One of the traditional assumptions that are held by most individuals who donate money or other resources to charity organization is that all if not most of what is contributed goes to good causes in helping to better the life for the world’s neediest societies. As indicated by Roelofs, charitable non-profit organizations are assumed to be commendable, indispensable, and diligent entities a factor that forms the spine of the marketing strategy for any non-profit organization (22). However, it is unfortunate that the aforementioned assumption is unfounded. Charity fraud, although uncommon, is existent and a number of charity organizations and a number of cases have been investigated over the years. For over three decades, the Oklahoma City-based hunger-relief charity Feed has grown to become one of the largest charities globally. Nevertheless, as before mentioned, over the recent past, the American Institute of Philanthropy (AIP) has conducted inquiries over the organizations after claims emerged that the company founder and his family were using its funds inappropriately. With negative claims about the organization hitting the airwaves, there is a need for a better-structured business plan that can be used to maintain as well as attract new donors.
In November 2010, the American Institute of Philanthropy (AIP) handed the Feed the Children (FC) the “Most Outrageous Charity Award”. As indicated by Jimenez, Guillermo and Elizabeth the decision to tag FC with the most derogatory “honor” in the charity was influenced by a string of critics against the organization management (112). Firstly, according to the official AIP investigation report against FC, its founder Mr. Jones failed to disclose that he entered into an inopportune and unlawful 3-year deal with Affiliated Media Group (Jimenez, Guillermo, and Elizabeth, 114). The business dealings between the two parties saw FC pay Affiliated Media Group an estimated $110 million from fiscal 2005 through fiscal 2007 as payments for the organization’s advertisements. Radio and TV are considered as the primary means of marketing when it comes to FC; however, the overhead costs paid were significantly high (Jimenez, Guillermo, and Elizabeth, 114). Additionally, the fact that Mr. Jones was being paid 10,000 a month in sales commissions by Affiliated Media Group clearly shows a conflict of interests.
When it comes to marketing, the Feed the Children organization presents its services in a variety of ways. As indicated by Lupton, FC’s uses Radio and television as the main means to market, nevertheless, the organization has developed a habit of emailing its potential donors as well as interacting with them on social media (49). Over the years, FC has been able to reduce its marketing costs on radio advert by broadcasting the same advert in the U.S as it does everywhere else. Additionally, when it comes to the use of social media the Feed the Children organization uses sends “thank you videos” to keep in touch with the old donors as well as showcases its influences to the public in order to attract new sponsors through the provision of up to date news about disasters (Lupton, 52). Over the last decade, the company has also used its website extensively as a tool to update its donors with news on progress done in aiding victims from different areas regarding the use of their resources. The company’s use of $110 million in two years as overhead costs on advertising it is a clear sign of mismanagement, a new marketing plan that centers on cost efficiency ought to be adopted. Social media, website, and emails are much cheaper means to get to the desired donor demographic yet they are the best ways to maintain a closer relationship with the organization.
Throughout the AIP investigation, it became clear that misappropriation of funds was predominant in the organization. According to a report provided to the Oklahoman, Mr. Jones indicated that he had purchased a $1.2 million house in the Los Angeles area “to reach out to celebrities”. The house was said to be an asset to the organization as it was used by his daughter as a location to host potential donors within the area. This statement contradicted his previous statement is legal papers filed on 19 Jan 2009 which, he accused his daughter of “treating a business residence in California as her personal residence” (Lupton, 61). Additionally, in the same lawsuit, he indicated that some of his other employees, including accusing FC’s chief financial officer, Christy Tharp, of being incompetent in utilizing company resources. The worrying fact of the statement came in the form that the employees in question had worked for the organization for a long period; for instance; Christy Tharp had occupied the CFO since 2002 (Lupton, Robert D. . With such information in the public, it can be argued that there is a need for the organization to restructure its staff. As a means to gain donor confidence, the FC board needs to conduct recruitment excises for better-qualified staff.
Only a month after the shattering earthquake struck the Island of Haiti, a CBS News inquiry exposed that FC was significantly overstating the level of aid it was offering to victims. The story, which broke on 18 February of 2010, included an interview with AIP’s president indicated that although FC’s web site stated that it was “providing medical relief for 12,000 people,” the organization only had three doctors in Haiti who could really only provide services for about 100 people on a daily basis. Additionally, the web site indicated that FC was collaborating with various United Nations agencies in providing food and milk to some of the affected; however, when CBS investigators visited the said areas, they found out that this was not true and in reality, more than a fortnight after the quake struck the organization had not fed anyone. According to an interview by Sharyl Attkisson, a CBS reporter, when the FC Director of Communications Tony Sellars was told that no food had been provided to the Haiti victim by his organization, his response was, “That does surprise me at this time, yes.” (Kristof, P.np) From the above-mentioned information, it can be argued that it is easy for an investor to lose confidence in the company due to a false representation. The organization board ought to make sure that the website provides accurate and up to date information to its donors and the public.
In summation, when it comes to non-profit organizations marketing strategies are pined to the integrity of an entity. Over the last, decade FC has lost much of its honor due to three major issues namely misappropriation of funds, poor staffing, and false representation of official information. In order to win back the confidence of the public, the organization ought to change its cost structure, recruit new staff, and publish credible material as a marketing strategy.
Jimenez, Guillermo C, and Elizabeth Pulos. Good Corporation, Bad Corporation: Corporate Social Responsibility in the Global Economy. Geneseo, NY : Published by Open SUNY Textbooks, Milne Library (IITG PI), State University of New York at Geneseo, 2016. Print.
Kristof, Kathy. “Charities Fake their Numbers to Look Good.” CBS News. 14 Dec. 2009, www.cbsnews.com/news/charities-fake-their-numbers-to-look-good/. Accessed 30 January 2019.
Lupton, Robert D. Toxic Charity – How Churches and Charities Hurt Those They Help (and How to. Harpercollins Publishers Inc. Print.
Roelofs, Joan. Foundations and Public Policy: The Mask of Pluralism. Albany: State University of New York Press, 2003. Internet resource.