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Nonprofits

“Kony 2012” and Our Capacity to Evaluate Public Charities

The general public and even the media, by and large, simply don’t have the experience, training, or tools to fully evaluate charities’ activities.

When they uploaded it to YouTube early last week, filmmaker Jason Russell and his Invisible Children nonprofit colleagues could not have imagined how quickly their “Kony 2012” video would go viral. The film spread like wildfire across the Internet, bringing unprecedented attention to warlord Joseph Kony and his Lord’s Resistance Army, which for decades have terrorized Uganda and the region.

Having produced several other films that attracted mere thousands of views, Russell and Invisible Children were thinking big and hoping to eclipse 500,000 views by year’s end, according to a CNN interview with the founders. Instead, in just over a week, their 28-minute film racked up more than 100 million views on YouTube and Vimeo.

Critics, meanwhile, have come out of the woodwork to scrutinize the motives, effectiveness, and operations of Invisible Children—providing a rare glimpse into the public’s understanding—and lack of understanding—of social change organizations. Most public charities, after all, operate quietly in relative obscurity. Those that are lucky enough to get some time in the spotlight often feel the burn—Greg Mortensen’s Central Asia Institute and Susan G. Komen for the Cure are two recent examples.

The general public and even the media, by and large, simply don’t have the experience, training, or tools to fully evaluate charities’ activities, much less on an ongoing basis. In particular, three aspects of nonprofit operations are quick to draw scrutiny in moments like these. The first is the percentage of funds raised that a nonprofit spends on overhead or administrative costs. The second is how a nonprofit's finances are monitored and tracked. The third is the primary method by which a nonprofit achieves or advances its mission.

Although scorned by donors and downplayed by nonprofits, overhead and administration costs are the glue that holds together nonprofit programs—from office space to percentages of salaries. To pretend such costs don’t exist or to marginalize them only shortchanges other aspects of an organization and its work, including fair wages for social justice advocates. Doing so also perpetuates false expectations on the part of donors. To be clear, there is no figure put on overhead costs in the IRS code pertaining to nonprofits. For decades, there has been an expectation that nonprofits should keep administrative costs to around 10 percent of operating costs, but the origin of that number is unknown, and any right or wrong number potentially sets a damaging precedent for diverse, sustainable, systemic social change work.

Most people outside the nonprofit sector have no idea where they might even get accurate information about a nonprofit’s finances. In fact, they need not rely on media hype and hearsay; they can turn to official reports made by nonprofits to the IRS—in the form of 990 tax filings via websites such as GuideStar.org. For their part, the IRS and organizations should make this information more readily accessible on their own websites, as Invisible Children long has.

The public must also understand that nonprofits employ a wide range of tactics to achieve their missions. Film campaigns and organizing efforts are the rightful bread and butter of some advocacy and educational organizations, including Invisible Children. Raising funds to aid partner organizations and research institutions is the domain of others—intermediaries such as the Komen Foundation. Doing on-the-ground work is the mission of a third class—the work of direct service providers. In all three categories, the IRS limits lobbying and advertising income. Yet in numerous instances, Invisible Children was critiqued for its lack of direct aid efforts, which have always been secondary to its advocacy and awareness-raising work, like “Kony 2012.” Given the success of the campaign, there’s no question what the group does best.

No matter how many hits their video amasses, both Invisible Children and the film are imperfect efforts. Also imperfect are the critics who started paying attention to the organization, established in 2005, only after its video went viral last week, and who continue to judge it based on ill-fit metrics. While Invisible Children’s film has effectively raised awareness of Joseph Kony in the United States—a world away from Uganda—the backlash powerfully illustrates the need for greater public literacy when it comes to reasonable evaluation of charitable work.

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COMMENTS

  • BY Aaron Hurst

    ON March 16, 2012 02:35 PM

    This reminds me of the great piece Bridgespan did on overhead costs.  Bottom line, most comparative companies spend a lot more on overhead. 

    From their report:

    “While for-profit analogies are by no way perfect benchmarks for nonprofits, they do provide some useful context in thinking about how realistic—or not—average overhead rates in the nonprofit sector are. An examination of 25 industries shows average overhead rates ranging from 13 to 50 percent, with the average across the industries being in the mid-20s. Only seven of the industries had overhead rates less than 20 percent (the median reported rate for nonprofit organizations), and among service industries (arguably a closer analog to most nonprofits), none reported average overhead rates below 20 percent.”

    Full report:
    http://www.bridgespan.org/nonprofit-overhead-costs-2008.aspx

  • BY Brian Audia

    ON March 16, 2012 03:54 PM

    Great perspective. Well said.

  • Janice M. Epstein's avatar

    BY Janice M. Epstein

    ON March 16, 2012 07:43 PM

    this was a much needed perspective.  thanks for helping me shape my conversations with others.

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