This has been doing the rounds this morning, and if true, this is appalling! While it's great to help in the future, the financial need is immediate to get people to their feet and rebuild.
https://www.news.com.au/finance/business/charities-slammed-a…
Keen to hear other thoughts, and also interested to know what "long term to recover" really means
people donate with the expectation that it would be passed on now
I personally donate with the expectation that the experts at the charity know better than me.
If people really wanted to ensure their money was passed on immediately, should they have not read the charity's plans to confirm that?
maybe if the businesses and farmers got the stimulus now, they'd be in a better position down the track and not need help later.
Maybe. Maybe they'd blow the "extra" and need help again anyway, or maybe they would have managed to be ok down the track with a smaller stimulus and someone else missed out completely. Very hard call to make!
Expectation for those generous donations is to be passed on now and get people on their feet and back to their daily lives VERY QUICKLY.
the charity know better than me.
Looks like the charity expectations and peoples expectations aren't aligned. Those charities had no plans during the bushfires detailing what they will do with anything donated.
Imagine the apoplectic rage from News and co if they found out a charity gave money to a scammer due to not having a proper vetting process in place… It takes time to do things right.
Due process and due diligence.
It's nice to think that we can suspend formalities and save the day however, those formalities exist for a reason.
In times of crises, we can suspend our caution but there is a constant, something that never changes - criminals do not suspend their activities, much less when opportunity is plenty.
PS. I am privy to information on insurance claims within the bushfire. Criminally fraudulent claims (ie. Methlabs that burnt down ages ago) and opportunistic fraud (ie. crappy shed claimed as fully serviced colorbond sheds) are plentiful and I'm not talking plentiful in number alone but also by percentage of claims.
I have aired my concerns regarding actual final destination of charity funds and it was always dismissed or even attacked.
Any deals that are affiliated that claims to be an NPO or charity needs to show proof of NPO status.
If you think that large charities not forwarding the correct sum is the end of it, you would be appalled by what happens in the unregulated territory.
I have aired my concerns regarding actual final destination of charity funds and it was always dismissed or even attacked.
A lot of people are sheep and there is no more freedom on speech and expressing your opinions. Welcome to 2020
TBH, nothing has changed. There are more ways to air an opinion and equally as many new ways to suppress those opinions.
Point made.
But the final destination of my donations remain unchanged. In my case, Red Cross and Salvation Army were the recipients. They have my donations.
I donated on the basis that these two bodies have the experience and the infrastructure to assist those in need during and after the emergency.
Both have overheads; I completely understand that.
Both also have contingencies in place so that they can act immediately as required, rather than having to wait for funding to come in and then act.
Fair enough. If your intention is to have a third party commandeer your contributions, that's a completely legitimate view.
As soon as you've made your donation to an organisation, you have indeed helped said organisation.
Many people do not share the same views. Their primary interest is in assisting a particular group and perhaps, a secondary to that may be to help an organisation. In these instances, many would view buying a t-shirt as a legitimate avenue to donate…
…except that these retailers could just pocket the entire "donation" either through blatantly withholding the sum or through creative accounting.
I agree with you and abb that when I donate, I trust the charity to know how best to apply the money - otherwise I wouldn't be donating to them.
Having said that, not everyone donates with the same mindset or expectation, and this is likely an expectation management and informed choice issue, than a serious worry (as far as the Red Cross and the Salvation Army are concerned) that the funds would not be properly applied.
In addition to that just personally (and even then not affecting my donation choices), my own awareness of bureaucratic inefficiency and statistical fallacies make me wonder about if there are better ways to use the money and if so the required modelling and analyses have been done.
E.g.:
I've no doubt that communities will take years to fully recover from the bushfires and that it's good to save some of the funds for contingencies and unexpected needs down the track, but I wonder if spending/releasing more of the funds now might accelerate the recovery and allow the same communities to be self sufficient and able to meet those needs themselves instead of needing contingency funds.
Better messaging and a more solid and transparent plan of spending and budgeting might blunt the negative publicity and pushback this is now having, and could lead to better donation outcomes for future disasters whereas now, some people might be less inclined to donate in the future or to these larger (more reputable) charities,
Just lastly, you also have to balance the charity knowing better and applying the funds in the best way possible, with respecting the wishes of the donors, even if those wishes may be sub optimal application of the funds.
