Sunday, September 18, 2005

Chicago Tribune Attacks Farm Aid

When I read reporter Jason George's skewering of Farm Aid, my first instinct was to find reasons for the group's apparently poor performance. According to George, only 28% of Farm Aid revenues went toward "grants" while the standard for charities is 65% or more. That statistic was alarming enough to raise his article to the top five of most e-mailed articles since the organization's 20th anniversary concert is in the Chicago suburbs today.

Then I dug deeper. It turns out the story is flat-out wrong, based on a false premise. According to Charity Navigator, Farm Aid spent 74.2% on "program expenses." This is the category on which the 65% guideline is based. Farm Aid, like many charities, is about more than just handing out grants (awareness and advocacy being two other objectives). Now it is clear why the Farm Aid people interviewed by George seemed surprised by his accusations--he was inventing his own standards. It is hardly fair to measure a subcategory of one group's expenditures ("grants") and compare it one-to-one with the broader category ("program expenses") for other charities.

As far as I can tell, George's biggest mistake was trying to count concert expenses as "administrative" or "fundraising" rather than "program" expenses. But one of Farm Aid's primary goals is to raise awareness, and putting on the concerts is the way they achieve that goal. It doesn't generate a lot of revenue once expenses are deducted (although performers are free, Farm Aid probably has to pay for security, advertising, and many other costs), but it sure gets the word out about the plight of family farmers.

This article is a prime example of an untrained eye digging through annual reports and drawing uninformed conclusions. I expect better from a leading daily newspaper. I have contacted Mr. George and the Tribune's Public Editor about this misleading story. I'll let you know what I hear back from them. Because the story has been e-mailed so much, I fear that Farm Aid (with which I have no affiliation, by the way) will be tarnished since most recipients will never see the correction/clarification that is owed by the Tribune. I couldn't think of a less charitable 20th anniversary gift.

UPDATE 09/20/2005 - I am still waiting for the Tribune to acknowledge their mistake, but music critic Greg Kot
reports that Neil Young fought back at a press conference before the concert on Sunday.

UPDATE 09/23/2005 - As of this afternoon, the Tribune hasn't said anything with regard to this article. I was assured by one insider, however, that they are looking into it. Something curious has happened between this morning and now (3 PM): a search for "farm aid" at no longer displays any of the articles surrounding last weekend's event. Let's hope a retraction is in the works.

UPDATE 09/25/2005 - No such luck. While Greg Kot lets Neil Young defend the organization in an interview published today, the story includes this disheartening paragraph:

Clearly, Young had plenty to discuss with his visitor. But the first order of business was Farm Aid and the Tribune article. In response to Young's remarks and a phone conversation with the artist last week, James O'Shea, the Tribune's managing editor, said: "The Tribune stands by its story."
How can you stand by a financial story that shows a complete disregard for standard accounting practices? The article clearly compared Farm Aid's grants (28%) with a non-profit rule-of-thumb for program expenses (65%). George screwed up and O'Shea is standing by his screw-up. Disgusting. Maybe I should start giving to Farm Aid--I can start with the money earmarked for my Tribune subscription.

UPDATE 09/26/2005 - The Tribune finally printed a response from people familiar with Farm Aid. They note that Farm Aid does much more than pass out grants. I wish they had hammered the Trib more directly for the apples to oranges financial comparison as well. I suppose this is now a closed issue from the newspaper's standpoint. By the way, the article that sparked this entry is back in the Trib's online search results after a mysterious weekend absence.


Anonymous said...

Thanks for setting the record straight.

Anonymous said...

I read the Tribune story, and I then went to and checked Farm Aid's standing against its peers - the other 221 charities in its same subcategory of Social Services under the Human Services category. It came in 177th out of 222 - not a very good rating IMO - in the bottom 20%.

David Johnsen said...

Farm Aid's rating isn't great, but my point was that it is nowhere near as bad as the Tribune made it sound. I don't think it is reasonable to compare Farm Aid with the broad category of Social Services either. Are homeless shelters, vocational programs, meals on wheels, etc. really "peers?".

I see two inherent inefficiencies with Farm Aid. First, they are pretty small with only $1.2 million annual revenues. There are probably enough fixed expenses that the percentages would look better if they made more money (both efficiency rating and capacity rating would likely increase). Second, they are doing several things rather than having one targeted program as many of the top rated charities do. If all Farm Aid did was pass out money to farmers, then it would be more efficient and more highly rated, but I doubt that it would be as effective in serving and representing the family farmer.

Anonymous said...

I checked facts. A lot of the money went for phoney-baloney counciling services. What a waste of my donations. I'm sure the therapist started each session with "How does it feel to be losing your family farm" while looking at his watch!

David Johnsen said...

What sort of counseling services? Debt or financial counseling would certainly be appropriate, as would career counseling for farmers who have lost their land and their job. Counseling doesn't necessarily mean sitting down with a psychiatrist and talking about your mother.