the major programs run by charities also need careful planning and execution by people with expertise. They require knowledge.
When my taxes are being used to build a bridge, I am not able to demand that a certain percentage be spent on the road surface or the geological surveys. I have to leave these decisions to those who have the knowledge and experience, and rightly so. I want the bridge builders to respond to the needs of the community by building the best and safest bridge possible, and provide value for money in delivering that outcome. I might express my opinion about what I would like from a user perspective, but I leave up to the experts the critical decisions about how they can best deliver the desired outcome.
If I want to support more remote Indigenous students to complete secondary education, or, help homeless people to secure sustainable accommodation, or, ensure more people in Africa have access to safe drinking water, I want the best possible programs to deliver these outcomes, and to provide value for money.
A successful businessman, a lucky investor, or a medical specialist, may have money to contribute towards a special program, or even to build their own bridge. That does not make them knowledgeable or an expert. I would no sooner allow a businessman, investor or medical specialist to build a public bridge than I would allow them to tell specialists in charities how best to deliver their outcomes.
Everyone is free to have an opinion, but charities need to be informed by real knowledge and expertise about what is going to deliver the best outcomes for the communities they serve. This is not about opinion, but about evidence, experience, knowledge.
Recent debates about charitable fundraising, about how much is being spent on infrastructure, administration or promotional activities, about the need to better audit charities and their activities are all part of the same agenda to have the charities sector engaged in a discussion it can never win.
If ‘Charity A’ spends $100 on fundraising, and raises $400, has it done better than ‘Charity B’ spending $2 million and returning $4 million? What if the $400 was returned in the first year with no further return. What if the $4 million was returned over five years with losses in the first and second years, $1.5m surplus in the third, $1.3m in the fourth and $1.2m in the fifth? I could do numbers. Charity A achieved a 75 per cent return in the first year. Charity B made a loss in the first year. Charity B only returned 50 per cent on the fundraising investment, but ended up being able to offer $2 million worth of additional new programs that made a difference. Charity A offered $300 worth of benefit. Is one better than the other?
These arguments are just as unwinnable as a bridge builder engaging in a debate about the amount of money spent on geological surveys for a bridge. Sometimes you need to spend more, sometimes less, it all depends on what you are trying to achieve and over what period.
There are two fundamental interrogations all charities should publicly account for: the first is about transparency. Is the charity transparent about all it does, its expenditure, relationships and engagement with its communities? Are there clear and transparent policies, governance, and decision making?
Transparency is the foundation stone of trust, the antidote to suspicion. It is the light that ensures personal interests, financial advantage and misuse of resources cannot go unnoticed.
The second fundamental area of public accountability is fulfilment of purpose. A charity may claim to be delivering certain outcomes, but is it? Does it really make a difference? How? Does the charity acknowledge their failures and their successes, what has been learned, what has been achieved?
A successful and transparent charity delivering on its purpose should not be sucked into discussions about whether they should be spending 10 per cent or 15 per cent on its overheads.
It should, however, be very strong in arguing how it delivers real outcomes, achieves change and has a positive impact in the communities it serves.
If people are donating money to a charity to achieve a purpose, they want to know the money will be used in the best possible way to deliver the outcome they support.
The strength of the charities sector is not in having zero overheads, or being able to produce audits that indicate high levels of specified activities or outputs. The strength of charities is that they have the knowledge to deliver real outcomes to the communities they serve. This is what we need to focus on and talk about. This is what counts. Anything less is just numbers.
About the author: David Crosbie is CEO of the Community Council for Australia. He has spent more than 20 years as CEO of significant charities including five years in his current role, four years as CEO of the Mental Health Council of Australia, seven years as CEO of the Alcohol and other Drugs Council of Australia, and seven years as CEO of Odyssey House Victoria.
David Crosbie writes exclusively for Pro Bono News on a fortnightly basis, covering issues of importance to the broader not-for-profit sector.