We wrote last week about a curious pitch for donations — from Starbucks, of all places — to something called the Opportunity Finance Network (and don’t forget the ®). That organization presents itself as “national network of community development financial institutions (CDFIs) investing in opportunities that benefit low-income, low-wealth, and other disadvantaged communities across America.” …. We’ve been digging a little deeper, and discover that OFN is a Philadelphia-based tax-exempt membership organization of CDFIs. Its president, Mark Pinsky, is paid about $225,000 a year, plus benefits worth about $17,000. It’s got five vice presidents each making about $125,000 a year. It also paid an outside financial consultant another $150,000 in the year 2010…. [I]f one wanted to chip in a few bucks to promote the making of loans to worthy small businesses, it would probably make more sense to send the donation straight to CASA of Oregon or Enterprise Cascadia, rather than funnel it through Starbucks and OFN. Although the latter may be a nonprofit organization, it has lots of overhead that the local outfits don’t. Eliminate the middle man, buy locally — pick your cliché.
We live in cynical times. Nowhere is this more true in today’s era of Occupy Wall Street than when it comes to multinational corporations trying to do what they think is the right thing. My neighborhood Starbucks, like most locations nationwide, is now selling a $5 bracelet, the idea being that the purchase will contribute to creating jobs. Uh…OK….
I’ll admit to occasionally being a bit dense, but I still find myself struggling to understand how a $5 bracelet will translate to creating jobs. Thanks to Portland blogger Jack Bogdanski, I no longer have to worry my pointy li’l haid…which is good, since I’m a history major and not an economist. It turns out that Starbucks is affiliated with the Opportunity Finance Network, which funnels money to local 501(c)(3) organizations with a focus on creating jobs. Creating jobs is, of course, a good thing, particularly in this sucking chest wound we call an economy. There are a couple questions that leap immediately to mind, though:
I can’t help but wonder if the jobs being created are jobs that actually pay a living wage. If the jobs being created pay $9 or $10 an hour, we’re really no closer to creating an economy in which people can actually support families, pay mortgages, and just generally do the sorts of things people did before the banksters steered the economy into the crapper. If you’re working to create jobs, why not work to create jobs that actually pay a living wage instead of trapping people in poverty?
If you really want to donate to organizations working to create jobs (and good on you if this is the case), why not just donate it directly to the organizations doing the heavy lifting? What sense does it make to donate money to a middleman with considerable overhead? Instead of 65-70% of your money getting to folks on the ground, why not as close to 100% as possible?
OK, so it’s easier to donate to a conduit organization like the Opportunity Finance Network. You can write a check and be done with it…that is, if you’re OK with a sizable chunk of your donation being lost to the conduit organization’s overhead. If you’re willing to do your own research, you can easily find organizations worthy of your support while bypassing the middleman and ensuring that as much of your donation as possible does what you intend for it to do.
Of course, Starbucks will give you a really cool looking bracelet for your $5 donation….
Call me silly, but I don’t want to give money to a multinational corporation so they can they funnel it through a middleman who then takes a cut to cover their overhead before they pass it along. I especially don’t want to be giving money to an organization like OFN with so many officers making such outsized salaries. I donate because I want my money to make a difference, NOT because I want my money to support overpaid officers of a non-profit which doesn’t directly benefit anyone or anything. MIddlemen may be necessary in the business world, but when it comes to charitable organizations, I see no reason to finance an organization whose sole role is to funnel money to local organizations. I can get my money to where I want it to go on my own, thank you very much…and I don’t need a bracelet to demonstrate that I want to “create jobs”…whatever that might mean.
I applaud Starbucks for at least making an effort to do what they think is the right thing…but there are far better, and more efficient, ways of accomplishing that goal. Doing the right thing shouldn’t require a middleman.