Social Entrepreneurship - Change.org: The One Thing You Need to Know Before You Donate to Charity this Holiday Season

The One Thing You Need to Know Before You Donate to Charity this Holiday Season

Published December 11, 2008 @ 07:14AM PT

The holiday season is one of the busiest times of year when it comes to donating to nonprofits and causes. Every organization and their mother has some sort of matching offer or competition they're promoting, and it seems like every one of them knows how to get to you. Even for the involved giver, it makes it hard to figure out what to spend your limited resources on. One solution long-proffered is to focus on organizations that have low overhead, but as even the former leading proponent of this line of thinking, Charity Navigator, announces that its moving to expand its assessment metrics, the question is what does someone really need to consider to make their holiday giving decisions?

I've invited some of the top philanthropy and social change bloggers to answer just that question. Over the next few days I'll be linking to their posts explaining what they think is the one thing you need to know before you donate to charity this holiday season, and updating this starter post to include some of their most insightful wisdom nuggets. At the end of it all, we'll have a great resource for you to think about as you make your own donations, both this holiday season and year round.

To kick things off, I think the one thing you need to know is who plans the programs you intend to support? More specifically, how are the people who are the supposed beneficiaries involved in that process? Most organizations talk a lot about "empowerment," and "engagement," and I think they do it with the best of intentions. But its a lot harder to really engage communities from the very beginning of the development process than it is to give them leadership roles once things are planned. In my (to be fair, limited) experience, it sometimes doesn't matter how "well-thought-through" a program is if the people who are supposed to benefit from it weren't doing some of the thinking.

So if everyone organization says this, how do you find out who is legit? Do your homework! It's hard but you can use charity review sites to get some information. If its a big organization, Google it and see what people have written about it in the past. If its a small organization, email the founder or the staff and ask them. Remember, you're not just donating to make yourself feel good - you're making an investment in hope and an investment in someone else's future.

Who's got something else?

Update #1: Beth Kanter
Nonprofit social media guru Beth Kanter just posted her response to this conversation. She writes that "...most of the donations I tend to make have been requests from friends or colleagues to support their charity. My giving is usually in very small gifts - $10 here and there, sometimes $20. So, I make decisions based on the friend's credibility and judgment and if I'm not sure, I ask the friend."

I think it's a great suggestion, in one way because it "doubles" your impact in the sense of your both investing in a cause as well as the people behind it which I think is important to growing a healthy nonprofit sector.

Update #2: Amy Benziger - Social Capital Media
One of the awesome people behind the Social Capital Markets conference this fall, Amy Benziger, blogs about how investing in microcredit programs means the opportunity to use the same dollars over and over:

"I think that the greatest way to give a gift this holiday season is to visit websites like Kiva.org and Microplace.com and start an investment portfolio. You’ll not only be giving individual entrepreneurs around the world the gift of a micro-loan to start their business, you’ll also be giving the gift of dignity and empowerment that the responsibility of an investment brings. The money that they will pay back will later go to fund another entrepreneur to get off his or her feet"

Update #3: Paul Brest - President, William and Flora Hewlett Foundation
Paul Brest, President of the William and Flora Hewlett Foundation and Co-author of Money Well Spent: A Strategic Plan for Smart Philanthropy, asks whether your donation actually makes a difference. In this post he suggests that the key information about any nonprofit is not "what it aspires to do, but how much of a difference it is actually making."

Still, and I think importantly, he allows for the fact that this is an emergent process:

"If an organization doesn't yet have the means to collect data on actual outcomes, a reasonable proxy, at least for the time being, is to clearly describes its goals, its strategies for achieving the goals, and why it believe the strategies will work. On the flip side, an organization's inability to provide this information should be a warning sign to donors."

Update #4: Holden Karnofsky - GiveWell
In the last year or two, one of the strongest and smartest voices for a serious reevaluation of the way we give has come from Holden Karnofsky and the folks at GiveWell. GiveWell's premise - that not all, and maybe not even many, charities are doing great work and that we should say "no" to those that aren't - may seem harsh to some, but they're backing it up with serious qualitative research about which organizations are creating real change.

