From a fiscal perspective, nonprofit organizations in this country are enjoying an all-time high. Between 2000 and 2010, the number of not-for-profit organizations increased by 24 percent and inflation-adjusted revenue increased by 41 percent. Those numbers, however, obscure some of the disturbing trends that have been making headlines.
The Washington Post has created a searchable archive of the financial disclosures of more than 1,000 nonprofit organizations. The disclosures are mandatory for any diversion of funds totaling $250,000 or in excess of 5 percent of the organization’s total assets. Financial mismanagement, fraud and embezzlement have led to the loss of hundreds of millions of dollars from organizations like the Global Fund to Fight AIDS, Tuberculosis and Malaria ($43,000,000) to Tucson’s own Handmaker Foundation ($74,380).
Meanwhile, some of the nation’s most successful nonprofits, such as Susan G. Komen for the Cure, have turned their charitable status into a marketing platform that has become a cultural phenomenon. While the savvy branding of pink products during “Breast Cancer Awareness Month” each October has led to increased revenue, expenditures on cure-related research have failed to keep pace.
In this kind of environment, there is very little certainty that the donations you make will actually go towards advancing the cause you support.
While fraud and embezzlement are disturbing given the scale at which they takes place, they are typically perpetrated by rogue agents in these organizations — although it is reasonable to expect that administrative members in these nonprofits should have caught wind of many of these crimes much sooner. I, however, find the actions of organizations like Susan G. Komen for the Cure to be much more damaging.
The incredibly successful pink marketing campaign by Komen and other breast cancer-related groups — like the NFL’s official partner, the American Cancer Society — has led to a phenomenon known as “pinkwashing.” “Pinkwashers” are companies and organizations that exploit consumers’ charitable sympathies for profit.
For example, the NFL announced that a portion of the proceeds from all pink-branded products would go directly towards cancer research. A breakdown of the actual numbers revealed that for every $100 a consumer spent, a measly $8.01 actually went toward actual research.
Susan G. Komen outlines its platform as searching “for the cure.”
However, in fiscal year 2012, only 18 percent of Susan G. Komen’s total expenditures went toward research. A closer inspection reveals that, of that research, only 53 percent is actually geared towards finding a cure.
In 2011, despite revenue increasing by $100 million, only 15 percent went toward research. In the same year, CEO Nancy Brinker received a 64 percent raise. After public backlash against the decision, Brinker took a lower position in the organization — a full year after she said she would — with no decrease in her $684,000 annual salary.
Supporters of Susan G. Komen would be glad to hear that almost $1 million dollars of donor funds are spent annually suing smaller nonprofits over the use of the word “cure,” because nothing says “This is about curing women” better than “Get your filthy hands off our slogan!” And none of this addresses the issue of other companies adopting the pink ribbon as a logo without donating any proceeds towards cancer research.
Nonprofits were designed to enable enterprising individuals and like-minded donors to work together and solve important issues. Unfortunately, without economic transparency, it is up to the consumer to ensure that their money is actually going to the causes they support by demanding greater accountability from nonprofits.
— Max Weintraub is a senior studying creative writing and Italian studies. Follow him @mweintra13.
