Bruce Murphy
Murphy’s Law

Does MACC Fund Give Enough to Charity?

The high-profile group spends a lot on administration, including a salary for Jon McGlocklin.

By - May 14th, 2013 10:21 am
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Aaron Rodgers. Photo by Mike Morbeck.

Aaron Rodgers. Photo by Mike Morbeck.

On Sunday the Milwaukee Journal Sentinel offered a front page, top-of-the-fold story touting the work done by Packers quarterback Aaron Rodgers to raise money for the MACC Fund — the Midwest Athletes Against Cancer.

The praise certainly seems merited. As the story notes, since 2010, “Rodgers has helped generate $725,000 in net proceeds for the MACC Fund,” and a fundraising dinner starring Rodgers at the Hyatt Regency this evening is expected to hike that the total “to well over $1 million.”

But the story goes on to all but canonize the MACC fund and everybody associated with it. It tells us that former Milwaukee Bucks star Jon McGlocklin “has been president since Day 1 and though he will turn 70 on June 10, he still gives selflessly and energetically to the organization and attends many of the annual fundraising events.”

One would hope McGlocklin attends some of these events. As the group’s federal tax forms show, he has drawn a full-time salary of $87,000 for the last seven years. JS reporter Gary D’Amato’s use of the word “selflessly” makes it sound as though McGlocklin is working for nothing.

Then there is John Cary, the group’s executive director, “who is McGlocklin’s equal in terms of compassion and bulldogged determination,” D’Amato tells us. How D’Amato came to that conclusion is not explained. But his story leads one to believe there are probably tougher fundraising jobs out there. As McGlocklin notes, “We’ve always had the sports connections that have given us an edge.” Indeed, D’Amato writes, “over the years, a who’s who of Wisconsin athletes, business leaders and celebrities have supported the charity.”

Yet Cary has been richly rewarded: his total compensation rose from $133,031 in 2004 to $227,853 in 2010, a hike of 71 percent during a period when the cost of living rose by just 14 percent.

The compensation of Cary and McGlocklin becomes more relevant when you consider the rankings by Charity Navigator, which rates 6,000 charities to help donors decide which groups are the best run. It gives the MACC Fund just two stars on its four star ranking. The group gets a good score for accountability and transparency, but a very poor score  (32.30 on its 70 point scale) in the financial category, which looks at the percentage of money raised that goes the charitable program in question (in this case the cure and prevention of childhood cancer) rather than to administrative and fundraising expenses.

Charity Navigator concludes that 68.9 percent of dollars raised by MACC actually go to programs combating cancer, and notes that 7 of ten charities “spend at least 75 percent of their budget on programs and services they exist to provide.”

Cary contends that Charity Navigator’s ranking counts some of his group’s contributions to the Medical College of Wisconsin (the main group MACC gives to), Children’s Hospital and the University of Wisconsin Carbone Cancer Center as administrative expenses. “That puts everything out of skew. We’ve tried to work with them (Charity Navigator) in the past on this.”

But Cary’s explanation is contradicted by the MACC Fund’s own 2011 tax form, which verified that it only spends 68.9 percent of its budget on grants to cancer fighting programs. Nor was that an unusual year. The comparable figure was 67.6 percent in 2010 and 68 percent in 2009. That seems pretty high when you consider the group simply does fundraising and has no other function for which it needs staff, and yet takes a higher percentage for administration than 70 percent of charities in the nation.

McGlocklin has been president since 1976 and did indeed work selflessly for decades for the fund. But in 2006 he decided he wanted to draw a salary, and the MACC board approved this. Given that he is board president and probably hand-picked many of the board members, it probably wasn’t difficult getting this approved.

“He works very hard,” Cary says of his boss McGlocklin. “He solicits support. He talks to people.”

McGlocklin and his board  in turn have been generous to Cary, jacking up his compensation. “I’m not to apologize for what I make,” says Cary. “The board clearly feels this is a good investment.”

Are there groups spending more on administrative expenses than the MACC Fund? Undoubtedly. And some of those may be groups raising money to fight cancer. MACC’s performance isn’t terrible.

But it isn’t great, either. By way of comparison, Charity Navigator lists four groups that raise money for cancer, two in NY, one in VA and one in Maryland, that get an overall ranking of anywhere from 57 points to 67 points, compared to MACC’s mediocre score of 43.

This is a fund, moreover, that is very high profile in this community, gets contributions from many athletes and is constantly promoted on Bucks telecasts. The promotion is free but the main guy promoting it, Jon McGlocklin, gets two to three percent of every dollar raised. I doubt if most people viewing the show — or many donors to the fund — realize this. I think the MACC Fund, and its board members, could set the bar a little higher for what the group actually delivers to charity.

Short Takes

-I should note that I’m a fan of Gary D’Amato’s sports stories. He’s a good writer. He’s simply the wrong guy to cover the non-profit sector.