Given all that, it might be no surprise that Holden's advice to holiday givers is that "you need to know that your favorite social program might just not work."

"The first $17,000 I ever donated (personally) was to programs that I now believe don’t work. During my years in the finance industry, I gave to the best organizations I could find for improving education (jr. high and high school) in NYC.

I considered education my favorite cause. I assumed that equality of schooling was the key to equality of opportunity. I didn’t have the time or the energy to question this assumption. I now believe this assumption is badly wrong, for reasons that are outlined here.

I wish I could take that money back: de-fund the “small schools” and extracurricular activities I supported (both of these are programs I now know to have very questionable, if not negative, track records) and instead fund programs for early childhood (where I believe inequality of opportunity really begins) or international aid (where it’s far more drastic).

I wish that money had gone to organizations that I really believe are changing lives in a significant and lasting way, but it didn’t. Please don’t make my mistake."

Update #5: Britt Bravo

Nonprofit tech consultant extraordinaire Britt Bravo uses an incredibly effective analogy to share her advice to holiday donors. She suggests that our holiday giving is like buying gum at the store:

Do you know why they put gum, keychains and other small, low-cost items at the checkout counter? So that you'll throw them in your cart at the last minute as an impulse buy. Even though you didn't go into the store planning on buying a 3-pack of ChapStick, it seems like a good idea in the moment, so you do.

Holiday giving can be like that. You receive dozens of letters and emails asking you to support all kinds of causes, and the folks sending out the letters and email are hoping that when you open their message, even though you weren't planning on it, something will tug at your heartstrings in that moment, and you will write a check, or click a PayPal button.

Instead, she suggests people create a plan and follow it through. Check out the full post for more specific advice on how to do just that.

Update #6: Sharon Schneider - The Philanthropic Family
My friend Sharon writes an incredible post about this year how you evaluated yourself and follow through on your philanthropic commitment. I could not agree with her more that people are increasingly finding joy in building an "integrated life" where their buying habits, careers, and charitable activities are all aligned with their values. "The new philanthropist is anyone who strives to live all aspects of his or her life informed by the same values that inform that person’s charitable giving." Read the full post here.

Update #7: Sean Stannard-Stockton - Tactical Philanthropy
Veteran philanthropy blogger rockstar Sean Stannard-Stockton suggests some really important common sense questions for any one's personal due diligence. Importantly, he suggests that people figure out which other nonprofits are working on the same issues, and ask why their intended recipient is the best to invest in.

"All good nonprofits should be able to offer a good pitch for why they have an attractive strategy for affecting their cause. So the second question you need to ask focuses on what makes this nonprofit different. For instance, both the Greenpeace and the Environmental Defense Fund focus on the cause of protecting the environment. But while the Environmental Defense Fund seeks market-based solutions and partners with corporations, Greenpeace works towards “exposing the dirty secrets of corporate polluters like Exxon” and organizes protests. By asking a couple of nonprofits working on a given cause how they are different from each other, you will begin to figure out which nonprofit you want to support."

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Great point, Nathaniel.
One way to see how well an organization is *really* engaging their program beneficiaries is to see who is on the board of directors. It's a best practice to have at least one or two current/former beneficiaries involved in governance and oversight of an organization (when possible).

Posted by Shannon Moriarty on 12/11/2008 @ 08:25AM PT
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That's a really smart suggestion Shannon. With nonprofit boards so often focused on fundraising, seeing "stakeholder" voices on the Board would definitely send a strong signal about that org's priorities.

Posted by Nathaniel Whittemore on 12/11/2008 @ 11:55AM PT
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Hands down, the one question I would ask is, "What percentage of your Board members made a gift this year -- not ticket purchases for the gala, raffle, auction, retreat expenses, sponsorship, etc.? What percentage simply wrote a check for 'nothing' in return?"

