How Many Charities is Too Many Charities?

Humorist Evan Esar once defined statistics as “the science of producing unreliable facts from reliable figures.” That’s how it feels a little more than a year after writing the article “Beyond the Rhetoric: the Economic Impact of Charity in Door County” for the 2011 Philanthropy Issue of Door County Living magazine.

At the Door County Community Foundation we’ve long argued that Door County’s charities are a major economic engine that brings tourists and seasonal residents here. After all, our arts organizations provide the cultural atmosphere people love and our environmental charities are the stewards and guardians of our natural treasures.

The Door County Living article summarized a study of economic data collected by the Community Foundation and showed in hard numbers how incredibly important charitable organizations are to the health of our local economy. No other community in Wisconsin relies more on the charitable sector to drive the economy than ours. (The original article is available online at http://www.doorcountycommunityfoundation.org).

One fact from the Community Foundation’s study has been quoted more than any other. From a review of publicly available non-profit tax returns, we identified more than 350 tax-exempt organizations that are based in Door County. If 350 sounds like a lot that’s because it is. It’s far more than you would expect in a community of roughly 28,000 full-time residents.

Unfortunately, this fact has been used to justify conclusions which are simply not backed up by the numbers. As Esar also wrote, statistics are the unusual “science that enables different experts using the same figures to draw different conclusions.”

For example, some argue that Door County has too many charities. Yet for the life of me, I cannot follow the logic or find the data which supports this questionable contention. It’s almost as if the mere fact that Door County has a lot of charities is supposed to be conclusive proof that Door County has too many charities.

So these good folks often rephrase their argument by claiming that Door County can’t afford this many charities. Yet the data, the non-profit professionals, and a common-sense look at the state of charity in Door County contradicts this contention.

While there are more than 350 tax-exempt organizations incorporated in Door County, only about the largest 100 of them have revenue of more than $25,000 a year. In fact the smallest 100 of Door County’s non-profits typically have less than $5,000 of revenue – if any revenue at all. Many of these tiny organizations were created for very narrowly defined purposes and will never have, nor ever need, significant streams of revenue. Of those charities that do, however, they are working in a community with ample financial resources to support them. According to the 2005 Wealth in Wisconsin study commissioned by Wisconsin’s community foundations, Door County is the second wealthiest county in the state, behind Ozaukee County. Our per capita household net worth is about 60 percent higher than the state average.

Further, at a time when charities nationally are struggling along with a poor economy, an informal survey of Door County organizations last December showed just the opposite is occurring in our own community (see “The State of Giving in Door County” Peninsula Pulse, January 6, 2012). Across the board, our large charities are reporting giving levels are up, sometimes substantially. While giving at our smaller organizations hasn’t increased, they generally are reporting donations are flat or down by a only small percentage.

But if the wealth of Door County and the reports from the charities aren’t enough to convince you that our community can afford our charities, think of this from a logical perspective. The Small Business Administration says that over 50 percent of small businesses fail in the first five years. Then consider how few of our local charities (almost all of which meet the definition of a small business) have closed their doors and shut down for lack of revenue. If Door County can’t afford the charities it has, presumably they’d be closing their doors at an alarming rate. Yet in the last four years, the only significant closing of a charity that I can recall is the Fairfield Museum in Sturgeon Bay. Yet off the top of my head I can name dozens of restaurants and retail shops that went out of business during that same time.

There probably is an argument to be made that Door County’s charities should look at ways to consolidate operations to minimize administrative costs and maximize their impact on the community. But it’s hard to find evidence that we have too many tax-exempt organizations or that we can’t afford it.

Perhaps it’s because we’re thinking of our number of charities as something negative. These more than 350 organizations didn’t spontaneously burst into existence. Virtually every one of them was created by a group of caring, well-meaning volunteers. Some of these good people saw a problem in our community and couldn’t stand idly by while it continued to exist, so they created a charity to address their concern. Other folks had a dream for Door County and they launched a new organization to turn that beautiful idea into reality.

Charity is America at its best. We don’t wait for government to solve our problems or expect that an aristocracy is needed to lead us. We see what needs to be done, then we gather together to do it – often through a charitable organization. I love that we have so many charities in Door County. It both inspires others to give back and is a testament to how passionately we want to sustain this community we love.