Transparency Is Overrated
I am certainly not competent to argue halachah with Gil Student but I take issue with one of his recent posts, about the accountability of charities.
Anyone who has ever run a charitable organization of any size, and I've been involved in running two, knows that transparency is totally overrated. Successful charities are usually run by a small handful of people who do all the work and make all the decisions. Successful charities are generally run by benevolent despots. The people on the periphery usually just complain and get in the way.
Going open kimono serves no purpose whatsoever. People who demand that schools or shuls fully open their books to the membership have obviously never run these types of organizations. People who run these joints need flexibility. The one thing they don't need is a bunch of do-nothing whiners second guessing allocations or important decisions.
Even organizations that purport to be transparent are only playing a game with their members. They show them what they want to show them and hide the rest. (For example, the books of an elementary school, which can easily be run at a profit, will never show a profit because parents, who are paying big tuition, don't want to hear that the school is actually making money. So, instead, the profit will be hidden somewhere in the budget). This is a good thing.
(By the way, I am not suggesting that these institutions are not being run honestly. Although, sadly, some institutions do cross the line (think Brooklyn), many are run very carefully and in full observance of the law; they just don't show their members exactly what's up.)
The other thing that I find silly is when people complain about how much teachers or administrators make. In America, you get what you pay for. If you want to pay your teachers poorly, you will attract lousy teachers. If you want an administrator on the cheap, you will get an incompetent administrator who will end up costing you far more than what you think you save. That's just the way it is.
I am certainly not competent to argue halachah with Gil Student but I take issue with one of his recent posts, about the accountability of charities.
Anyone who has ever run a charitable organization of any size, and I've been involved in running two, knows that transparency is totally overrated. Successful charities are usually run by a small handful of people who do all the work and make all the decisions. Successful charities are generally run by benevolent despots. The people on the periphery usually just complain and get in the way.
Going open kimono serves no purpose whatsoever. People who demand that schools or shuls fully open their books to the membership have obviously never run these types of organizations. People who run these joints need flexibility. The one thing they don't need is a bunch of do-nothing whiners second guessing allocations or important decisions.
Even organizations that purport to be transparent are only playing a game with their members. They show them what they want to show them and hide the rest. (For example, the books of an elementary school, which can easily be run at a profit, will never show a profit because parents, who are paying big tuition, don't want to hear that the school is actually making money. So, instead, the profit will be hidden somewhere in the budget). This is a good thing.
(By the way, I am not suggesting that these institutions are not being run honestly. Although, sadly, some institutions do cross the line (think Brooklyn), many are run very carefully and in full observance of the law; they just don't show their members exactly what's up.)
The other thing that I find silly is when people complain about how much teachers or administrators make. In America, you get what you pay for. If you want to pay your teachers poorly, you will attract lousy teachers. If you want an administrator on the cheap, you will get an incompetent administrator who will end up costing you far more than what you think you save. That's just the way it is.
Labels: Random Thoughts
posted by MoChassid @ 8:49 PM
9 Comments:
At 11:55 PM,
Eliyahu said…
you've nailed it! oh, but what about political correctness?
At 1:09 PM,
rescue37 said…
I don't think that requiring institutions to provide a financial statement at year end or a proforma 990 (which most are not required to file) would be a bad idea. Transperency doesn't have to be a listing of all receipts and expenditures made during the year. I think as a donor, tuition payor, etc. we should receive some accounting of what happens with the money. When you come and tell me that tuition is going up 10% because the school has no money, show me that the school is running a deficit or has a projected deficit looming. The information can be presented in a way where the basic information such as salaries, rent, benefits, supplies are presented but not in detail enough to show specific information. No one cares how much is spent on staples, and they don't need to know how much each individual employee is making. (A list of top paid employees and contractors akin to the 990 requirements would be nice.) Most yeshivas get out of reporting this info due to a loophole that they are the religious school of a shul which is exempt. Why do they have so much to hide by refusing to disclose information that should be public since they are a public institution (or so they claim)
At 1:20 PM,
Anonymous said…
Having been intinitely involved governance at three community institutions, I have to say that your description of the way things "are" is right on the money. However, I've never been convinced that being more open would be a bad thing. After all, why shouldn't I try to beg / borrow / steal for elementrary school tutition breaks (deserved or not) if the people asking for the money make no effort to justify the charge on a budgetary basis. As you point out, there is every reason to beleive that we may be being asked to contribute to a fat cat's profits (and I am not referring to the teacher's and administrators, who should frankly be getting dfar more than they are.)
