Are Your Trustees Satisfied?

I’m always interested in why donors choose different means of formalizing their giving and the ever-expanding set of options they have to do so. Because of that, I read the Center for Effective Philanthropy’s recent report What Donors Value: How Community Foundations Can Increase Donor Satisfaction, Referrals, and Future Givingand related blog posts.

In a survey of more than 6,000 donors of 47 community foundations, the Center found that:

  • The strongest predictors of donor satisfaction are donors’ sense of the foundation’s level of responsiveness when they need assistance and their perceptions of the foundation’s impact on the community. (The first predictor isn’t new information and the second one confirms community foundation’s hunches and hopes.)
  • 1 in 4 donors were “moderately satisfied” or less with their community foundation. (Oddly, the report glossed over this second point. I don’t know what good business manager would be happy with that metric.)
  • A donor’s level of engagement wasn’t a driver of her or his satisfaction. (This shouldn’t be a surprise, but likely was to many community foundation staff).

I steward a multi-generation family foundation and am writing this while attending a symposium by the National Center for Family Philanthropy. Family foundations don’t have the pressures that community foundations create for themselves to grow assets, grow the number of donors with funds, and grow the number of donors who give to the community foundation’s initiatives. However, the report surfaced important questions for those of us in the family philanthropy business.

Shouldn’t family foundation staff worry about the satisfaction of our board members and/or trustees? For the most part, they choose to participate in these roles, even if that choice is coerced by other family members.

  • What would customer satisfaction metrics look like for family foundation board members? How would those metrics be different from those for other nonprofit boards?
  • What if 25% of your family foundation’s board members weren’t very satisfied with their experience with the foundation? How would that damage family dynamics behind the scenes and harm discussions at the foundation? How would that change their description of their experience to their friends and colleagues who sit on nonprofit boards?

And, shouldn’t family foundations pay attention to the report’s third point about engagement? Community foundations often set metrics for increasing the level of engagement of donors. Those metrics are often drawn from university fundraising models. The community foundations falsely presume that success means more donors moving up a ladder of participation in the community foundation’s activities, communications tools, and goals. As the Center’s report notes, donors can be satisfied even when they have, or desire, little or no involvement from the foundation in their giving decisions.

The majority of family foundations (and many donor-advised funds) are established as vehicles for families to give together and learn together about giving. Ideally, the foundations are safe places to learn and grow together. But it is easy for staff and founders to fall into the same trap as community foundations – that all board and family members desire to be fully engaged in the foundation’s work.

  • How do we ensure that our family foundations are safe places to learn and don’t force a one-size-fits-all approach for participation?
  • How do we design customer-centric experiences that meet our volunteers where they are? Can we allow them to flexibly dive in or dial back over time, perhaps learning from techniques of good network management models?
  • How do we blend the engagement expectations of founders or other family leaders with trends in how younger people choose to interact with organizations and choose to give of their time and skills? Especially for endowed foundations, how do we ensure that institutional culture doesn’t automatically turn people away?

Unfortunately, I have more questions than answers at this point and NCFP’s forum didn’t have sessions addressing the topics. I’ll be doing my own research on the issues and hope that you’ll feel free to send me good ideas and your own experiences.

Those Darned DAFs

Donor-Advised Funds (DAFs) sure seemed prevalent in the press over the holidays.

The National Philanthropic Trust’s recent report on DAFs showed that, compared to 2011, in 2012: contributions to DAFs grew 34.6%, assets grew 18.9%, and grantmaking grew 6.7%. The growth in grantmaking exceeded the growth in grantmaking by private and corporate foundations over the same period, as reported by the Foundation Center. The rapid growth of DAFs likely continued in 2013, with three donor-advised fund managers reporting increases of more than 20% in giving in a December 13 Chronicle of Philanthropy article.

Community foundations and financial advisors, of course, published articles showcasing donor-advised funds as an easy, quick, and cheap means of taking care of year-end giving. Many highlighted the ease of donated appreciated stock and other assets. These articles and posts weren’t unexpected given the general increase of charitable giving advice and news in November and December.

Less expected was the amount of press generated by Professor Ray D. Madoff, of Boston College Law School. She is crusading for higher regulation of DAFs, calling them “warehouses of wealth” that are “taking over the charitable landscape” and starving “true charities” of resources. Her December 6 New York Times op-ed spawned additional coverage in the Boston Globe and Los Angeles Times. Other sources cited and commented on those articles. She rebutted the criticism she received by countering Five Myths About Payout Rules for Donor-Advised Funds.

