Posts Tagged ‘donation’

Excellence in Giving

Thursday, December 3rd, 2009

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

Stronger Charities = Greater Impact

Wednesday, July 22nd, 2009

Growing up in middle class America, I remember vividly the first time that I encountered poverty. As a young boy, my family took a day trip to Tijuana, Mexico. There, recklessly wandering through side streets, I saw living conditions whose depravity can never adequately be captured by camera or pen. But it was looking into the eyes of a hungry boy, who could not have been older than me, as he begged for change that left the indelible impression.  Shortly thereafter, I saw the same look in a young homeless girl outside of a restaurant in New Orleans. I recognize now in their expressions the hopelessness shared by many in impoverished circumstances. They were “tired of wishes, empty of dreams” to borrow Carl Sandburg’s phrase.  It was my first lesson that hunger and despair are very real, and they know no borders or boundaries.  

Unfortunately, the plight of these children is not unique: it is legion. Many of the children in our country face seemingly insurmountable challenges.  These types of social problems are not new nor are they ever going to go completely away.  But how our society combats these issues is constantly evolving and being refined.

We live in a very generous nation, and this generosity has contributed to a vibrant community of nonprofit organizations. While many of these charities are founded and staffed by individuals who passionately care about ameliorating the circumstances of children worldwide, the ability of these nonprofits to show results for their work varies greatly.  Because of this, it is often difficult for donors to judge which charity will most effectively put their donation to work. 

This is one of the reasons why Operation Kids’ model is so valuable.  Each potential charity partner is carefully screened to ensure that it is indeed “best-in-class.” For us this assessment begins by carefully reviewing the organization’s tax filings, overhead expense ratios, program budgets, and fundraising activities. We go beyond the financials, however.  We want to know if the charity can clearly demonstrate the effectiveness of its programs and if it is achieving operational excellence in its given area of focus. This is a hands-on process, and it allows us to become intimately acquainted with how each charity operates – both financially and programmatically. After all, donors deserve to know where their giving is going, and they deserve to know it is making a real difference.

We do not just stop there.  Our charity partners are integral parts of the social fabric of their communities.  For many who are underserved and in desperate situations, these organizations are able to treat the root cause of their problems, not just the symptoms of hunger or addiction that the rest of us see. So we work closely with these charities to increase their effectiveness, diversify their funding sources, and collaborate with other community partners to better serve those in need. As the capabilities of these nonprofits grow, their ability to meet and solve important child-related needs expands.

Our model is a double-lift.  It provides donors with the transparency they need to make important decisions while ensuring they see their Return-On-Contribution™ once their gift is made.  It also builds the capacity of charities so that they can more efficiently provide services and be able to attract the support they need. Of course, the real beneficiaries of this entire process are ultimately children in need, the reason behind everything we do.

-Christopher

Christopher Lindsay recently joined Operation Kids as a Sr. Charity Analyst. You can read more about his background here.