The wastefulness of fund raising

2006/07/24 at 11:53

I’ve recently started reading several good economics blogs. Via one of those blogs, I ran across this post about the economics of charity races:

Charity runs where participants solicit friends, family and colleagues for donations have always perplexed me. . . The puzzle is the wastefulness of the training effort. Those soliciting me for sponsorship have cited upwards of 40 hours spent training for the event; we can view this training time as being pure waste from the charity’s perspective. An alternative arrangement where race participants instead devote their training time to providing volunteer work for the charity, followed by a parade of volunteers rather than a race, would seem to satisfy the criteria listed above: costly and verifiable effort coupled with publicity. And, the hours of wasteful training would be converted into useful work.

This analysis reminds me of my own thoughts regarding fundraisers for school and other groups. Children and their parents spend vast amounts of time peddling stuff that people may or may not want in order to earn the group a margin of the money collected (to be fair, it seems the margins vary widely from one campaign to another).
As such a parent, I don’t really see that my child is gaining any particularly useful experiences from the endeavor (not compared to the experiences of spending time with the actual organization for which they’re collecting money), and I think that I could just donate more money than the profit margin on the goods that my kid sells and save everyone a lot of hassle.
One of my favorite fund raising events of the last few years was when the local high school band was raising money to participate in a parade across the country. They sold band booster signs to put in your yard. In reality, you got a sign in return for a donation. Yes, the band members had to spend time raising the money, but I assume the cost of the signs was small compared to the donation being requested ($20 or $25, as I recall), so the profit margin was high. They were not exactly just begging for handouts, they got free advertising with every sale, and they weren’t trying to sell people something that they didn’t really want or need.
Don’t get me started about Girl Scout cookies.