Like most controversies these revelations have served as the final straw in an already difficult philanthropic environment. If there is one thing I have learned from those who are very generous it is their desire to know that their donated funds are being used wisely. They worked hard for the money and they expect that in the hour of their generosity they are met with equal dignity and efficiency on the part of the charity.When they see extravagant living on the part of charity officials they are not pleased. When they can't see into the organization or they can't get answers to simple questions their mistrust increases
It is really about trust and stewardship. As stewards of the consecrated funds of others we at charitable organizations have a dual mandate to not only serve the undeserved with the donated resources but to serve the donor by acting transparently and efficiently. We owe it to donors to treat them and their consecrations with dignity and respect. Granted, some donors give for less than idealistic reasons. I believe most though are giving because they find it difficult, rewarding and something they feel driven to do. They have "skin in the game" and we owe them more than our gratitude.
One final point, in this day and age of fast communication across networks spanning the globe, the concepts of stewardship and transparency are increasingly important. Trust is the new currency and differentiator among charities. Charities are going to have to work hard to gain the trust of donors but they are going to have to work harder than ever before to maintain that trust. One small miss-step could cause a wildfire, destroying trust and slowing the work of the charity.
In the past we could have focused mainly on acquisition efforts. Donors only had the ability to talk to those close to them about their bad experiences with charities. Now they can talk to lots of people around the world in a flash. One upset donor of the past could have been ignored and chalked up to the inevitable "churn" in the industry. Not anymore. We can't afford churn. In fact we have always been under the mandate to take care of folks. The tools are becoming more sophisticated to help us do this but again in the end it comes down to doing the right thing.
The Red Cross in China is in hot water right now because their trust has been tarnished and the flames have been fanned by the internet. Whether the Red Cross is guilty or not they will have to work hard to restore trust.