Madoff had picked up on a thread of criticism of DAFs in the Chronicle of Philanthropy throughout 2012, including op-eds by nonprofit consultant Alan Cantor and comments by the National Center for Responsive Philanthropy’s Aaron Dorfman. Conservative commentator Scott Walter labeled the criticism Unphilanthropic Carping.

I don’t share the skepticism of Madoff, Cantor, Dorfman, and others – at least, not yet. Here are my quick takes on their concerns:

1) DAFs are primarily tools for financial advisors to make money from charitable giving.

Financial advisors, accountants, and attorneys also earn money from advising private and community foundations, other trusts, and even nonprofit endowments. The critics don’t seem worried about these sources of profit. In addition, there’s no data that the advisors are making more money, per philanthropic dollar advised, on donor-advised funds.

2) Fund advisors are likely granting little from their DAFs because there is no regulation forcing them to do (e.g. no equivalent to the 5% rule for private foundations).

There is no data about DAFs stockpiling charitable funds without making grants. The National Philanthropic Trust reported an average payout rate of 16% for DAF managers, far higher than the average for private foundations. In addition,advisors to the funds may have legitimate reasons for paying less in some years and more in others, including: the timing of large gifts to the funds, using funds to engage children and grandchildren in philanthropy, developing and implementing strategic giving plans, and holding payments back to incentivize matching gifts at a nonprofit.

3) Grants from DAFs can be anonymous. At minimum, this anonymity shields donors from nonprofit fundraising appeals and prospect researching. At its worst, the anonymity is suspected of being a cover for funding of controversial issues.

Donors seek anonymity for a variety of personal reasons, including religious beliefs and fear of discrimination or retaliation. Progressive critics appear suspicious of DAFs held by conservative donors, and I suspect the converse is true. I’m not willing to remove the option of anonymity for donors just because I might not like the charities they support. See my previous post Why Your Grant Proposal is Unwanted for other reasons donors to foundation or DAFs choose to be circumspect in their giving.

4) Because the overall rate of giving in the U.S. is fairly static over time, the rapid growth in giving to DAFs means other charities are receiving less money.

This argument – the shift in the use of a limited pie of charitable dollars – seems a reasonable hypothesis, but is darn tough to prove. There are too many other variables in the equation, including: timeshifting of funds (the same dollars that would have gone to non-DAF charities are distributed later); the amount of giving to DAFs that might not have gone to charity at all if not for the DAF; the increased competition from the growing numbers of nonprofits; and other trends impacting giving preferences of different generations.

Your thoughts?

If you’re a fundraiser or grant writer, I’d love to hear from you. How have donors’ use of donor-advised funds tangibly impacted your nonprofit for good or bad?

Addendum 2/14/14: Rick Cohen from the Nonprofit Quarterly – a thoughtful skeptic of organized philanthropy – posted an article today with additional rebuttals to the DAF critics. He ends the article with this sentence: “For charities interested in reaching individual donors, getting comfortable with donors who give through donor-advised funds has to be a top priority in the new world of fundraising.” 

Grassroots vs. Organization Culture in Giving

Aside

Working in philanthropy often means simultaneously holding competing values as true, or at least viable. And, there are many classic tensions of values in philanthropy to navigate. Strategic philanthropy, relationship-driven philanthropy, and impulsive giving can all useful tactics. Donors can be both builders and buyers in their support of nonprofits’ growth. The freedom of nonprofits to evolve in the pursuit of their missions and the firm legal protection of donor rights can comfortably co-exist. Effective conservation happens through both systemic policy change and individual action.

I’ll admit that I’m a “both-and” philanthropoid and a pragmatic optimist. I’ve worked for too many types of donors and grantmaking committees to be completely stuck on one approach to giving or community problem-solving. Of course, I have biases based on experience and upbringing and a firm set of values for my personal giving. But, I’m generally willing to help donors and grantmaking committees pursue the philanthropic pathways and giving styles that are most meaningful to each of them.