Note that the question is not "How MUCH?" That is far less relevant than how many made gifts. If the number is anything less than 80%, I'd pass (I'll give the organization the benefit of the doubt on the other 20% and assume that newbie board members simply did not have a chance to write their checks yet).

I wouldn't invest in a company whose leadership had no financial stake (risk?) in the organization. I won't invest in a charity whose board members wo';t invest in the charity themselves

Renata Rafferty
Author, "Don't Just Give It Away: How to Make the Most of Your Charitable Giving," Foreword by Paul Newman
http://www.raffertyconsulting.com
rrafferty@raffertyconsulting.com

Posted by Renata Rafferty on 12/11/2008 @ 04:03PM PT
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Another thing to keep in mind this holiday season is your ability as a consumer (not just a giver) to make a positive impact. Buying fair trade, eco-friendly products for friends and family is a great way to "be a changemaker." My favorite site is Global Goods Partners, which has a wide variety of fun, handmade, sustainable products. I encourage the socially conscious shopper to check it out!
www.globalgoodspartners.org

Posted by Lauren L. on 12/11/2008 @ 08:45PM PT
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Giving should come naturally. I don't think we need to stress over the absolute best possible place. There are so many nonprofits doing great work that it would be hard to go wrong. If someone is already an "involved giver," it shouldn't be difficult to decide if a charity is using its resources wisely and achieving a worthwhile mission. Other than that, I plan to look within to decide what most matches my values and how I see the world. I'd rather spend time and energy doing that than scouring a 990 form.

Posted by Annie G. on 12/12/2008 @ 02:27PM PT
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Two posts might be of interest to you:
In http://www.theroadtothehorizon.org/2008/11/rumble-gifts-with-difference-for-xmas.html I tried to give an overview of "Xmas gifts that make sense".

And in this post http://www.theroadtothehorizon.org/2008/11/rumble-change-starts-here-roads-social.html I kicked off a social project on my blog motivating people to participate several Kiva projects. We collected nearly $4,000. Shows that as a blogger, we CAN make a difference.

Peter

Posted by Peter Casier on 12/12/2008 @ 03:01PM PT
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Renata,Board giving is critical, but I think of it more as a litmus test. I see almost no reason why a board should have less than 100% participation in the prior year. Do you?

Posted by Sean Stannard-St... on 12/16/2008 @ 06:57AM PT
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Nathaniel
This is a good discussion, and as I pondered the question I realized there was not much new that I need to ask this year as compared to any other year (Though, given recent Madoff developments, one might ask larger nonprofits who manages their assets). I always ask, or find out for myself, "who else does what you do?" and "why are you a better choice than them?" It is the same question I consider in hiring someone, buying something, eating out - what are my choices and where does this option fit into that landscape.
Thanks for asking,
Lucy

Posted by Lucy Bernholz on 12/16/2008 @ 11:58AM PT
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In addition to giving of our time and resources for the holidays, this month we are also celebrating International Volunteer Day.

I work for Intel and am one of 54 percent of our employees who volunteered time this year and helped to meet our goal of contributing 1 million volunteer hours. Check out my blog where I've included three quick tech tips on volunteering your time and resources this holiday season.
s well.

Posted by Alison Wesley on 12/16/2008 @ 12:59PM PT
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Hi,
I work for an organization called ChristmasFuture (www.christmasfuture.org). I really liked your post, partly because it validates the model that our web-based, non-profit works from.

Let me explain:
Essentially, ChristmasFuture encourages people to refocus a portion of their holiday spending towards ending extreme poverty. We’ve got an online giftcard system that allows people to give a gift to someone they care about and then the gift recipient uses the balance of the gift card to support a development project that they choose.

Here’s why I think we’re relevant to your post: ChristmasFuture acts as a third-party to vet organizations doing on the ground development work. This saves people looking to give to charities time, because ChristmasFuture does the research that you’re post encourages people to do. We don’t put projects on our site unless they meet our strict criteria.

