Monday, August 18, 2014

Thoughts on the Criticisms of the Ice Bucket Challenge

The Ice Bucket Challenge, a grassroots social media effort to raise funds and awareness for ALS, has spread beyond anyone's expectations. And with popularity comes criticism. I have heard and read the criticism and, to be honest, find it largely unconvincing. Below I will discuss each of the primary critiques.

1. Dumping ice over one's head has nothing to do with ALS.
This critique takes many forms, but the gist is that we don't learn anything from watching people dump ice over their heads. The thing is that more traditional ways of getting people to learn about ALS are expensive, in part because ALS is not (or at least was not) at the center of the public view -- last year, attempts to educate the public about ALS consumed 32% of the ALS Association's expenses. True, you don't learn about ALS from the exercise, but it has led people to seek out information about ALS. As Adweek notes, searches about ALS are up since the challenge started (and more so than searches for the Ice Bucket Challenge itself). A look at Google Trends reveals a similar feature: public curiosity about ALS is way up and more prevalent than curiosity about the Ice Bucket Challenge.

2. The Ice Bucket Challenge is Slacktivism and Doesn't Help the Cause.
This was an early critique, that most people were just posting videos and not actually doing anything to help. It is exemplified by this Huffington Post article. Data has already debunked this one. Sure, not everyone is donating, but a lot of people are.  As of August 18, the ALS Association had raised $15.6 million in donations from 307,598 new donors since the Ice Bucket Challenge began, and both figures are sure to rise. For some context, note that unrestricted contributions to the ALS Association from the general public accounted for $5.8 million for the entire fiscal year 2013.

3. The Ice Bucket Challenge is Taking Funds from other Organizations.
In contrast to the previous one, this complaint is basically that the Ice Bucket Challenge is raising too much money.  The concern, as expressed by William MacAskill in Quartz, is a bit more subtle in that it argues that people giving as a result of the challenge are less motivated to give elsewhere. Rooted in the notion of "moral licensing", the idea is that people feel good about their gift to the cause and thus feel less of a need to do other good things. Besides presenting a rather depressing "zero-sum" view of kindness and charity, it also is applying an experimental result in one setting with the presumption it works in this one. I, for one, know that my giving to other organizations has not been affected by my giving in the Ice Bucket Challenge, and I suspect others feel the same. Even if it is true, it is worth noting that ALS is not a disease that typically lends itself to an enthusiastic public response and for which fundraising is otherwise very hard. So, if it is taking some from other, more visible, causes who will surely return to the center of public view, perhaps that's an acceptable tradeoff.

4. The Ice Bucket Challenge Wastes Water.
Yes, some have even complained that it is a waste of water. Sure, I guess that water is not being used for drinking, but we do plenty of things with water that are not necessary. I would find this view convincing only if those espousing it were protesting water parks and swimming pools too.

In short, I know the persistent ice bucket videos filling your newsfeed can be annoying. However, they are resulting in positive things in the fight against ALS. And, not to worry, in a couple of weeks your newsfeed will return to being filled with arguments about politics and quizzes about which Game of Thrones character you are.

Tuesday, July 29, 2014

Financing of the Noah's Ark Theme Park

For some time, Answers in Genesis (AiG), the group behind the Creation Museum, has had its sights set on establishing a theme park focused around a replica of Noah's Ark.  Originally viewed as a $172.5 million project, the park's plans have been revamped to entail a $73 million initial phase due to slower than expected funding. It is this first phase that has recently been submitted for approval of tourism sales tax rebates from the state of Kentucky. Given this background, I thought I would share a few thoughts about the project's finances, thoughts that are admittedly limited due to the paucity of publicly-available information. I have no interest in speaking about the underlying religious and scientific debates or whether tourism tax rebates are appropriate, but instead will stick to the accounting as it pertains to the project's funding...