My “both-and” brain was excited when I read Have Your People Call our People, a recent opinion piece in NPQ by the John R. Oishei Foundation’s Paul Hogan. Hogan wrote about the competing tensions of grassroots culture and organization culture in philanthropy. In short, donors biased to a grassroots culture celebrate individual neighborhood champions and entrepreneurs. Donors biased to an organization culture put their faith in established nonprofits and structured planning processes.

Hogan does a good job of showing the faults in both cultures and of describing the challenges of navigating the middle ground between them. His experience likely feels familiar to members of Grassroots Grantmakers and other grassroots-oriented donors and philanthropoids who are surrounded by organization culture types.

I’ve encountered both criticism and support when I’ve worked in both of those cultures. Like Hogan, I see the value and problems of both. Most of all, I wish more donors, grantmakers, and nonprofit leaders were willing to work in both cultures – simultaneously holding both to be truly viable and helpful.

Would Your Nonprofit Succeed With Donors Who “Give With Purpose”? (part 2)

Written for Philanthrogeek.com and cross-posted at http://www.philanthrogeek.com/creative-fundraising/nonprofit-succeed-donors-give-purpose/

Let’s try a quick exercise: pull up the website of your favorite nonprofit. Can you answer any of these questions based on the information on that site?

  • Does the nonprofit demonstrate familiarity with evidence and best practices related to the need it addresses by citing research, data, reports, past experience, or other reliable sources of information?
  • Does the organization demonstrate cultural awareness and roots in the community?
  • Are its results likely to stick over time for the intended beneficiaries?
  • Do the board members play a meaningful role in supporting the organization through their work and financial support?

These are just four of the 35 questions from the new RISE Assessment Tool to evaluate nonprofits. The Learning By Giving Foundation offered this tool to thousands of people who participated in its Massive Online Open Course on philanthropy, Giving With Purpose, this summer. The course describes “giving with purpose” in two goals: a) satisfy your personal motivations for giving, and b) invest in high-performing organizations. In my last post, I gave my assessment of the course itself and its ability to meet the first goal. In this post, I’ll dig into the second goal.

The RISE Framework

Course instructor Rebecca Riccio created the RISE Framework for Social Change to define four “hallmarks of strong organizations”: Relevance, Impact, Sustainability, and Excellence. The RISE Assessment Tool has a set of questions and rating criteria for each hallmark. The Foundation hasn’t released a final version to the public yet, but I pasted the questions into a document (download the PDF – RISE Assessment Tool – 2013-Aug Vsn) as an example.

Hundreds of the participants in this summer’s course tried using the assessment tool on the web sites of the 700+ nonprofits nominated by other participants. The nonprofits ranged from all-volunteer, faith-based efforts to large, long-time civic anchors. Ms. Riccio briefly encourages people to visit nonprofits in person. But, the design of the course biases participants toward finding information on nonprofit websites and online services such as Guidestar and Charity Navigator.

What if Donors Use the Tool?

In my use of the RISE Assessment Tool during the course, and in feedback I saw from other participants, nonprofit websites mostly came up short on answers. The tool will likely inhibit donations if, as Ms. Riccio suggests, donors use it before they choose to make a donation.

First, most nonprofits are small and underinvest in their communications, technology, fundraising, and evaluation capabilities. Of the 1 million public charities in the U.S. that submit 990s to the IRS, about 75% have budgets of less than $500,000. (There are also 386,000 congregations and an unknown number of very tiny, local charities that don’t have to make information available publicly.) Only a small percentage of these nonprofits choose to focus their limited resources on the operational and program management criteria in the tool.

Second, not all nonprofits are in the business of “social change.” In the course, Ms. Riccio notes that the nonprofit sector is very diverse. However, I think the assessment tool and thrust of the course work best for nonprofits providing direct services (e.g. mental health, education, or international development). Historical societies, conservation groups, arts organizations, and others will fail many of the tool’s criteria for relevance and impact.

Lastly, nonprofits are receiving conflicting advice on the focus of their websites. Ms. Riccio tells participants to look past good stories and packaging to find answers to the assessment tool’s questions. Her advice, of course, isn’t new. The Better Business Bureau and others publish checklists of nonprofit information that should be publicly available. And, her questions about results and impact are similar to the new, controversial effort by Charity Navigator to rate nonprofits on the reporting of their results.

