November 27 isn’t just the first Tuesday after Thanksgiving. It’s Giving Tuesday–and every year Americans get more charitable. According to The NonProfit Times, Giving Tuesday contributions in 2017 were at a record $274 million, up over 50% from 2016. Facebook contributions alone brought in $45 million. And this year the trend is expected to continue.
We give so that we can make an impact — we want to cure diseases, help those in need and assure a better quality of life. We want to defend human and civil rights. We want to make the world a better place.
But all too often, our desire to do good eclipses our need to be informed about what we’re doing. This continues to frustrate me. Consider this: Last year the Tampa Bay Times reported that America’s 50 worst charities took in over $1billion over the course of a decade to pay for-profit professional fundraisers. In one case alone, a charity meant to ease the lives of terminally ill children, only 3 cents of every dollar raised went to help kids in need. And the charity’s founder and his own consulting firms reaped $4.8 million in salary.
So how can we be sure our donations will have the impact we want them to have?
Working with numerous nonprofits I’ve had the chance to speak to many different kinds of donors. And it never fails to surprise me that even the brightest people continue to give based on a knee-jerk response, without researching the organizations. I’d encourage you to ask the following questions before you hit that “donate” button.
Do you truly understand what this charity DOES? Most charities will have some sort of a mission statement on the homepage of their site which explains succinctly what they do, how they do it and what population they serve. Are they funding research for cures? Are they involved in advocacy? Do they help underserved populations? You should be able to get a full understanding of how your dollars will help with very little effort.
What specifically have they been able to achieve? Charity websites, especially sites for well-established organizations, should be able to demonstrate proof of donor impact. How many people have they helped? What legislation has been changed? What new treatments or cures have been funded? If it isn’t obvious, you may have to do some additional homework to determine your cause’s worthiness.
Is it easy to navigate and obtain information from the charity’s website? Does the charity’s site really give you a good feeling for who the organization is, how it raises its money, and how it spends it? If this information isn’t there or you need to work too hard to find these things out.
Does the charity make financial data available? Financial data can tell you a lot. Specifically, you should look for the following:
• How much money goes to the mission vs. overhead like salaries, fundraising, etc.? We’ve normally found that donors can understand why 10 or 15 percent of the money raised will need to pay for salaries or infrastructure. But when overhead expenses get to the 20% level or higher, very often that indicates inefficiencies or bad judgement on managements’ part. Sources like Charity Navigator (charitynavigator.org) and GuideStar (guidestar.org) provide a clear view of revenue and expenses and can help you make an informed decision.
• What are the major sources of contributions, and who are the contributors? How much money is coming from corporate sources and do they have a political bias or an interest that may not be aligned with yours? This is especially important if they are large contributors and have potential influence on the charity’s policies.
Will the charity be sharing your data? Most charities offer donor privacy policies because they understand that donors don’t want their names shared. Before you give, make sure that your name is withheld from being shared with other sources.
Will the charity allow you to determine how your dollars are spent? Many healthcare-related charities in particular allow for what is known as “directed giving” — allowing donors to direct dollars to a specific aspect of the mission. Do you wish to provide patient support? Find cures? Advance legislation on Capitol Hill? Focusing your giving dollars can help you maximize your sense of impact.
Does the charity compare well to others with the same mission? Charity Navigator ratings can help you find out performance norms for your category. If your charity has direct competitors, evaluate them as well.
Has the charity recently undergone any negative press? Charities aren’t immune from scandal, deserved or undeserved. Check social media and press coverage to see what people are saying and how issues have been handled. Again, look at Charity Navigator. Feel comfortable with the organization’s leadership before you give your hard-earned money.
Do your homework and give generously. It’s the best way to have a truly joyful giving season.
Andy Semons, Strategic Planning Partner, has worked with many nonprofits over his career and during the past seven years at IPNY, a NY-based brand communications agency with a large base of nonprofit clients.