Tuesday, July 8, 2014

Where do LeBron James' Loyalties Lie? Look to his Foundation's Spending

It's hard to escape the constant discussion and conjecture about LeBron James' basketball future. While I have nothing serious to offer about that conversation, I will at least seek to address the question about his loyalty to Ohio. What better way to consider where loyalties lie than to follow the money trail, and The LeBron James Family Foundation gives us such an opportunity. Using the IRS Form 990 filings for the foundation since his departure from the Cleveland Cavaliers, I categorized each year's program expenditures based on their target recipient: national programs, state/local programs, or other unidentified targets. Although some targets cannot be identified from the public data, a pretty clear picture nonetheless emerges: while LeBron's skills may have been brought to South Beach in 2010, his charitable endeavors have remained and even become more focused in Ohio. The percentage breakdown for each year is summarized in the following figure.

Am I saying this is evidence of King James' possible basketball future? No, I have no idea about that. What I am saying, though, is that it's clear that wherever he plays basketball, his real loyalties remain in Ohio.

Wednesday, June 11, 2014

On the Criticism of the Gates Foundation

While the Bill and Melinda Gates Foundation has been subject to public and media criticism before, the recent uptick in critical coverage (starting with this article in the Washington Post) on its efforts to influence education policy are noteworthy. Also noteworthy is the fact that shortly after the round of criticism, the foundation's stance took a sudden turn, with a call for delay in implementing "Common Core" education standards.

The purpose of this post is not to add or refute criticisms of the Gates Foundation's priorities or policies (I will leave that to others).  Rather, it is an attempt to provide some perspective on these criticisms.  In a world where many nonprofits face consistent scrutiny and pressure, the Gates Foundation has actually largely avoided the public eye.  Perhaps the nonpartisan mission of the organization and giving attitude of the founders has something to do with this.  Nonetheless, the lack of criticism is striking.  To provide context, consider these 8 nonprofits in the public eye (3 of which are private foundations): ACLU Foundation; Ford Foundation; Gates Foundation; Heritage Foundation; Livestrong; NRA; Planned Parenthood; and the Walton Family Foundation.

The next figure shows each of these organization's total assets (in millions) as of their most recent Form 990 tax filing.

The message: Gates has much more potential influence than any of these thanks to its wealth, with more than 100 times the assets of ACLU, Heritage Foundation, Livestrong, NRA, or Planned Parenthood.  Yet, many of these are constantly criticized and second-guessed (some seemingly have entire cable channels devoted to critiquing them).  For a rough view of this level of scrutiny, consider the number of google hits for a search on each organization's name and "criticism". The next figure presents the results of this exercise.

The message: despite its size, Gates receives much less criticism than most of the others.  In other words, what is surprising is not the recent spate of criticism and scrutiny the Gates Foundation's policies have garnered, but that it has taken so long.  Those at the Gates Foundation should expect more in the way of scrutiny and criticism, not less, in the coming years.  Their size and potential influence make this virtually inevitable.

Wednesday, May 28, 2014

Is There a Life Cycle for Popular Charities?

Recent years have seen several charities rise quickly to the top of public awareness. It's anecdotal evidence, but it seems many of these popular charities follow a similar course: their rapid rise in popularity first brings quickly rising donations; next, over time the public's obsession turns into scrutiny; the scrutiny, in turn, breeds disenchantment with the organization and donations dry up.

The next chart demonstrates this point using four recent cases, plotting each organization's gifts, grants, & contributions as a percentage of that in their peak year. The pattern is remarkably similar though the underlying story of each is, of course, very different.
Gifts, Grants, & Contributions as a Percentage of Peak Amounts
Does this pattern signal an overly fickle public? Or, does it represent a public slow to examine an organization before supporting it? I'm not sure, but maybe it does signal to other charities that find themselves in the spotlight that just because the public is fully supportive doesn't mean they won't soon be harder to persuade.

Monday, May 19, 2014

Wounded Warrior Project Growth

The incredible growth of the Wounded Warrior Project in one chart:

Amounts come from each organization's IRS 990 filings, Schedule A Part II(A)(1)

Thursday, May 8, 2014

It's Getting Surreal in the Whole Foods Parking Lot

As I approached my local Whole Foods parking lot, I saw what is now becoming a familiar sight, a clothing donation bin. This time, my curiosity got the better of me, and I wondered what happens to these donations?