Imagine for a minute that you have been approached to contribute a large sum of money to a well known non-profit organization...
Fundraiser: Thanks for taking the time to meet with me today. You see, we are the largest organization of our kind. We provide financial assistance to the elderly, unemployed, and housing assistance to the poor. We help define educational standards and build critical infrastructure. We do a lot of other things as well, but the list is too long for one conversation... and the truth is that we are in some financial trouble right now. We need to raise funds in order to make certain we can continue to provide our services without interruption. So, we are targeting wealthy individuals like you to contribute more.
You:
(Reaching for your wallet) Wow! Sounds like you do a lot of good work. I already give a substantial amount, but I would love to contribute more. How much do you need?
Fundraiser: I'm not really sure. How much can you afford?
You: Excuse me? I am not sure I heard that right, you don't know how much you need?
Fundraiser: Not exactly, but we know we need more. The things we are doing are so important that we are just out raising the money, we'll decide how much is enough later.
You: Oh I see... I wouldn't normally do this, but I am anxious to do my part. Perhaps I could see a copy of your budget and then I could decide how much I can give.
Fundraiser: Yes about the budget.. well, unfortunately, we don't have one.
You: You don't have a budget?
Fundraiser: No, you see... we got a new CEO in 2008 and since he has been in charge, we haven't needed one. We just take what we spent previous years and go with that.
You: But there was a major financial collapse in 2008, everyone has had to tighten their belts. You are still using the same budget assumptions? No wonder you are in financial trouble. I don't think your new CEO is doing his job.
Fundraiser: He is a really nice guy, very personable. Handsome, good speaker, very popular. Represents the organization very well. He graduated from Harvard and won a Nobel Prize.
You: But you haven't had a budget in almost four years.
Fundraiser: It isn't really his fault. It's our board of directors. They are hopelessly deadlocked and they can't agree on a budget.
You: But he is the CEO, why hasn't he sat them down in a room and told them that he can't run the company without a budget.
Fundraiser: Between you and me... it's better if there is no budget. If we have one there will be no avoiding major cuts in important programs. Without our programs, people will go without food and lose their homes. Elderly people will starve and freeze to death.
You: But if you are having financial problems, where are you getting the cash to run the programs now?
Fundraiser: Our board managed to secure a very large line of credit. We are using that until we can get kind and generous people like yourself to contribute your fair share.
You: That is insane. You are heading towards a total collapse. There are a lot of people who depend on you. If you don't control your spending, you will eventually run out of money and I only have so much to give. What you are doing is totally immoral it is going to lead to a disaster. Your CEO should be fired.
Fundraiser: Well, we are pretty sure you can afford it. But remember it's not the CEO's fault, it's the board of directors and the bad economy.
You: I am going to have to be honest with you. I would like to contribute and the work you do is very important, but until you get your finances straightened out... any money I give will be wasted. Come back to me for more money when you get a new CEO and have a real plan on how you will spend it.
Fundraiser: We have been getting a lot of that lately. If you change your mind, you can contribute
here...