Category Archives: Initiative: Charitable Giving & Accountability

Operation Kids is changing the way people look at charitable giving through raising expectations of accountability, transparency and efficient use of donations.

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

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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

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Don’t count out the little guys

We are fortunate to live in a country where many of our citizenry are willing to donate their time and money to help fight the incredible social problems we face. Indeed, our willingness as a people to contribute of our time and money has become a fundamental part of our national character, and it has contributed to the rise of a robust third or nonprofit sector in the United States.

In my interactions with government and nonprofit leaders from around the globe, I have come to realize that our belief that the average person can make a difference is not unique.  However, I do believe the degree to which we believe it far exceeds our international counterparts.  It reminds of something that the former U.S. Ambassador to the Russian Federation Alexander Vershbow articulated while trying to explain why our nonprofit sector is so strong during a speech in Moscow. He said:

Americans believe very strongly that individuals can change society through their own efforts. And they understand that individuals working together to further a common goal can make even bigger changes than by working alone. These beliefs, born perhaps of our unique historical experiences, are not of recent advent. The nineteenth century Frenchman Alexis de Tocqueville, who visited and reported on American society, wrote “Americans of all ages, all stations of life and all types of dispositions are forever forming associations. In democratic countries, knowledge of how to combine is the mother of all other forms of knowledge; on its progress depends that of all the others.”

The United States support of charitable organizations remains unsurpassed. In 2008, Americans collectively gave more than $307 billion to charities representing the equivalent of 2.2% of the gross domestic product. This percent of gross domestic product more than doubles the next two highest nations in terms of charitable giving, the United Kingdom and Canada, which gave only 0.73% and 0.72% respectively.

Americans are donating their time as well. In 2008, more than 26% of adult Americans volunteered in their local communities. As the Independent Sector notes:

The power of the charitable community grows from its ability to bring together people who share a commitment to improving lives. They select the charitable community to make those changes because it offers the freedom to experiment with new ideas, to respond to needs without delay,…and to encourage all efforts, both large and small, that will improve the quality of life for people across the country….

The ability to utilize volunteers is an incredible asset to the nonprofit sector.  It serves to reduce operational costs and provides opportunities for nonprofits to leverage relationships in their communities.

All of these factors have contributed to the unprecedented expansion of the nonprofit sector itself. Annually, the number of 501(c)3 organizations grows by 1% to 5% resulting in more than 1 million nonprofits currently registered in the U.S. today. It is estimated that an additional 300,000 or more operating charities have not registered. The vast majority of these nonprofits are locally based. Though many of us can easily name national charities such as the American Red Cross, Salvation Army, or United Way, according to the Idependent Sector only “four percent of all charitable organizations have annual budgets of more than $10 million. Most are small, with nearly three quarters operating with budgets of less than $500,000.”

Regardless of their size or budget, these small charities are making a fiscal impact. Not too long ago, the World Bank examined the return on investment local charities were providing in the Washington, DC metropolitan area.  They found that organizations like the Manna Food Center in Montgomery County could leverage every dollar it received in cash donations into $5 worth of food through food donations and distribution. Another organization, Stop Child Abuse Now in Northern Virginia, recruited volunteers to serve as court appointed special advocates for nearly 200 children annually, saving the state government more than $400,000 in attorney’s fees. Additionally, each year the Independent Sector designates a monetary rate for a volunteer’s time.  While clearly the value of a volunteer exceeds any dollar figure that can be assigned, the 2008 dollar per hour rate is $20.25. If a volunteer were to spend two hours each week mentoring a child or working in a soup kitchen through one of these local organizations, the dollar value of that one volunteer’s time over the course of a year is more than $2,100. These same types of savings can be found in almost every community in the United States.

Community-based organizations are able to utilize voluntary initiative and community donations to tackle problems that the government is unable to adequately address on its own and do it for less money. So as you look to donate or voluteer, don’t count out the little guys.

Christopher

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Lessons from Ghana: Making a Difference

My recent trip to Africa reminded me of some of the finer points of delivering assistance and support in areas of great need. These are lessons learned from many years of being involved in areas like Thailand, New Orleans and other areas of unique and extraordinary need.

It is my experience and observation that generous people are drawn to certain areas and certain types of need. The conditions in many regions of Africa are a perfect example: Celebrity focus, news headlines and other media reports has created an awareness of living conditions in parts of Africa. That is good. However, awareness does not always represent a solution: sometimes action does not even represent a solution.  As we like to say within our organization, “Generosity is not the issue, effectiveness is.” Part of being effective is delivering what is truly needed in the eyes of the beneficiary.  

