Local charities relying on splashy events least efficient

Charity pasta dinners and galas are cherished local traditions, but consider asking how much of the ticket price goes to the needy and how much goes to the rubber chicken.

“You have to understand that if you’re going to a big, splashy charity event, part of the money that you’re contributing to the big, splashy charity event is going to pay for the big, splashy charity event,� said Cathy Barr, senior vice-president of Imagine Canada, which advocates for charity accountability. “If you just write a cheque to that charity, then more money’s going to go to the cause. I think donors are sometimes a little wilfully blind to that.�

Local charities that rely on events to raise money are the least efficient of those examined by The Star.

The cost to put on popular Windsor events like the Rotary Club’s Art in the Park and galas held by small cancer fundraisers eats up a significant portion of those organizations’ budgets, cutting into the amount they can give.

Four charities out of the 13 analyzed — the Rotary Club of Windsor (1918), In Honour of the Ones We Love, Transition to Betterness and the Hotel-Dieu Grace Hospital Foundation — did not meet the minimum 65 per cent benchmark recommended by charity watchdogs for proportion of total spending going to the needy and all four listed fundraising events as a source of revenue on their most recent tax returns. Six of the 13 charities — the four mentioned above, plus Big Brothers/Big Sisters and the Hospice of Windsor and Essex County — spent more than $35 to raise every $100 donated, the level at which the Canada Revenue Agency starts looking through a charity’s books to see if there’s a pattern of unjustified high costs.

All six used events to fundraise. In fact, the only local charity analyzed that listed dinners, galas or concerts as a fundraising method and still managed to meet the minimum benchmarks for spending on charitable giving and fundraising was the Windsor Regional Hospital Foundation.

Fundraising events are far from the foundation’s only source of revenue, however, with substantial gifts from other charities, government funding and investment income also helping them squeak by the minimum benchmark, with 69 per cent of total spending going to benefit the hospital. For smaller charities that don’t have the same advantage and rely on fundraising events for the bulk of their revenue, keeping costs down is a constant challenge.

Kelly Gosselin, director of operations at Transition to Betterness, said her organization is trying to move away from its reliance on events for exactly that reason. The charity, which runs several programs to help Windsor-area cancer patients, benefits from about 20 fundraising events every year, with charitable spending and fundraising costs each accounting for about a third of the $506,199 in the 2011 tax year.

Gosselin said some context is necessary to explain those numbers. Transition to Betterness has been paying back a debt to refurbish the Windsor Regional Hospital oncology unit in 2009, which artificially boosted their ratio of charitable giving to total spending that year and lowered it in 2010 and 2011.

Now that the debt has been paid, Transition to Betterness has an additional $216,976 in surplus revenue earmarked to be spent on helping cancer patients in 2012, Gosselin said.

Still, Gosselin said the charity is well aware events are expensive, time-consuming and not the most efficient way to raise money. The irony, she said, is applying for grants increases the charity’s administrative costs, because it takes time and expertise to put the proposals together.

Gosselin said the case for donating to an organization like hers is the tangible impact, even though national cancer charities might make a more efficient use of their dollars. Rather than focusing on finding a cure, Transition to Betterness tries to make life as comfortable as possible for cancer patients and their families by offering a meal program, refurbishing hospital rooms and giving out blankets.

“The cool part about a local charity is that you can actually go and feel and touch those donations. Any national charity, they might raise 70 cents on a dollar, 80 cents on a dollar, but can you really feel it in your own community?� Gosselin said.

Lex McCrindle, treasurer of the Rotary Club of Windsor, said the ability to issue tax receipts is an advantage of charitable status, but the disadvantage is the requirement to report expenses. Operating on an entirely volunteer basis, the charity’s management and administrative costs ring in at a lean seven per cent of the $539,433 it spent in the 2011 tax year, but fundraising spending accounted for 39 per cent, leaving 54 per cent for charitable giving.

That’s why most Rotary clubs aren’t registered charities, McCrindle said. For example, the Windsor Roseland Rotary Club, a separate charity, can spend as much as it wants on its annual Lobsterfest, cut a sizable cheque to various good causes and walk away without having to worry about whether burgers might have been a more efficient way to raise money.

McCrindle argued the events themselves are a benefit to the community, regardless of how efficient they are at raising money. “The higher cost of our fundraising is a result of a combination of ‘fundraising’ costs and ‘fun raising’ costs,� he wrote in an email.

Anita Imperioli, president and founder of In Honour of the Ones We Love, said her charity fills a need that would go unaddressed if people only donated to larger, leaner charities.

About a third of the $203,911 spent at In Honour of the Ones We Love in the 2010 tax year, the most recent with statements available, went to either purchasing cancer equipment for the Windsor Regional Hospital Foundation or running Kids Beating Cancer, a martial arts program for children with serious illnesses. About a quarter covered management and administration expenses, with 40 per cent going to fundraising costs, including its annual gala.

Kids Beating Cancer is expensive to run, requiring specialized instructors and a high level of administration, Imperioli said. “Without us doing it, they’re not going to run the program. That’s No. 1. And the amount of work to run it is unbelievable — you have to get the instructors, you have to get the right people.�

Barr of Imagine Canada said donors have a role to play in reducing costs, too. If more people were willing to give without expecting a lobster or a martini bar in return, charities would be able to spend more time and money on their real work and less on event planning, she said.

“Donors sometimes talk out of both sides of their mouth on this issue. ‘We want your fundraising costs to be low, but what am I going to get for my donation?’� Barr said. “And that’s something charities are reluctant to say.�

cbrownell@windsorstar.com or Twitter.com/clabrow