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Posted by on Nov 27, 2013 in Uncategorized | 2 comments

Holiday Charity Panic

Holiday Charity Panic

A bit of an off-topic post here, and a long one, but it’s something important for which I have a degree of expertise as somebody who works with and for nonprofits.

Coming up on both the holiday season and the end of the year, we’re entering a time of year when a lot of folks start thinking about making charitable donations.  As a result, your mailboxes, virtual and physical, are probably starting to get filled with appeals from basically any charity that you’ve ever given any money, plus a whole lot that that bought your name and address from some other organization or marketing firm or whatever increasingly-creepy forms of internet tracking are being developed these days.  This can be frustrating and is certainly a big waste of paper.

We also have the next in a long line of popular articles outlining how the world of charitable giving is a minefield of fraud and waste, and how you really should be relying on experts to tell you what charities are best so that you don’t end up throwing your money away.

If you’re a New York Times reader, you may have seen the op-ed by Ken Stern, former executive of NPR, entitled The Charity Swindle (!!!).  This op-ed is eleven paragraphs long, with ten of those devoted to a very scary story about the “U.S. Navy Veterans Association”, a purported charity that raised $100MM in contributions before being exposed as a complete and utter scam.  The last paragraph then advises you to rely on charity rating sites like GiveWell to tell you who to give your money to because it’s “the only way to ensure that money reaches those in need.”

Okay, yes, there are scam artists in the world that take advantage of other people’s good impulses.  If your only connection to a charity is a brochure you got in the mail or a telemarketer’s pitch, it’s probably not a great idea to give money yet.  It’s important to do a little research and make sure the right people are actually benefiting from your donation.  If you do, you shouldn’t worry about con artists lurking around every corner.  The alarmist tone of this op-ed is unhelpful, unnecessary, and kind of dangerous in that it has the potential to scare people off from making contributions to nonprofits that aren’t extensively vouched for by “professional” rating agencies.

If you look at GiveWell’s site, you’ll find a very short list of charities – a list of two – that they vouch for this year.  They encourage you to either give to those or to other organizations that meet their standards of being able to formally demonstrate their financial efficiency and the impact of their programs.  They also have some alarmist language about picking the wrong organization to support:

Charities that demonstrably change lives are the exception, not the rule. Why? Fundraising often involves social and emotional manipulation, and almost never involves fact-based demonstrations of programs’ effectiveness.  This means that lots of charities raise money and run programs without ever demonstrating that their programs actually work. Why should charities have to demonstrate that their programs work? Isn’t it obvious that most programs charities run help people?

It’s not.

The glaring problem with GiveWell’s explanation here is that they suggest that a charity being impactful is the same thing as having demonstrable measures of that impact.  They are not the same thing.

While this seems like a reasonable and straightforward prospect that charities should be able to clearly and measurably demonstrate the impact of their programs, it is not.  First of all, measuring impact is a tricky proposition in the best of cases, as most folks engaged in the world of nonprofits will gladly tell you.  For example, if your nonprofit runs literacy programs for elementary school kids, do you measure impact by counting how many kids go through the program?  Or maybe how much progress they make during the program?  Or whether once they finish the program they continue to keep up with grade level reading over the next two years?  Or through high school?  If it’s the last, can you only measure your impact with your students years later?  Now imagine you’re a social justice advocacy group working over the course of years to fight for a political and economic system that works fairly for poor people, people of color, or LGBT folks.  How do you produce measurable progress metrics here?  If you can’t, should you give up on your cause?  For that matter, I wonder how Ken Stern measures the impact of NPR improving people’s lives.

The other problem is that developing a measurement methodology and then actually tracking your progress take staff time and money that a lot of small organizations just don’t have, no matter how good their programs might be.  It’s especially difficult for nonprofits to invest in the infrastructure to measure impact when everybody gets on their back about making sure to spend as much as possible on programs, rather than on infrastructure.  GiveWell gets around this conundrum by generally discouraging you from giving to “small, unproven organizations” (though they do provide some actually useful criteria for making such donations if you must).

By the way, this isn’t just problem with GiveWell.  Other rating organizations (Charity Navigator, for instance) rely on clunky efficiency measures such as overhead rate that don’t provide all that much insight into whether a a nonprofit is helping people while providing over-simplified numerical scores.  The rating industry as a whole, at least at this point in its development, should not be a gatekeeper for charitable giving.

Look, ask yourself this: If there’s a soup kitchen in your town, should you forego donating food or money to them if they can’t provide formal, independently-verified documentation of their program impact?  Of course not.  Judging whether the organizations you support are effective isn’t always that easy, but there are more reasonable methods you can use to figure out how to make charitable gifts this holiday season:

  • Do a quick Google search on the organization and see whether they’re getting mentions from sources other than their own marketing materials.  That should help you determine whether you’re dealing with a scam or an organization with sketchy practices.
  • Read the documents that the organizations produce.  Not just the fundraising brochures, but documents they produce that explain what they are trying to achieve and how they plan to do it.  Is the explanation seem logical to you as an intelligent human being?  Can they point you to some results, even if they are narrative or anecdotal?
  • If you consider nonprofits that carry out programs near you (despite GiveWell encouraging you to get more bang for your buck overseas), you can probably visit and see some of the work that they’re doing to get some additional comfort in making your donation.  Maybe even do some volunteering while you’re there.
  • This is one I feel a bit conflicted about, but I’ll include it anyway: Consider the size of the nonprofit’s budget in relation to how much you can give.  Your $100 gift could mean something very different to an organization that needs $200K a year as opposed to one that needs $20MM a year.  There are also exceptions here though – big organizations like public radio and television really do rely on a ton of contributions from individuals and I don’t hesitate to support them.

Don’t let alarmists scare you.  Dishonesty is the exception, not the rule when it comes to charities.  Waste sometimes happens within any organization – for-profit or non-profit – but that doesn’t mean nobody is being helped.  Doing something is better than doing nothing.

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2 Comments

  1. Should this say “…if they can’t provide formal…”

    “should you forego donating food or money to them if they can provide formal, independently-verified documentation of their program impact?”

    • Indeed, thanks.

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