When delivering aid to a people, regions and cultures we may not fully understand, there are things to be aware of that, in context, easily explain why so many efforts do not work. I am going to try to articulate a couple of these important details and perhaps spark deeper thought and discussion when it comes to international giving.

Truthfully, we cannot underestimate cultural differences. We frequently see aid delivered in the form that the donor feels appropriate, rather than what the community in need really desires and recognizes. We saw this after the deadly Southeast Asian tsunami in 2004 when well-meaning groups shipped large quantities of coats and scarves to a hot, humid region of southern Thailand; the intentions were good, but the effort was lost on people with very different and specific needs. We see a similar dynamic in many international efforts: housing development for people who culturally would not live in the types of shelter being constructed; a failure to involve appropriate and respected leaders who can be the lubricant between those who want to help and those in need; Last but not least, trying to jump ahead of the process and bring people to a point we as donors feel they need to be, rather than a point they desire to be.

As donors, we need to consider the culture we seek to aid from a perspective of dignity and sustainability. Anthony Oliver-Smith writes,

“The best outcomes imaginable [are] systems in which people can materially sustain themselves while beginning their own process of social reconstruction.” 

Essentially his is the “Teach a man to fish …” philosophy. The sound bites and clips we see in the media, which serve a great purpose by bringing public attention to global need, often abbreviate the situations to the point where a generous and prosperous nation like the U.S. is compelled to react immediately. Again, it is with the best of intentions, but in ways that we see as appropriate from our perspective.

The fact is that when people are in desperate circumstances, you usually find that some sort of displacement is at the heart of the situation. Whether it is caused by political unrest or natural or man-made disasters, there is almost always a dual sense of disconnect from the things they hold dear and at the same time a pride in what they consider to be their heritage. In these stressful times, many look to religious tradition for identity; they seek to reestablish what is meaningful to them. They depend on those they trust the most. That is the starting point.  

We as donors and as caring global neighbors need to remember this. Again, quoting Oliver-Smith,

“We should approach the goals of reconstructing and reconstituting community with a certain humility and realism about the limits of our abilities. Such humility and realism have not characterized to any major extent, the planners dealing with uprooted peoples to date.”

Our usual American-driven focus on cost-containment and efficiency must be maintained to be sure, but not to the point of excluding the needs and wants of the very people we are trying to help. I cannot say it any better than Oliver-Smith:

“Donor-driven …designs [can] endanger the connection that people establish with their built environment, violate cultural norms of space and place, inhibit the reweaving of social networks and discourage the re-emergence of community identity.”

With this backdrop, the Forever Young School in Ghana (the dedication of which was my reason for traveling to Ghana in the first place) is a model. It was created in partnership with local leaders. It was built by local artisans. It is staffed by local teachers who received training from outside sources, but are allowed to teach in a manner relevant to their local community. The dignity and autonomy of tribal leaders is recognized and respected. Local culture was not considered an obstacle, but an asset from which to build. The project is well-designed and takes into account details in a variety of areas, including transportation needs, recreation, academics, health and medical support. It has become the cause of community celebration!

The day we arrived for a special ceremony opening the school, families and local leaders assembled at 4:00 am to prepare for our visit, which was not scheduled until 2:00 that afternoon! They sang for us, they danced, they provided food … the sense of gratitude was at a level that can only been seen when a proud and deserving community is helped to achieve what they need in a manner meaningful to them.

As a result, I left feeling like the donors and organizations that supported this school had created something they could feel proud of – both from a relief-of-needs perspective and a donor efficiency perspective.

It was truly inspiring.

-Rick

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Report from Ghana

I had the privilege of spending last week in Accra, Ghana. It was an opportunity to see first-hand the efforts of two of our fine Operation Kids Charities: Right To Play and Forever Young Foundation, in addition to a new micro-credit effort by the KOMART Foundation.

There is more to tell than I can cover in several blogs, but I wanted to start with this. As part of our client service of managed giving, we are typically conservative when it comes to international aid; certainly not because we do not care, but rather due to the extreme potential for fraud and various levels of misappropriation. Africa is general is an area where an ability to deliver aid effectively has been questionable at best.

I have been asked many times by many donors about the solicitations they see on TV and via direct mail, if those “faces of need” really receive the donated help? Sadly, the answer is, “Sometimes they do, and sometimes they don’t.” Anyone who follows this blog or any of Operation Kids’ activities knows that this inconsistent outcome is simply not good enough for us.