I couldn't agree more, especially with number 2. A lot of planning and consideration has to go into managing and spending the donations. Donations for Koalas (and related animal welfare) alone have made millions from worldwide contributions. It's a good example of how the raised money should be spent over many years, as you cannot make immediate results with all of that money.
For the few weeks that donations have been pouring in, it would be great to see action from the charities in the form of a plan of spending from those in charge.
A good reason why this isn't done is that people just won't understand, and the amazing amount of scrutiny they would get, especially from people who have no experience in the industry the charity is working for. Negative feedback counters the progress.
I do believe that there are people involved in the handling of the donations and the planning that have the skills, capacity and compassion when making a long-lasting and efficient spending plan for the donations.
Better messaging and a more solid and transparent plan of spending and budgeting might blunt the negative publicity and pushback this is now having, and could lead to better donation outcomes for future disasters whereas now, some people might be less inclined to donate in the future or to these larger (more reputable) charities
I'd like to agree with you here, but for some people, seeing the transparent facts like 'charity pays its employees market rates for their high quality work' gets their jimmies rustled. See comment from 'Ocker' below, for example.
There's an obsession amongst some donors with keeping the administrative spend component as low as possible, even though no for-profit business acts this way. If a corporation could spend $1 in marketing and receive $1.15 in expected sales, they would be lambasted for not doing so. Meanwhile if a charity spends $1 in marketing for an expected $1.25 in donations, they get slammed as wasting money.
@abb: I haven't made my mind up on this point because… yeah. For a business, the entire point is to make money, so a 15% ROI would be crazy. For a charity, outcomes I think matter more, and apart from hindsight, the easiest metric might be dollars-spent-on-cause.
So as an extreme example:
Business: spends entire budget of $100k on marketing, makes $115k - good outcome.
Charity: spends entire budget of $100k on marketing, makes $115k, but $0 spent on the cause - not as good an outcome.
On the other hand, you're absolutely right and true that charities are going to compete with businesses for a lot of things, such as talent, publicity, people's discretionary income, and cheaping out on that (especially executive remuneration which is an easy target, but can pay incredible efficiency and revenue returns) is counterproductive.
But even on top of that, there's the feel-good component. People donate partly to feel good. Knowing that your dollars went to a bus billboard (for example) doesn't feel as good as it going to buy a toy for a now homeless kid, or feed for a struggling farmer. That emotional aspect will play a part, and needs to be balanced by charities too.
All in all - TL;DR I don't envy what the charities have to deal with.
@HighAndDry: This TED talk changed my mind on the topic. I say this as a person who has watched approximately one TED talk in the past 5 years. And who, now reviewing the transcript, kinda wishes he had an MBA from Stanford.
(I remain unconvinced that huge executive salaries are justified in any case, but that's a whole nother thing)
Completely agree that it's a difficult position to manage. I think the diversity in charity organisations gives us a kind-of reasonable trade off though, each charity can choose where to position themselves on the spectrum. Then people who get a boner on lean margins can donate to the guy who drives his own food truck around feeding 100 people in his town every Tuesday, and people who get drawn in by glitzy ads can donate to the non-profit megacorp who feed 500k people every day globally.
It is well known that some charities have high “administrative” overheads. That was the issue with Shane Warne’s charity. If the administration costs are associated with actually delivering a good service, e.g petrol for volunteers cars, then OK, but if it is used to provide a top heavy bunch of paper pushers maybe not so much. That said, the money does need to be used wisely, and to the people who most need it, so the requests do need to be assessed properly. If the money is needed now, it should be spent now, but how many of the examples are due to logistics during an emergency and how much is “holding back”? What we are seeing is a massive disaster zone and a bunch of disparate charities with competing interests, all of which have administrative overheads. In these situations there should be a central agency, that assesses what needs to be done, and the priorities, and the money to be provided where, and as, needed. Currently, what is to stop a bushfire victim shopping his need for “relief” to several charities? I’m hoping we are better here but one of the problems of some overseas charity donations is “siphoning off”. I think, my main issue, is why are we depending on charities to do what Governments should be doing. I wonder how many “tax cuts” went on donations?
"…there should be a central agency…".
I fully agree, and that central agency should have already been in place, and ramped up to a state of readiness to act prior to the warned bushfire emergency, and kick in as soon as the situation warranted it.
I also couldn't understand why we had Federal politicians encouraging individuals to donate to charities to help.
Completely disagreed. You can't have "avoiding high administrative overheads" in the same sentence as "federal oversight agency".
