Fundraising and the ALS Ice Bucket Challenge

Charitable giving is a noble cause and everyone from large companies, small businesses, to everyday people do it. The benefits include: support for a worthy cause, that warm sense of satisfaction that comes from doing good, and depending on who you are, a nice tax deductible. However, despite all the commotion these days about the ALS Bucket Challenge for Lou Gehrig’s disease, there are still some hiccups to the system.

An article by the Wall Street Journal states that, “Foundation practices today are too bureaucratic, inflexible and cautious, and too focused on short-term objectives.” It focuses on a host of ways to improve charitable giving but here I’m only going to focus on two.
1. Increase the Distribution Percentage
2. Improve Public Accountability
In terms of a Distribution Percentage, foundations simply have to give more money annually. A study has found that, “An increase in the payout rate to 6%, all in grants, would eventually add about $10 billion a year to the coffers of nonprofit organizations” which should not be too much to threaten the foundations themselves.

Secondly, (and this is where the Ice Bucket Challenge comes in) we need an increase in Public Accountability. Call its methods crude if you wish however, the ALS Ice Bucket Challenge has raised over $40 million dollars since July 29th. Not only can the public be galvanized behind a worthy cause that today’s social media can spread like wildfire; they help keep foundations honest. Yet, this can only be established by, “convert failing or at-risk newspapers into nonprofit organizations.” and with great coverage comes even greater scrutiny. You can be sure that the ALS will be under a very close watch as millions of Americans wonder if their “cold” hard cash, (no pun intended) is indeed being put to good use.

Source: http://online.wsj.com/news/articles/SB10001424052748704500604574481773446591750