Are you considering donating to a Children's Sponsorship Charity such as Children International, World Vision Or Save The Children? If you are you should know that the first 20,000 sponsorships every month never get to the children. The first 20,000 donations go directly into the bank account of the chief executive who runs the organization (assuming $20 per sponsorship).
Many people believe that since Children's Charities are non-profit, it means that no one is profiting from the activities. In fact, many donors do not realize that the CEOs of these children's sponsorship charities make nearly $0.5 million annually and it is not uncommon for charities such as these to have an entire management team earning hundreds of thousands of dollars.
How is it possible that executives of children's charities can make such high salaries? It is the philosophies of many charities that they should be run much the way that corporations are run. Rapid growth rate and expansion are sought by the boards of directors. In order to get executives who run the charities like corporations, the directors recruit their executives from the corporate ranks and then must pay salaries which are competitive with what the executives could be earning in corporations.
A common statement by supporters of this philosophy is that the salaries of the executives is not the issue. More important, the supporters argue, is the percentage of money which is used for administrative purposes. The supporters of this policy believe that if less than 20% of the donations is spent on adminstration and if 80% is spent on "projects", than the salary of the executives should not matter. However, with modern accounting practices, the magic 20-80 goal is not hard to achieve. Simply outsource your administration costs abroad and have salaries of your local workers covered by your project costs. Then you have freed up administration money which can be used to pay hefty salaries to corporate staff.
Further the supporters argue, if the executives can run the organization more efficiently or grow the charity faster, then they must be certainly worth these astonishing salaries. However, I submit that the goals of these non-profit organizations should not be aligned with those of for-profit organizations. A charity must not necessarily grow rapidly in order to be successful. Charities do not exist to pay dividends the way that corporations do. Charities exisit to help people. The priorities of the executives should also be about helping people. The executive of a child sponsorship charity should not be there only to get rich.
Frankly, I would not care how much the charities would choose to pay their executives, if only they were open and honest with their donors about the fact that they are paying their executives six digit salaries. However, I challenge you to go to the websites of the charities mentioned and discover the salaries of the executives. If it is there at all, you must dig very deeply into the website and know exactly where to look in order to find such information. You must search in places that the average donor would never think about looking.
Charities are using other tactics common in the corporate world, such as paying percentages of the donations to collectors. For example, Save The Children is offering collectors up to 50% of the donation. As can be see from this announcement, an affilate who collects a $10 donation can keep the first $5. However, that information is not available on the Save the Children website, since it would probably discourage visitors from becoming donors.
When donors contribute money to a child sponsorship organization, they want to see their hard earned money go to help a child. However, in today's reality, when charities are being run as corporations, much of those funds are being diverted in ways that many donors can not imagine.