The Business Of Charity (part 1/2) – Kony 2012 One Year Later: Where Is The Money?

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It’s been a year now. April 20th, 2013 marks the anniversary of “Cover The Night”, the culminating point of the Kony 2012 campaign which fell short in rallying youngsters in the streets to post thousands of posters.

Everything started with an emotionally compelling video that went viral. The Kony 2012 video made a hundred million people relate to the issue of child soldiers and created a sense of urgency in the West to arrest the LRA lord of war Joseph Kony.

Even today I have very passionate debates about the shortcomings of this initiative. From an oversimplified and somehow misleading narration of the issue of child soldiers in Uganda to the 25-year-late priority to arrest a character already at the end of his reign, the reasons to criticize the NGO Invisible Children and its co-founder Jason Russell have been numerous. Overall, the movement triggered several positive actions (which I personally salute) and tons of criticism, but failed to bring Joseph Kony to justice.

The objective of the campaign was not very clear to me: Arrest Joseph Kony or stop the child soldier issue or both. Nonetheless Invisible Children has been successful at gathering a massive amount of funds thanks to this campaign, but Joseph Kony is still free. So where did the money go?

How the money was spent

Invisible Children earned $33 Million in 2012. The NGO claims 81% of expenses went into “programs”[1]. However a different look at their financial statements reveals that for each dollar spent on administration, fundraising, awareness products and communication[2], $2 were raised in revenues and donations[3]. And from those $2 earned, only 36 cents actually went directly to child soldiers[4] through protection and recovery programs. The rest is either sitting in a bank account or was spent elsewhere. No dollar spent has been successful in arresting Joseph Kony.

What you should know before donating to charities

I used the example of Kony 2012 to illustrate the fact that when you give money to a charity, not all of it goes directly to the cause. Indeed, there are several other costs related to marketing, fundraising activities, awareness campaigns and operating expenses like trips, equipment, staff salaries or rent. Therefore, I would advise you to be comfortable with the following two measures before donating:

  1. How much money is raised for each dollar spent on general expenses?
  2. What percentage of each dollar raised actually goes into solving the problem?

In the web 2.0 era, philanthropists are able to raise millions of dollars for causes they are passionate about regardless of their management skils. Competition is fierce in the attempt to captivate people’s attention long enough for them to care. Therefore, campaigns have to integrate perfectly with traditional media, mass consumption and compulsive twitting habits. It almost seems like the secret to a successful charity fundraising lies in the fundamentals of capitalism and economic liberalism. For that reason, it is even more important to track the money you donate, and I believe the advice I gave you will help.

Sneak peek: The business of charity part 2/2 – Charity vs Investment

In my next article of this series I will try to demonstrate that the entire model of providing justice, goods and services to the poor for free is just not efficient in eliminating chronic humanitarian issues. If we are eager to help the developing world, I would submit that we should invest less in OUR charities and more into THEIR businesses?

 

Do you agree with this or not? 


[1] media, mobilization, protection and recovery

[2] Including media and mobilization

[3] Admin +media + mobilization + fundraising + cost of awareness products= $15.5Million; Revenues = $32.9Million.

[4] Protection + recovery = $5.9Million or 18% of revenues

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