It's not even just the usual "government is inefficient" spiel, which would also be true, but that there are laws and regulations for government spending of money, including audits, paper trails, consultations processes, etc that exist for a good reason when it comes to public money, but which would be ridiculously overwrought red tape as it comes to charity spending.
There is absolutely no reason why Federal Governments can’t be as efficient as private industry. That is the perpetual lie that is out there. I’m so sick of that rubbish. I’ve worked for Government departments and large private industry and they are, basically, indistinguishable. If anything Private industry is worse because you have to take the dividends to pay the shareholders out of the pie as well. You really think that charities shouldn’t have the audit trails etc when they are dealing with 100s of millions of dollars? The overheads of having administrative infrastructure over the top of all the smaller organisations would dwarf any Government departments. The big thing the charities have is they marshal a bunch of people who donate their time, as well as their money. Outsourcing is the huge lie that has been sold to the public and we are seeing this come home to roost all over the place. Privatise the profits and socialise the losses.
There is absolutely no reason why Federal Governments can’t be as efficient as private industry.
Governments spend public money and have effectively unlimited funds.
Private businesses spend at most shareholder money and must report to those shareholders regularly.
These differences mean that governments must be subject to more strict regulations and oversight. In addition, they also mean governments have less incentive to be inefficient. Companies can run out of money, governments can't. Politicians can be voted out, managers and executives been be fired, government bureaucrats really can't be.
So lots of reasons, really.
@HighAndDry: Those are reasons for what might happen not examples of what does. Charities are using the money they have been donated by the population and should be subject to stringent supervision on how the money is spent; especially when they are dealing in 100s of thousands of dollars. This sounds like an even better reason why Government should do this work, it is being monitored better already. Governments can, also, run out of money it just takes longer.
@try2bhelpful: I also neglected to mention that other difference between private companies or charities, and the government.
That of course being the fact that every dollar given to companies and charities is given voluntarily and bad behaviour is easily rectified by people not giving any more money, while people don't have that option with government.
To put it simply: governments have more power, therefore they have more responsibility, therefore there need be greater oversight to ensure they're properly meeting those responsibilities.
With great power comes great responsibility (and bureaucratic oversight and inefficiency).
@HighAndDry: We don’t have a lot of transparency with Charities. Unless the issues are being highlighted then people will, continue, to give them money without knowing what they are really like. Given how “loosely” this all hangs together there should be greater management than there is. The real problem I have with Charity is the sense of deserving, and undeserving; this is why all this should be Government managed. People have entitlements not begging for other people’s good will. There is also the aura of the “saintly” about charity people so they aren’t questioned. If you really want to see the dark side then look up “Jimmy Saville”. Charity is not the best way to deliver services to people.
People have entitlements
I feel we're probably going to violently disagree on that these entail.
Disaster recovery really isn't a government responsibility except as it comes to public utilities and assets.
E.g.: If your house accidentally burns down because something short circuits, you go to your insurance not the government.
If someone steals all your food, you go to your insurance (or more likely the supermarket or family and friends), not the government.
Just because it happened on a wider scale here doesn't really change the underlying principle that government isn't responsible for your private property.
This is where charities come in - private citizens can choose to help others, even with their loss of private property, despite having no obligation to do so.
@HighAndDry: You can disagree all you like but it doesn’t make your version true. The whole issue with a disaster is that everyone around you is also in trouble. Not only is your house gone, your neighbours house is gone, your livelihood might be gone as well. It is hard to go the supermarket when yours doesn’t exist anymore. It takes longer for the insurance companies to do your claim because they are dealing with thousands of others. You really think people in these situations should be left to the capricious whims, and capabilities, of a bunch of random charities? Our Government has a duty to best serve its citizens and it is up to us to hold them to it. Avoiding tax to pay a charity “tax” is, frankly, nonsense. We would be better for the Government to work on prevention than trying to mop up afterwards but, if we are mopping up afterwards, this should be done by well coordinated services with a duty to fix issues rather than hoping some random charity can get it right.
I also couldn't understand why we had Federal politicians encouraging individuals to donate to
charities to help.their own political party…
FTFY…
Charities like Red Cross are very experienced in dealing with disaster relief. I'd say they know what they are doing and it's not up to the outrage brigade to come out and point fingers and try and lecture how they should allocate funds or how quickly they should spend it.
