Komen Foundation Red Flag Should Provoke Non-Profit Self-Assessments

An important part of being a non-profit organization leader (staff or governing board members) is to identify risks and prevent missteps.  Keeping abreast of the negative experiences of other non-profits and asking whether this could happen to the leader’s own organization is a key responsibility.  For example, on June 6, 2013, The Daily Beast reporter Winston Ross offered thoughts on why the Susan B. Komen Foundation cancelled half of their 14 “Race for the Cure” 3-day walk events worldwide.  He asked whether the Komen Foundation had “run its course” citing a number of possible causes for a significant drop in race participation levels and the decision to reduce the number of events:

  • the minimum fundraising requirement ($2,300) was too high given the economic downturn;
  • extensive competition in the race fundraising space;
  • negative backlash from last year’s Planned Parenthood controversy (announcement of withdrawal and then restoration of Komen funding);
  • donor dissatisfaction that only 15% of Komen revenues funds research;
  • donor awareness of Komen’s CEO salary ($684,000); and
  • competition among many more organizations fundraising for breast cancer.

Most likely, participation in Race for the Cure events was affected by all of these factors. 

Few non-profit organizations have experienced the extended fundraising success of or are as large and complex an organization as the Komen Foundation.  However, there are transferable lessons to be learned from the Race for the Cure experience.   Following are some questions that non-profit leaders should ask about their organization’s operating policies and processes that will lower the risk for initiating new programs and increase the likelihood of sustaining individual program and overall organizational success.  These questions address areas often examined by donors and funders in the process of determining or prioritizing their gifts.

1.    Program Duplication.  Does our operating philosophy include a commitment to efficiently fulfilling its mission without duplicating efforts of other individuals or organizations or engaging in program development that would be better undertaken by another organization?

2.    Competition Assessment.  As part of the organization’s strategic planning process does the Board of Directors require a competitive assessment every three to five years to identify events serving the same prospective audience or review organizations with potential mission overlap?

3.    Diversity/Discrimination.  Do all of our programs and materials and the composition of our staff, governing board and committees reflect and emphasize the importance of diversity (e.g., race, ethnic group, disability, etc)?  Does our organization have a statement regarding non-discrimination in the provision of grants and services to individuals and organizations served?

4.    Disciplined Identification of the Need for New Programs.  Does our organization define a process to examine various criteria prior to the initiation of new programs such as:

  • Has the program been investigated to insure it is not duplication of or in conflict with other existing programs of the organization or other organizations serving our primary clients/consumers?
  • Has the program been reviewed by individuals external to the organization with the expertise to design and experience to implement the program?
  • Should we develop and incubate the new program with the intent to transfer the funding and administration of such programs to another organization whose mission and purpose is more directly related or engage in the development of the program with a partner organization?
  • Is the new program being developed in collaboration with organizations or individuals who will benefit from the program?
  • Does the new program meet at least one of the following additional criteria:
    • serves a key influencer group
    • meets a critical need in a department or area
    • integrates at least two organizational goals 
  • Does the organization have the resources to develop and sustain a high quality implementation of the program?      
  • If the new program is to be supported by individual, foundation or corporate donations, does it include at least a ten percent assessment to cover organizational overhead plus the actual operating cost of the program, including staffing costs?
  • Does fundraising for program compete with existing organization resource acquisition efforts or develop new resources?
  • Given the priorities of the organization, does the program justify staff effort and resources?

5.    Disciplined Program Evaluation and Standards for Continuance.  Are all programs offered by the organization evaluated annually on the basis of the following criteria:

  • Is the program fulfilling its objectives?
  • Was the program conducted within the projected budget and does the organization have the resources to continue to support the program?
  • Is the program still within the next year’s priorities?
  • Can the program be improved and are such improvements affordable given the priorities of the organization?
  • Did the people served, the leadership and materials utilized to conduct this program reflect and emphasize the importance of diversity.

6.    Staff Compensation.  Does the Board of Directors determine senior staff salaries and approve staff salary ranges using non-profit organization compensation tables based on size of staff, operating budget, geographical location and designating goal quartiles that are congruent with demonstrated revenue production and the stability of funding sources?  Would the disclosure of the compensation of any staff member to a donor be a source of embarrassment?

7.    Evaluation of Fundraising Events.  Are each of our organization’s fundraising events evaluated annually and compared to the previous three years using the following data:  (a) number of participants at each giving level, (b) total revenues at each giving level, (c) total expenses, (d) total revenues, (e) excess revenues over expenses, (f) review of attendee instances of dissatisfaction, (g) review of attendee’s positive comments and (h) event staff and participant suggestions for improvement.

8.    Organization Position Statements.  Does our organization have an established procedure to develop and approve position statements or ‘sign-ons’ to position statements or resolutions advanced by others that includes (a) a requirement that such positions are directly related to the organization’s mission, (b) an assessment of whether the position has the potential to negatively impact the organization, (c) the designation of specified staff and/or board members as spokespersons, and (d) if potential controversy is identified, the required development of a Q&A detailing how the organization will respond to criticism?  

9.    Program Versus Administrative/Fundraising Expenses.  Does our organization have a budget policy specifying the maximum percentage of operating expenses to be used for administrative and fundraising expenses that is consistent with non-profit model practice and justified on the organization’s web site and in its annual report?  

10.    Transparency. Does our organization post its 990 on its web site and watchdog philanthropic websites (Charity Watch, Charity Navigator, etc.)?  Does our annual report clearly express the use of all funds and how revenues are generated?  Do our organization’s primary staff and board fundraisers know and disclose administrative and fundraising versus the cost of programs and services via appropriate materials to our donors and funders?