At 1:47 PM,
Anonymous said…
Convince yourself that there is only fraud going on in brooklyn. youre naive!
At 2:10 PM,
MoChassid said…
rescue37:
I ask this in all sincerity...What would you do with the information? (BTW, I have no fundamental objection to filing 990s...they just aren't going to tell you much.
Cedarhurst: I'm not naive. Brooklyn was a (mean-spirited) mashal. I am well aware that shinanegans go on all over the place.
My point is that public diasclosure is not going to help. You either have erliche Yidden running a place or you don't. If you do, they will run the place to the best of their ability with mesiras nefesh. If they aren't they will steal no matter what the reporting requirements are.
At 2:52 PM,
rescue37 said…
Personnaly, the information would not due to much, it mught make me dig a little more and add some extra to the extra I already give to my kids schools over tuition. I do think that such information will have an impact on those that think that paying tuition is enough. Most people are shocked to hear and generally don't beleive it when I tell them that the actual operating cost per student is far above the tuition they are paying. I believe that providing the black and white numbers (preferably with an opinion from an unrelated CPA firm (i.e. not uncle yankel the cpa who operates out of his basement) will result in parents thinking about digging a little deeper and maybe reallocation tzedakah money to go to the schools. There is always the very loud and vocal minority who complain and do nothing, but there is substantial amount of people that need the hard facts to slap them in the face. They will not believe administration or other related people, because these are the people already trying to squeeze them for every penny.
At 4:50 PM,
Fern @ Life on the Balcony said…
Successful charities are generally run by benevolent despots. The people on the periphery usually just complain and get in the way.
and
The other thing that I find silly is when people complain about how much teachers or administrators make. In America, you get what you pay for. If you want to pay your teachers poorly, you will attract lousy teachers. If you want an administrator on the cheap, you will get an incompetent administrator who will end up costing you far more than what you think you save. That's just the way it is.
So true. I agree 100%. I hope my boss's excuse is that he's under paid. ;-)
--Fern
Development Associate at Jewish Day School
At 4:52 PM,
Fern @ Life on the Balcony said…
Also, it is patently obvious when a non-profit is mishandling funds. You don't need transparency to figure it out. All transparency means is more work for already over-worked, under-paid people like me.
At 10:37 AM,
Anonymous said…
I agree with you that you get what you pay for. I always wonder if the people who complain about teachers / administrators earning too much or that schools are wasting tons of money believe in capitalism and free markets. If you think you can do it cheaper open your own school and see what happens.
I am curious, though, how schools get out of filing 990s by declaring themselves a church versus a secondary or primary school. Is that really open to every religious school but some choose to be more altruistic in opening up their books, at least with a 990 every year. Are there any drawbacks to filing as a church, such as not being able to receive grants, etc?
I actually find the 990s reassuring as a tuition paying parent when I look at them. Though, I imagine that one of the strongest reasons schools opt not to file is that the Jewish community is small enough that, having the top 5 salaries public may be a little awkward. Especially since those salaries could be 60k or so with some of the smaller, more out-of-town schools. 60k is a fine salary but it seems a little overblown to expect that it be made public knowledge for that amount.
In any case since you said you have experience with charities and such I would love to know what the requirements/advantages/drawbacks of filing as a church are?
Thanks.
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