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World Vision U.S. CFO Responds to Felix Salmon

Source: Thomson Reuters Foundation - Mon, 21 Mar 2011 16:39 GMT
Author: Larry Probus
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Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.

Larry Probus, CFO of World Vision U.S., responds to a blog written by Felix Salmon on Reuters.com who has since revisited his original post. The opinions expressed are Larry Probus' own. 

SEATTLE -- Felix Salmon's blog, "Don't donate money to Japan," appears to make a compelling argument for not designating donations to charities responding to the tragic earthquake and tsunami in Japan. Mr. Salmon contends that, "Earmarking funds is a really good way of hobbling relief organizations and ensuring that they have to leave large piles of money unspent in one place while facing urgent needs in other place."

There is an element of truth to this argument, but as often is the case, simple answers to complex questions are usually wrong.

As the chief financial officer of the U.S. offices of World Vision, the international Christian humanitarian organization, I can appreciate Mr.

Salmon's complaints about earmarked donations enabling "a mess of uncoordinated NGOs parachuting in to emergency areas with lots of good intentions." But rather than encouraging "business as usual" levels of giving, our response should be to ensure life-saving relief efforts are coordinated and effective.

NGOs need both designated and undesignated funds to be successful.

Designated donations provide charities with discipline and discernment to perform the work they promise donors they will do – whether emergency relief operations or long-term community development. Moreover, donors can – and should – hold their charities of choice accountable and expect to be informed about how their designated contributions were used.

On the other hand, no charity could survive if all its donations were earmarked for specific programs. How could overhead be covered? I've yet to meet a donor whose passion is paying the office's electric bills, let alone the costs of fundraising. My experience in both the corporate and non-profit sectors has enabled me to scrutinize expenditures for administrative functions, either for the benefit of stockholders, or targeting more money for programs serving the poor.

Mr. Salmon and I do agree that designated donations can leave some NGOs unable to address the "less visible emergencies," such as some of those 22,000 children who die every day from mostly preventable causes, or the 1,000 children who are infected every day with HIV, the virus that causes AIDS. Those crises do not merit "wall-to-wall coverage" for several consecutive days on CNN or the BBC, enabling millions of people's hearts to be touched and wallets to be opened. But they are no less important, nor less urgent, than the four-month-old infant rescue workers pulled from the rubble March 15th in Japan.

The fundamental issue with charitable giving is trust. If donors are wary of a charity's claims - either in the midst of a major natural disaster, as we have seen in Japan, or in conducting long-term community development – they should keep their money. But if donors do their homework, consult watchdog groups, such as Charity Navigator or Better Business Alliance, and develop a comfortable level of trust that the organizations will be effective stewards of their contributions, then I would gladly echo Mr.

Salmon's admonition: "So do give money to them — and give generously!"

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