On May 16, 2019, I presented at the annual Economic Summit. Shortly thereafter an article appeared in the Independent about the event. The article was well-written; however, there were some subtleties that caused some confusion and misinterpretation — and not the fault of the journalist. During the talk I gave a brief discussion of the nonprofit sector and showed a graph of the size of contributions in the county. At the time I mentioned that Direct Relief continues to grow. However, contributions to nonprofits other than Direct Relief fell. "Total contributions to S.B. County nonprofits crested $1.5 billion, with the lion’s share going to Direct Relief. In fact, year after year, data show Direct Relief is absorbing a growing percentage of all philanthropic giving. Not so good,'" I was quoted as saying; that was an unfortunate utterance by me. I take full responsibility for the misinterpretation surrounding the graph and the all-too-brief discussion. The language was too loose and open to all kinds of interpretation. The "absorbing a growing percentage'' is the problem and was not intended to mean there was a fixed amount in the county and Direct Relief was taking more of it. I was taken to task by high-ranking individuals at Direct Relief, and rightly so. Mea culpa.
What are the facts and where did I go wrong? Well, the graph is
certainly accurate as far as information obtained from the 990 tax forms. The
problem is that my words made it seem as if Direct Relief was growing at the expense of other nonprofits.
Nothing could be further from the truth. Direct Relief does not compete with
other nonprofits in Santa Barbara for funds.
Here is really what is going on and should have been articulated.
Typically over 90-95 percent of Direct Relief's revenue is from non-cash
product — most all of which is in the form of medications and medical supplies
and all from sources outside Santa
Barbara. Direct Relief's model encourages the donation of such items, the value
of which reflects their regrettably high
market prices over which, obviously, Direct Relief has no control; they
must be reported as revenue in Direct Relief's financial statements. The
percentage of total revenue attributable to such in-kind contributions has
always been disproportionately high and will likely remain so.