It is a widely held belief among donors that “good” charities are those that direct a high percentage of donations directly to their cause. Nonprofit groups that commit more money to their missions and less to fund-raising and operating expenses are seen as efficient and more trustworthy.

“But what if the accounting some nonprofits are employing to give us a number that will earn our trust is not to be trusted?” writes Dan Pallotta on Free the Nonprofits, a blog on Harvard Business Publishing’s Web site. “What if the ultimate measure of trustworthiness is highly vulnerable to deceit?”

Mr. Pallotta notes that some charities “game” that system and appear “holier” than others by labeling all or some fund-raising expenses as part of the cause. While he favors a “broad definition of the cause,” charities should tell the public “loud and clear” what that definition is.

“I have a problem with shortcutting critical donor education (i.e. about the importance of adequate administrative and fund-raising expense) in the interest of false piety and high revenues,” Mr. Pallotta writes. “That actually undermines donor education — it teaches the public that fund raising and social progress can be gotten for free, which is exactly why it rebels against sector spending on organizational strength and capacity.”

What do you think?