-Speaking of sports, Lori Nickel did a fun profile that, in passing, told us about yet another economic analysis that found no benefit from taxpayer-funded stadiums. It turns out Brewers pitcher Burke Badenhop was an economics major who took three classes with professor Tim Fuerst, then at Bowling Green University. Fuerst called Badenhop “a very hard worker”, then added that Badenhop “wrote a term paper on the efficacy of public-financed stadiums. After reviewing the evidence, he concluded that cities/states should not subsidize the construction of ballparks. . . . they are a boondoggle. I wonder if he still feels this way.”

-Finally, another follow-up related to my column reporting on the high rate of black imprisonment documented in a study by the UW-Milwaukee Employment & Training Institute. Its director, John Pawasarat, did a Sunday Op Ed for the Journal Sentinel which offers some thoughtful solutions to the problem.

 

Categories: Murphy's Law

15 thoughts on “Murphy’s Law: Does MACC Fund Give Enough to Charity?”

  1. Mike says:

    So if Johnny Mac gets 3% of every dollar raised by the MACC fund it would mean the Macc Fund raised 2,900,000 and is giving a total of nearly $2,000,000 to charity given the stats Mr. Murphy puts out there. I think they are probably doing a lot more good than harm.

    We do quite a few non-profits at our firm and you typically see officer’s salaries at 8% or higher of the revenues. They will always defend these salaries by saying that to run a successful non-profit you must operate as if you are a for profit business. For example, for all the hand-wringing about Don Smiley’s salary he makes a far lower % of the gross profits than the guy running the Pabst/Riverside. Therefore, you need to get the best possible people to run the organization and that costs some money to do. By may calculation the total % of the budget going to the officers’ at the MACC Fund is just north of 10% of revenues, which is you sample a bunch of non-profits you will see is pretty typical.

    The real question to ask is whether or not the MACC Fund would be donating more money to charity if these guys weren’t involved. Let’s say you replaced Cary and Mac with Bruce Murphy and some Newaukeen at 50% of the cost. Would the organization still be donating nearly $2,000,000 a year to charity. I doubt it, although their percentages donated might be better so we could feel good about that.

  2. Dohnal(Wis. Conservtive Digest says:

    Wow, they just got off my list. I give to the Scouts and Salvation army where I know no one walks with a bundle.

  3. Matt says:

    Sorry Mike, but the standards you propose are irrelevant. “More good than harm” is a defense to nothing. They should be doing as much good as possible. You can criticize the Charity Navigator as you choose, but the fact remains that they indicate that the charity is not doing as well as it should. Your calculations, even presuming accuracy (are there only two officers drawing a salary)

    I for one was surprised to learn that Johnny Mac got such a good size salary for his “charity work”. I don’t mind at all a person getting a good salary for their job, but I do kind of resent all the hosannas that have been tossed his way for twenty years for doing his job.

    Also, the fact that Bruce Murphy can’t raise as much as star athletes seems a ridiculously inadequate defense. What is the relevance? The MACC fund gets to screw around with money because they raise more money than Bruce Murphy could?

    If you’re going to run a charity run it right. Excuses are for those who have done wrong. You are providing excuses, and not particularly compelling ones. My charity dollars, which I hope help the causes the charities claim to support, can go to myriads of needs. This article suggests that perhaps the funds should go elsewhere (particularly sense it seems the donations that are given to are government entities in the first place.

  4. Tom Schneider says:

    There are lots of great causes and many dedicated charities. For example, there is a Wisconsin Paralyzed Veterans Association. Who wouldn’t want to help paralyzed veterans? And then when you look at Charity Navigator, it reports that 67 cents of every dollar they raise goes for fundraising and administration…. and not much goes to help paralyzed veterans.

    This isn’t a reason not to care about paralyzed veterans, but it is a great reason why donors should do a little bit of research when they give to a cause they care about….because donors want to know that their investment is the best place to make a difference. That’s where Charity Navigator comes in. It doesn’t take much to look up Charity Navigator, enter “Wisconsin” and get an independent rating.

  5. Mike says:

    Matt,

    My point is that the MACC Fund is an organization that is currently raising nearly $2,000,000 that goes directly to charity. That’s pretty impressive. If they replaced McGlocklin and Cary with people at more “reasonable” salaries, would they raise that much money? What should their salaries be? What non-profits out there are raising more money with lower executive salaries?

    If you can show a number of charities that are raising more cash with the officers’ making less money, then we have something. The trouble is, I’m not sure that you can.

    To quote Mr. Murphy:

    “Are there groups spending more on administrative expenses than the MACC Fund? Undoubtedly. And some of those may be groups raising money to fight cancer. MACC’s performance isn’t terrible.”

    Exactly, it isn’t terrible. There’s an argument that it could be better than it is. The problem I have is that the tenor of the article makes it seem like these guys are getting rich off the charity and suggests that better options might be available. This site is a bit too obsessed with what people are making.

  6. dohnal(Wis. Conservtive Digest says:

    If adminstration costs more than 10-15% I do not give. You can check them all out.

