The folks at MSNBC.com finally posted something worth reading. The other day they had an article that talked about how charities are finding it harder to plug the holes in their budgets with donations. As someone who makes a lot of donations each year and also works in and studies the nonprofit industry, I found this article very interesting. For me, one of the best parts of the article was:

It costs more to acquire new donors than to retain them, experts say. But churning through donors also makes it harder to woo benefactors. “Donors don’t want to be funding fundraising,” says Sargeant. “They want to be funding the work you’re trying to do.”

And they’re demanding much more accountability from the nonprofits they bankroll. If they don’t get it, they walk, says Penelope Burk, president of the fundraising consultancy Cygnus and Associates.

This is it – this is what the nonprofit industry comes down to. First, are you asking for someone to make a donation that goes to a cause or goes towards paying for salaries? Second, are you willing to explain your expenses and why money is put in certain places as opposed to others? Third, are you doing what you actually said you would be doing?

The answers to these three questions are why I donate to the Sigma Pi Educational Foundation. When I donate to the SPEF, I am giving a tax-deductible donation to two specific funds (both of my choosing) that are managed by people I know on a first-name basis and can e-mail at 1:00pm and receive a personal response by 2:00pm. These funds are under the oversight of a Board where I know many of the members on a first-name basis and have many of the cell phone numbers in my phone.

That level of trust is hard to come by in the nonprofit sector.

I helped put these two funds together and I know where each dollar is spent. I know how much of the fund’s earnings are spent on administrative expenses and I know how much goes back to the overall end-user and it what forms (scholarships for the undergraduate fraternity brothers). At any time I can pick up the phone and call the President of the SPEF and have a discussion with him.

There’s a level of trust and reliability there that you cannot build very easily. Hell, my own company is a nonprofit and I’ve yet to donate or invest any money with them! I’ll be changing that in the New Year, but it has taken me the better part of 16 months as an employee to even reach that level of comfort.

So be sure that you know the places that you’re donating to and be sure that you know where the money is being spent. And hey, if you feel like you can’t make an impact with any organization, then donate to the Sigma Pi Educational Foundation! It’s a good group with a good cause which I’d be more than happy to talk to any of you about!