The former CEO of National Public Radio exposes the shortcomings of tax-deductible, not-for-profit organizations.
Stern, currently CEO of Palisades Media Ventures, writes that a distressing percentage of the approximately 1.4 million charities are poorly managed and fail to accomplish the goals trumpeted to donors. Further, donors rarely examine the organizations to which they contribute, and government agencies offer little analysis of the performance of the charities. As for the small number of private groups that rank charities by performance, writes the author, the examinations are both superficial and focused on misleading measures. Stern emphasizes the importance of donors’ measuring charities' actual performance versus promised performance prior to giving, much as they might examine for-profit corporations before investing. The author fills the text with insightful, vivid examples, including case studies from his former employer. It is fascinating to learn the behind-the-scenes saga of Joan Kroc's highly publicized $200 million donation to NPR and the mixed results of how NPR allocated the unexpected gift. Stern then contrasts that windfall to the less-publicized $1.5 billion gift from Kroc to the Salvation Army. For months, Stern explains, Salvation Army decision-makers debated whether to accept or reject the gigantic donation, because Kroc wanted the money spent in specified ways outside the traditional mission of the charity. Eventually, the organization accepted the money, but Stern delineates why that might have been an unsound decision and how the charity's performance might have suffered as a result. Eye-opening case studies include the absurdities of organizations such as hospitals and college football bowl-game organizers qualifying as tax-deductible charities since they often fail to spend donations for the public welfare.
A trove of useful insider wisdom.