Of course, I believe people should research where their money is going, so I’m not against the investigation that you encourage. That said, many people are busy and don’t have time to do the research you’re suggesting. They simply want to know that the money will be used effectively. ChristmasFuture acts as that trusted third-party who does the research for people, sort of like Kiva except we have a wider focus on developing communities (micro-finance is a part of the solution, but not the full solution, for bringing communities out of poverty).

Oh yeah, I should mention that, even though we act as a third party vetting good organizations doing great on-the-ground work, 100% of the funds allocated to projects goes to projects. We raise our operational funds separately. We even cover the cost of credit card transactions.

Right now, we’re a Canadian registered charity. In 2009, we’ll have US charitable status and launch other sites to facilitate year round giving.

I’ll close now. Check us out at www.christmasfuture.org and please spread the word about us (blog post, twitter, etc.), if you like what you see.

Take care,
Leif

Posted by Leif Baradoy on 12/17/2008 @ 01:54PM PT
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Hi from the UK. We have our own independent charity review site over here, <A href="http://www.intelligentgiving.com">IntelligentGiving.com</A> which has plenty of other info and advice as well. It focuses on the transparency / reporting of charities primarily, rather than the Charity Navigator type of admin:funding type ratios.

There's also <A href="http://www.philanthropycapital.org/">New Philanthropy Capital's</A> work which does reports (ostensibly for philanthropic investors) on good charities operating in particular fields.

I think the "are there any beneficiaries / clients etc on the board" is a relly good one. We've made that a key rule of thumb for our social franchise of SSEs. Currently, we have 3 SSE Fellows on our board, and our CEO is also one.

On the "I won't invest in a charity whose board members don't invest in the charity", this is more of a US practice (though perhaps a good one), so you would struggle to find any UK charity you could invest in Renata! I guess the investment from the board can also be in terms of connections, time input, pro bono services and so on as well.

I guess my line tends to be that it's about (measured) social impact, about quality delivery, about transparency and openness, about robust systems and governance, and about good communication of all of the above.

Posted by Nick Temple on 12/18/2008 @ 06:46AM PT
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Sorry Nat: could you sort my links out!

P.S. I also meant to say that having beneficiaries / users on the board can't always sit easily with every member of that board making a financial contribution....?

Posted by Nick Temple on 12/18/2008 @ 06:48AM PT
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Good discussion. But I think this is a second-order question. The first questions start with the donor: "Why am I doing this (giving away my money)? What do I want to get out of it?" Many donors are blind to the fact that their philanthropy is often as much (or more) about their needs and desires as it is about the change they're interested in.

Sharon's post points out the power of honestly examining one's motivations and expectations and adjusting one's level of commitment. Holden's post highlights what happens when there's a mismatch between a donor's expectations and an organization's programs. Because he values "bang for the buck" so highly, he figures his first $17,000 did little good (I disagree that the organizations flat-out "didn't work," but agree that they are highly likely not to have worked to the degree Holden would have liked). What he seems to be looking to support are the most efficient interventions as measured by quantitative evaluation, and thus has adjusted his philanthropic practices accordingly.

Posted by Tony Pipa on 12/18/2008 @ 12:47PM PT
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Tony,
Great point and thanks for bringing the discussion back to the first order. I actually found my way to this post through Sharon's post.

There are many great organiztions out there, however the way in which they communicate to people is critical. There should be an implicit answer to the donor's question of "Why am I doing this (giving away my money)? What do I want to get out of it?" in the NPO website/materials.

Right then--looks like I just created more work for myself.

Posted by Leif Baradoy on 12/18/2008 @ 02:02PM PT
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Author Biography

Nathaniel Whittemore: Evanston, IL; Nathaniel is the founding Director of the Center for Global Engagement at Northwestern University, which works annually with hundreds of students in dozens of countries around the world through curricular programs and student project incubation.