  7. RedMark says:

    I’ll love to see the analysis of where all the money made from Urban Milwaukee merchandise goes to, the financial specifics of Fresh Coast Ventures, LLC, what people at Urban Milwaukee make, and their political and city affiliations.

  8. Frank says:

    Good info, but there’s more to consider. The money the Macc Fund and other fundraising groups pass along to charitable organizations gets whittled down once again by the recipient organization’s administrative and fundraising overhead. That means that about half of what’s donated to the Macc Fund actually gets used for charitable purposes. The truth is, the Macc Fund generates gifts that probably would not be made, and in the larger scheme, that may be enough to justify it’s existence. But the Fund adds no charitable value to donors whatsoever. It’s like those people who show up at your door seeking money to protect the environment. They get 40% of what they hustle. The fundraising people who hire and supervise them get another cut. Administrators then take their share. It’s not illegal, and it’s barely egregious. But it is an incredibly inefficient way to give.

  9. Rob says:

    I completely agree, Frank. Good summary of the problem.

  10. Jeramey Jannene says:

    @Chris Jacobs (RedMark) – Urban Milwaukee, Inc. is a tax-paying, for-profit corporation registered in the State of Wisconsin. Unlike tax-deductible charitable organizations, we don’t have to disclose our finances. That said, between the three owners we’re not making much. Starting up an online publication isn’t a get rich quick scheme.

    Fresh Coast Ventures, LLC spun-off Urban Milwaukee when Bruce joined. It broke even last year. Starting up a store is a difficult, expensive undertaking. In addition, doing web development it turns out also isn’t a get rich quick tool. I’m not complaining about any of this, I enjoy what I do and am proud of what we produce.

    No one at Fresh Coast Ventures or Urban Milwaukee has any political or city affiliations besides that we’re all City of Milwaukee residents. Because you appear desperate to find something on one of us, I’ll help your digging. I sit on the Milwauakee County Transportation Services Advisory Committee where I seek to advise MCTS on ideas to provide better service. I’m not paid for my service, not even in free bus passes.

    I’m totally confused how any of this is relevant, but thanks for the anonymous comment.

  11. Keith Schmitz says:

    John Cary is making more than Don Smiley with Summerfest, which we have heard about continually over the past three weeks.

  12. Dave says:

    Good debate and a good topic…one with which nonprofits and donors (as well as I) regularly struggle. For those interested in the counterargument, I strongly suggest watching Dan Pallotta’s Ted Talk “The way we think about charity is dead wrong.” Basically he argues that using donations to raise more funds is smart business. While it decreases the “slice of the pie” for services in the short run, it can help increase the resources going to direct services in the long run by increasing the total size of the pie. For example, 67% of $2,000,000 is more than 90% of $1,000,000. The question is, can the $1,o00,000 organization get to $2,000,000 without more money going to fundraising. I can see both sides of the debate. There’s something seedy on the surface about your donation being used to help raise more money. But we do need to think about the impact of our donations, not simply the percentage of each dollar going towards direct services…the two are not always the same thing. Beyond fundraising, I would also caution against chasing low admin rates for other reasons. First and foremost, good governance infrastructure is built into an organization’s administration. Functions like financial management, auditing, strategic planning, reporting, etc. are included in administration. Just because a high percentage of funds are being directed towards “direct services” doesn’t been they are being spent wisely.

    Again, it’s an incredibly complex issue. But I believe that comparing charities based on admin rates alone is overly simplistic and doesn’t fully measure the organization’s impact on its mission, which should be the ultimate goal of every nonprofit.

  13. Dohnal(Wis. Conservtive Digest says:

    It isn’t complex at all, a high school kid can figure out how much money goes into peoples pockets and how much gets tot he charity. Look at Red Cross, less than 10%, look at other major charities.
    There are lots of cancer charities that have very low administrative costs. These are not supposed to be milk cows for the leaders.

  14. Sam says:

    @ Redmark. You forgot to put your comment in all caps.

  15. Brad Maxfield says:

    It all comes down to whether MACC fund’s score on Charity Navigator is the best measure of it’s value. If you like standardized tests as a measure of academic proficiency then Charity Navigator gives you a number. It also hands out a hokey star rating so you can compare charities like they were movies at the local cineplex.

    To me there are other factors that add value beyond the objective monetary efficiency of overhead/dollars. So if I wanted to donate money to help research childhood cancer based on Charity Navigator ratings, Livestrong looks like a much better operation than MACC fund. But it turns out that cancer charities like Livestrong and Susan G. Komen use their funds to support very little research. Most of their money goes to raise “awareness”. I’m already aware. I want research.

    I could send my money to St. Judes or Bostson. But I live in Wisconsin. MACC fund is regional and sends it’s money into our outstanding local research centers, the Carbone Cancer Center at UW – Madison, the Wisconsin Institute for Medical Research (WIMR) at UW, the Blood Center of Southeastern WI and the Medical College of Wisconsin.

    So, for me, a Wisconsin focus, a pediatric focus, and focus on research funding and research facilities rather than nebulous “awareness” end up outweighing the simple arithmetic presented by Charity Navigator.

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