If you're at a party and want to drop a factoid that should then give everyone something to talk about, mention that the Salvation Army (yup, the red kettle folks) in California owns 87 homes and condos worth $52 million. You might, just to extend the conversation, mention that nationally, the Salvation Army owns about $4 billion worth of real estate but that includes commercial properties.
Yes, it is shocking! A nonprofit with all these properties, some, according to the LA Times article, really, really nice properties. But now for some other facts. Salvation Army officers, the career folks who manage the Army's work, make around $12,500 a year. They get a car to use to do their work. They get housing -- the Army-owned housing just mention in the previous article.
The Salvation Army, through these real estate properties, have, at least until the more recent housing crisis, found a great way to invest their limited resources, the resources they depend on to achieve mission, and get a short term benefit (housing for their managers) and long term benefit (financial profits when needed). In marketing there is an addage: perception is reality. Donors want to believe that the quarter, dollar or five-dollars they drop in the kettle makes it possible for the Salvation Army to do the work they do. Reality, there's way more challenges than those kettles address and the money to address those challenges needs to be creatively earned. Hence, the Salvation Army thrift stores. Hence, real estate investments.
Ok, so maybe there's a transparency problem and donors, who perceive that all the money the Army lives on comes through those kettles. Yes, maybe the Army should say something about that. But would donors not find a way to then defend why not to give? In essence though, the Army faces the same challenge faced by those nonprofits I regularly blog about who have chosen to pay competitive wages to their execs. It's the right thing to do but donors have a problem with perception. Nonprofits need donations but they also need creativity. They must be competitive and get the most out of these donations. And, like the Salvation Army, they must constantly emphasize their outcomes -- that's what it's all about.
As noted in the LA Times article, "In 1997, the late management guru Peter Drucker told Forbes magazine that the Salvation Army was "by far the most effective organization in the U.S. No one even comes close to it in respect to clarity of mission, ability to innovate, measurable results, dedication and putting money to maximum use."