I have never understood this either. It might seem a bit cynical but it often feels a bit like someone trying to:
1. Do something cool they always wanted to
2. Get someone else to pay for it
3. Get some feel-good story to tell their friends in the process
Perhaps it’s not the case, and that most people are well intentioned, don’t think about it this way and aren’t trying to do anything nefarious. But it’s hard to shake the idea once it’s in your head :-/
My uncle once asked me to sponsor him to do a charity marathon. I contacted the charity and found out that at most 50% of my donation would go to the charity and the rest would pay for him training and event fees.
I did sponsor him but I kept thinking it would have been better to send 100% of my donation directly to the charity in my uncle's name. Of course that would have been a lot less fun for my uncle.
I think the question is - would you have donated, to any cause, without your Uncle?
I'm not asking to be combative - it's a legitimate question millions have to ask themselves. My friends and I participated in the ice-bucket challenge. We would not have done what we did w/o such a ridiculous, yet fun, method of virality.
To me, it is about 'effective' money. With your uncle + the organization, was the money more effective with or without?
There is an interesting TED talk from 2013 that highlights a semi-counterintuitive problem - if you can't pay top dollar, you can't get top dollar talent except in extremely narrow cases[0].
My interpretation is, we would love 100% of our charitable donations to reach the village who needs water or a toilet, but the reality is, people who run the org need to get paid as well.
Measuring a charity by how stingy it is might actually be less effective overall.
Anecdote: Bill and Melinda Gates foundation absolutely pays top dollar (of charities) to gain some of the smartest former execs in the industry. They're wildly effective.
I certainly would not have known about this particular charity without my uncle. However, had he told me it was an important cause to him and simply asked me to join him in donating, I would have.
I guess another question is whether my uncle would have made that effort without the marathon.
These days schools do just ask directly for a donation via check if the parents afford it. Most schools don't have time to run a sales operation for useless stuff in addition to their primary job of educating children. And most schools' funding gap is far greater than can be raised by children selling tchotchkes.
People have come to the sober realization that the only way public schools get sufficient funding in the US (and to a lesser extent in the UK) is from private donations. The system has now baked this in as an assumption, even building local real estate markets around the shared consensus to privately financially support neighborhood schools.
As long as the person raising the money does 'something they always wanted to' under their own dime and raises money, I can't see anything wrong with it. Obviously, this article highlights there's a fundamental but obscure flaw with this specific method.
something they always wanted to' under their own dime
That’s the problem. The sponsors think they are giving a donation to the charity, whereas the charity actually only gets what’s left over after the expensive fun has been had.
When I have done sponsored things I have always covered the costs myself and handed all the sponsors money over.
That plus people are incorrectly assuming that it's bad that the charity gets leftovers. That money is still a net positive which they wouldn't have made otherwise as well as an increase in sponsors via the event. The amount of cynicism here is daft.
1. Do something cool they always wanted to
2. Get someone else to pay for it
3. Get some feel-good story to tell their friends in the process
Perhaps it’s not the case, and that most people are well intentioned, don’t think about it this way and aren’t trying to do anything nefarious. But it’s hard to shake the idea once it’s in your head :-/