In regions such as this, it is even more critical that we get on the ground and observe unfiltered, the delivery of aid efforts and the tangible results. In the case of Accra and the aforementioned charities, I am very pleased to say, the report is good, and the results are real.

First let me comment on Right To Play. The concept of using sports to teach certain skills and attitudes may seem simple on the surface and for those in developed countries you may associate the teaching aspect of sports with sportsmanship, teamwork, discipline, etc.  While those are all real and valid byproducts of a well-coached sports experience, in developing countries the effort takes on an entirely new and life-saving dimension.

Trained Right To Play coaches have the trust and confidence of the children they coach. Based on that relationship and the innocent distraction of “play,” a soccer ball can be used to represent a virus – say HIV – and a simple game can show a child for the first time how the virus spreads. The games address other critical issues such as peaceful conflict resolution which can, in regions where children are forced into military duty sometimes as young as 11 or 12, be the difference in whether some of these children experience a childhood in any sense, or go on to a normal adulthood. The simplicity of the Right To Play model is the genius of it, and to see it first-hand is inspiring to say the least.

As far as the other programs we observed, including the work of KOMART and Forever Young Foundation, I would prefer to address their efforts with individual stories. Over the next couple of months I want to explain in detail, how they have overcome the major issues that are blocking effective aid in so many regions of Africa, and introduce you to some of the individuals who live in Ghana, are Ghanaian by birth, and have not only elevated their own lives, but the lives of thousands of young Ghanaians. I think you will find their stories fascinating and the images compelling.

-Rick

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Off to Ghana for School Opening

I am off to Ghana this weekend to join two of our great charitable partners. The primary purpose of the trip is to open a new school constructed with the support of Forever Young Foundation and a coalition of other groups led by Robert Gay, an esteemed Operation Kids board member. While there, we will also participate in a major Right To Play event. It is interesting to see what can happen when dedicated people who run efficient and effective organizations combine efforts.

For anyone who attended the Steve Young Hall of Fame Gala or the Ann Romney Lifetime Achievement Award Gala in Boston in 2007, your donations went a long way to make this school possible. Funds raised for these two organizations at these galas, in part, went toward this project.  We wanted you to know that your gifts had an impact on these great projects in Ghana. Stand by for photos of what your donations have accomplished!

-Rick

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A Welcome Perspective

I would like to welcome a new employee to Operation Kids whose background and expertise, represents everything we are about. The prospect of bringing greater accountability to charitable giving, is something that we have to work at every single day, and Christopher Lindsay, our new Senior Charity Analyst, helps our mission in several important ways.  

Christopher joins us from his most recent post at the Electrical Safety Foundation International where he was Director of Programs. Prior to that, he served under the previous administration in the lead White House office for nonprofit policy issues. While there, his responsibilities included evaluating the results of Federal programs focused on mentoring, substance abuse recovery and prisoner re-entry. In addition, he played a pivotal role analyzing data and reporting trends on over 25,000 nonprofits who partnered with the government in providing social services – representing billions of dollars. 

This experience is unique and we are fortunate to find someone with such a background. One of our primary goals at Operation Kids is to refine the process of vetting and managing charitable giving. We often ask the question of donors, “Do you know where your last charitable gift went?” The answer is typically, “Yes, it went to (name of charity here)!” But when the question is more directed, and we ask donors if they know where it went within the organization – to  which program or which part of the organization, the response is far too often, ”I don’t really know.”

America is the most generous nation on earth – giving well over $3 billion to charity last year alone – and we give despite a general lack of trust when it comes to large charitable organizations. I have cited before the recent statistic that only 1 in 10 Americans “trusts” major charities. That is troublesome on its face and mystifying when we realize people have a need to give back, despite expressed concerns with where their giving may ultimately end up. It makes me wonder how many more people would give – and how donations might be even more generous, if they had confidence in what their money was doing and who it was helping.

This is exactly WHY we as an organization are here. And it is why we are thrilled to have someone like Christopher on our team asking the “hard questions.” I am thrilled when I consider the direct benefit this is going to have for donors and charities alike, as we are further able to provide a better understanding of how donors’ dollars are put to use and what kind of impact it has.

We have said for a long time now that when it comes to giving, caring is only part of the process. In addition to that, there must be analysis, there must be expectations and there must be accountability. It can be done. We have seen it in New Orleans, in post-tsunami Thailand and in virtually every state in the nation. It is a contagious attitude because once you see what can be done when all of a gift makes it to the child in need, you will insist on that efficiency from then on. I can promise you,  we will continue in its commitment to deliver those elements to caring donors.

-Rick

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