The Red Cross say that aside from the hundreds of volunteers working for them, they have dedicated 30 employees to the task and set aside $5 million for "administrative cost" - that works out at around $165,000 per employee
they have dedicated 30 employees to the task and set aside $5 million for "administrative cost"
Firstly, you haven't established that the $5M is to be used only for those new employees.
Secondly, even if that $165k number is correct, it includes overheads (rent, electricity, office furniture & equipment, interviews, uniforms, payroll admin, etc etc.). The employees average wage is lucky to be half that.
Source: I used to charge internal customers 3x the rate I got in my payslip.
Not sure what your point is? Are you trying to imply that all of that all administrative fees are spent only on the salaries of those 30 employees?
Surely that cost would take into account a lot more than just wages for 30 people..super, paperwork, account keeping, etc.
they have dedicated 30 employees to the task and set aside $5 million for "administrative cost"
Source?
Red Cross spokesperson on radio this morning!!
Cant earn interest on $380 million if you just start handing it out to people who need it…
And of that donated money, only about 10% will be released as the rest of it will be used up in "ongoing administrative costs".
This is why I never donate cash. I always donate food, water, my time or resources, but I never give cash to these thinly veiled corporations "charity organisations".
Best to go out there and spend money in fire affected communities. Worked for two charities at different times in my life. The amount of wastage would turn you off giving to charity.
This article was just frightening when I saw it.
https://www.dailytelegraph.com.au/rendezview/be-careful-with…
Those charity collectors will take more than 90% of the donations for the first year as their fee/commission.
Big charities use companies like Appco because simply 10% of something is better than 100% of nothing.
Disaster recovery isn’t as simple as bloody release all the money to the affected and that’s it done. Disaster recovery takes years to do and it’s not that simple just to start rebuilding straight away.
With the sheer scale of disaster and how it’s not even been a month yet since some of the ferocious blazes went through they are still trying to make sure everything is safe for people to return. Heck it’s less then a week till school goes back and there’s still schools that need examine and fixing to ensure they’re ready for just school.
We also have even more bushfire alerts coming on today , what happens if another blaze wipes out communities and all the money has been released already?
Also like to say the media ain’t helping the spread of this bs about charities stockpiling the money for something else and then why not releasing it straight away. We haven’t even started to deal with the emotional trauma of what people have been through and we want to hand them a bunch of money saying now you can go recover?
I feel like this is some kind of deliberate distraction to shift the blame from our government onto someone else.
I feel like this is some kind of deliberate distraction to shift the blame from our government onto someone else.
Of course its a distraction. The Government has copped a lot of heat recently (no pun intended) and what a better way to push this out to slip under the radar for something else that they are doing in the background.
Lease out another port or even an airport to china for the next 99 years.
Australian Red Cross senior executives don't do it just for the love of humanity - they are well paid. Total executive compensation is a much higher percentage of total assets than some other big charities like the Salvation Army.
Just copied this from a FB post by my local IGA supermarket, which was collecting for the Salvos:
"To date the Salvos have provided services and support at over 165 locations across the country since Sept 2019. More than 225,000 meals have been prepared and served, and over 115,000 light refreshments provided to first responders and evacuees. A total of $40m has been raised since the National Disaster Appeal was launched on 9 November 2019."
Firstly, I think this is great.
But, do you notice:
- that the services were provided since September 2019
- that the appeal was launched on 9 November 2019
I imagine (happy to be corrected) that donations are reducing now.
So the Salvos were providing these services and the support for weeks and weeks before they were receiving donations. They can only do that if they have reserves of funds, equipment, supplies, etc.
They haven't stopped providing those services (where there is a need).
I understand that my (direct) donation goes into a pool of funds, and I trust that provider to manage the funds accordingly.
Come in spinners, it's been known for a long time they are a rort, as long as it made you all feel better though that's all that counts.
This is a nothing story. Red Cross was up front that $30 million of the $115 million is allocated to emergency cash grants, of which $6.9 million has been spent. Obviously it takes time to process applications without going and spending an excessive amount on administration (Red Cross states that their spend level target is 10% on admin). So the crux of the story seems to be that emergency grants just aren't being processed fast enough…
The longer term spending needs to be allocated on sensible needs basis so it will actually take time to decide and allocate the best use of those funds and co-ordinate with other govt or charitable organisations. The VIC Govt bushfire appeal is the same, they have set up an advisory panel so as far as I know 100% of that money has gone nowhere at this time. Red Cross are the ones actually handing out cash NOW. It is quite difficult to "immediately" spend a sudden $100M+ windfall. Especially if your reputation depends on you beeing seen to support those most in "need."
