Thursday, December 10, 2015

The inefficiency of philanthropy

The totals are in:
Colorado Gives Day broke yet another contribution record with 123,999 donations made during the 24-hour event, bringing in $28.4 million.
Colorado has over 5 million people, so that comes to less than $6 raised per person. How much social services does that buy?

Consider how many people now work in fundraising jobs compared to 40 years ago, when the tax rates were higher. Is professional flattery the best use of our society's labor?

Now compare the Colorado State Tax Revenues for 2013 (the most recent year I could find on line).

The state spends ~1% of gross collections on administration. In the world of philanthropy, anything less than 10% administrative & fundraising costs is considered excellent. 20-28% is more typical.

 We are getting more than an order of magnitude of better value in our administration costs through taxation rather than volunteer philanthropy.

Just as I back evidence-based medicine, I back evidence-based governance.

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