Excellence in Giving

Not too long ago I had the opportunity to listen to a wonderful speech that was given by Thomas Tierney, chairman and cofounder of Bridgespan, at the 2009 Philanthropy Roundtable Annual Meeting.  For those who have not had the opportunity to listen to it, the speech can now be found on the Philanthropy Roundtable’s website. It was a refreshing oration which I believe every donor (and nonprofit leader) would benefit from listening to. One of the focuses of the speech was to identify several brutal facts facing donors who are seeking to achieve greater impact through their contributions. Since this year, more than any other in recent memory, donors are interested in seeing their seeing their contributions stretched a little further to help more people, recognizing these facts is essential if you want to optimize the impact your philanthropy is having.  

The first brutal fact that Tierney identifies is that donors are only as good as the organizations they give to. This becomes particularly tricky when a donor considers the sheer number of nonprofits that are out there – more than a million at the latest count.

The second fact is that excellence in giving is self-imposed. It is very easy for a donor interested in average returns to stroke a check to the organization of his choice and continue on his or her merry way.  However, donors who want to see more children helped with their donation must raise the bar in their giving.  It was easy to appreciate his view that, unlike the for-profit sector, there are no predators in the nonprofit world.  In other words, if a charity underperforms, there is no larger charity that will come and absorb it. Underperformers, although often quite well-intentioned, abound in this sector.  It is left up to the donor to determine what nonprofits meet their high expectations.

The third fact that donors must face is that there are obstacles and handicaps that appear in the nonprofit sector, which are not present in the for-profit world that most donors are familiar with.  There are no capital markets for nonprofits, nor any sort of pipeline for identifying and promoting talent. Effective nonprofits must be repeatedly asking themselves the difficult questions about how they define success and how they are going to achieve that vision if they want to have the kind of impact that discerning donors are looking for.

Compound those brutal facts by this week’s press release issued by a collaborative of nonprofit watchdogs, including GuideStar and Charity Navigator, which essentially encouraged donors not to rely on overhead and fundraising ratios as a measurement of effectiveness in their favorite nonprofits: tools that have been historically used to determine a nonprofit’s efficiency.

I completely agree with what the press release had to say.  Overhead ratios do not relate to the impact that a nonprofit is having on its target population.  Not to mention these ratios encourage nonprofits to sacrifice investing in resources and talent that would increase their effectiveness but would negatively affect their ratio. On top of it all, I have never seen two nonprofits interpret the rules for determining overhead costs in the same way.

So what does that leave donors? Since excellence is self-imposed, how can donors interested in achieving more than average returns on their donation navigate the obstacles presented by the nonprofit world and find the partners that deliver the results the donor is looking for? It can be terribly overwhelming. The good news is…there is help. 

Our role at Operation Kids is to provide the research and resources necessary so that our clients can make informed giving decisions and achieve the impact they are hoping for – without taking any fees. We do this because we firmly believe that more donors giving to more effective charities results in more lives changed. If you are interested in raising the bar in your charitable giving this holiday season (or any time), contact us and see if we can help you.

 -Christopher Lindsay

Teaching Children to Give

Our founder and board chair Dennis Webb addressed an audience in Connecticut this past week hosted by the Family Office Association. The conference was designed for the benefit of high net-worth families, but Dennis addressed an issue that we should all consider, regardless of income level.

Whether we are wealthy or just getting by, it is quite typical that we as parents or perhaps grandparents, experienced struggles that our children have not. When parents or grandparents make the necessary sacrifices for education or to build wealth and security, the children and grandchildren are the beneficiaries without a full perspective of the efforts made on their behalf. Without dismissing the challenges of youth, many kids today live lives of relative ease, complete with cell phones, cars and laptops – sometimes failing to understand what it takes to be productive and independent or to act for the welfare of others. They are often spared the struggle and experience only the fruits.

A wise quote says, “We work so hard to give our children everything we didn’t have, that we sometimes forget to give them what we did have.” Dennis addressed this concept of instilling in our children the values that created the lives they now live. This includes a work ethic, a sense of caring and an ability to sacrifice for others. He spoke of personal experiences in taking his children on humanitarian aid missions and the differences in their lives as they experienced real need first-hand. As one of his then teen-aged sons said on a flight back from one such mission, “I had to go half way around the world to understand how blessed I am.”

There is hardly a parent who, in an effort to get a young child to finish their vegetables, has not used this line: “There are starving children who would love to have that food.” The fact is, there really are. About a third of all the children in the world would give anything for the leftovers we discard from our tables. Our children may know this, they may read about these things, but it is very easy to miss the point unless they have seen it first-hand.

The point is this: we have a great deal in this nation. Even if we are struggling at times, we are, relatively speaking, rich. I had the distinct privilege of spending some time with Marc Lubner, a gentleman and philanthropist in the truest sense of the word, from South Africa. As he so powerfully stated, “I have seen people in South Africa who are desperately poor, reach out to help others who are even poorer. That is their wealth; that is their method of coping – to reach out to another in even greater need.”

Wherever you may fall on the income spectrum, you and your children live better than most. We have so much, and while the current credit crunch may round some edges off of our self-indulgent society, we need to dig a little deeper and live with gratitude and awareness of those who have less. We need to teach this to our children so that we can have a hope of changing things. Not only is it the right thing to do, it is also the key to changing the circumstances of the less-fortunate. We would do well to teach our children that caring for others is less about “helping the poor” in the abstract, but more about our global community.

Lila Watson, part of an Australian Aboriginal group said (although she resists taking credit for a thought she claims was born of a collaborative process),

“If you have come to help me, you are wasting your time. But if you have come because your liberation is bound up with mine, the let us work together.”

An interesting thought as we approach the Thanksgiving season.

-Rick Larsen