Just give them a lump sum payment like the baby bonus and be done with it.
I used to collect money for raffle tickets for the charity "NSW RFSA". It's different to the actual NSW RFS, this charity is just a representive body for volunteers and staff.
We could never say we were calling on behalf of the New South Wales Rural Fire Service. The contact centre also kept at least 60% of the money raised and then the left over was given to the charity. I quit as soon as I found out what percentage of the money was actually going towards the charities and how much was actually going towards the cause.
Tsunami of 2004 saw far too much go to the Red Cross for use in Thailand and Indonesia. Comparatively little of what was donated for that has been used for it.
The Red Cross' stand on it was: you gave the money to us, we do what we want with it.
I suppose the bigger question is, did Red Cross provide acceptable levels of immediate and ongoing support to the Tsunami victims?
If they did, and they didn't use all of the donated funds, then that seems to be a reasonable outcome to me.
One thing I am bearing in mind was that one of the earlier attacks on charities was by three members of the NSW branch of the party most culpable in causing the disaster and recalcitrant in mitigation. The attack and this 'story' appear part of Scummo's 'repositioning' of his message, putting the blame on charities for their 'failure' to keep promises made by idiological and partisan parasites keen to deflect and conflate any criticism of their abject incompetence and, in the case of the vast cuts made to funds for mitigation and prevention, outright responsibilty for what unfolded.
It is part and parcel of blaming a party that has never been in power or goiverment for the results of Coalition policies, A failure to clear out trees and undergrowth - a procedure that would have led to even dryer forests and hotter raging canopy fires - and even more egregious, the spending of federal funds not on support, but on an advertising blitz on Facebook that actually called for donations to the Liberal party, and outpouring of trolling in on-line fora conflating and misrepresting positions and history, a fatuous failure fired under a cloud from his two previous postions doind a " how good is publicity" tour forcing his handshakes and false bonhomie on those grieving while his offsiders elbowed out and attemted to silence dissenters as he made a run from the justified critcisms, and the promise of yet another inquiry following the many we have already have to see if the wanted answers can be shaped by a different set of criteria - this one being ' why it wouldn't be a government problem if we sold of the parks'.
Scummo from marketing has promised to " do what it takes". What he hopes we won't notice is that means 'to deflate any ans all balme to those without the money to defend thamselves, and keep our snouts in the trough and our owners profits flowing."
By all means get angry - but at murdoch, whose gutter press this distraction is in, and at those who believe your taxes are a personal trough for them, their mates and their owners and are utterly responsible for what has and will continue to occer in the nation they are destrying before our eyes.
Ask me what I really think….
Ask me what I really think….
What do you really think?
My late mother in law states that in the terrible bushfires in the 1930's school children accross Victoria
gave money to help the bushfire victim's. However years later the money was still in the bank. NO monies had
been given out. Nothing has changed has it.
Which charity or body were the funds donated to?
i appreciate the red cross sales pitch below,
"We don’t want all the money spent now and then the community to be really in need in 12 months time and the media spotlight has moved on and these people are really doing it tough.”
But, if you have been thru this and lost everything i have my doubts you would want the red cross to hold back all of that donated money for a rainy day.
is it likely to be a worse situation in 12 months for the people that have lost everything, i have my doubts.
I said this from day one…. these so called "god fearing" charities are in it for themselves.
Look at the Red Cross… about to pocket 10 million from this scam. 10Million….
How can they now dictate who and when gets the funds…
Everyone who donated should ask for their money BACK
I can't understand the link between "god fearing" and Red Cross. Could you provide references to support this.
Once again stop listening to an echo chamber and find out the facts. The Red Cross works on an administration cost of 10c in the $1.00 Sometimes they are able to get the administrations costs covered by an external entity such as government of sponsorship The remaining money all goes to the intended recipients. The facts are that there are 10K packages ready to go foe all who have lost their homes or the homes are uninhabitable, the entire package will be managed over 3 years to ensure that the assistance is ongoing and sustainable. The gutter press (yes I am point to you Murdoch) and some Politicians should be ashamed at making headlines when they know the facts…. This was all put forward on Radio this morning (ABC Radio Melbourne) by the CEO of the Red Cross.
On the one hand, this is true. On the other however, people donate with the expectation that it would be passed on now.
Plus, maybe if the businesses and farmers got the stimulus now, they'd be in a better position down the track and not need help later.