However, nonprofits hear a different story from experts who advise on fundraising communications, Millennial and Gen X giving, and engaging donors in social giving and crowdfunding models. Those advisors tell nonprofits to lead with compelling stories, share-able multimedia content, and pictures and quotes from donors’ peers. These might describe results, but not in the ways that match the expectations of the RISE Assessment Tool and its peers.

With all respect for Ms. Riccio’s hopes for success with the course and tool, my bet is still on the nonprofit websites filled with compelling, share-able multimedia content. Here’s why…

Hearts Still Win Over Heads

Ms. Riccio joins a chorus of philanthropic advisors, authors, and consultants who earn money trying to convince donors to stop, think, research, and create criteria before they give. As an example, most issues of the Chronicle of Philanthropy have a new opinion piece telling donors and foundation what they should do. All their work isn’t changing mainstream donor behavior, at least yet.

Hope Consulting’s Money for Good reports, the 2013 Millennial Impact Report, the annual Burk Donor Surveys, and other sources report that donors say they want to see tangible results and good performance in nonprofits. This hope for giving with purpose reverberates through the philanthropy media and is amplified as a real trend. But, we donors are only human. Our behavior frequently doesn’t match our intentions and we’re susceptible to all types of cognitive and emotional biases.

We have a variety of motivations for making charitable gifts, and the emotional, social, and spiritual reasons win over the intellectual ones. One of the classic books on donor motivation, The Seven Faces of Philanthropy, showed that only 15% of donors selected nonprofits based on considerable research and evaluation. The more recent Money for Good research showed that only 16% of donors were driven to primarily support high impact nonprofits.

The Money for Good research also shows that donors don’t spend much time researching nonprofits before they give. Only 35% of the 5,000 donors researched reported doing any research. And, when donors did research, it was to validate their donation, not to find the “best” nonprofit. They were looking to see if the nonprofit seemed reputable, had low overhead, and did good work (not necessarily defined as theories of change, performance measures, business plans, etc.).

Do I Now Know How to Invest in High-Performing Nonprofits?

The Tool didn’t add to my knowledge or skills. But as a long-time philanthropoid, I’m not the target audience for the Giving With Purpose course and RISE Assessment Tool.

In my previous post, I identified some potential audiences for the course – college classes, giving circles, professional advisors, and nonprofit staff and board members. Those audiences may be predisposed to spending more time exploring their giving preferences and evaluating nonprofits. The RISE Assessment Tool could be helpful if they’re realistic about the capabilities most nonprofits have (or lack) and what information is easily publicly available (or not). If the recent research on Next Gen Donors is to be believed, Gen X and Y donors may be predisposed to ask nonprofits harder questions. The Tool’s questions wouldn’t be a bad start, though the five Charting Impact questions might be a simpler start.

Despite my critiques and challenges over these two posts, I very much hope the Learning By Giving Foundation sees the summer 2013 version of the course as a good beta test. Hopefully the foundation will take the course’s advice and evaluate the participants’ behaviors and knowledge over time, use the participants’ feedback to update the content and process, and offer future, improved versions.

Should you take the course? If you’re at the point in your life that you have more time to consistently think about and act on your generosity, the course could be a helpful launchpad for that process. If a MOOC isn’t your style, ask Nathaniel James or me about the other strategic philanthropy and philanthropic planning tools on our bookshelves and browser bookmarks.

If you took the Giving With Purpose course too, I’d love to hear your experience, especially if you disagree with my take on the course.

Giving With Purpose: Will It Stick? (part 1)

Written for Philanthrogeek.com and cross-posted at http://www.philanthrogeek.com/creative-fundraising/giving-purpose-will-stick/

learnbygivingfoundationThis summer, the Learning By Giving Foundation launched its Massive Online Open Course (MOOC) on philanthropy, Giving With Purpose. News reports played up the fact that Doris and Warren Buffett were backing the course and that some nonprofits would receive “Buffett money” because of the course. That financial carrot likely drove the initial registration to upwards of 10,000 people.

I have to give kudos to the Learning By Giving Foundation and the course presenter, Rebecca Riccio. I’m thankful for their commitment to providing free philanthropy curricula, to openly experimenting with the still-evolving MOOC format for learning, and to being willing to learn from the feedback provided by thousands of course participants.

The course encourages people to “give with purpose” – described in two goals: a) satisfy their personal motivations for giving, and b) invest in high-performing organizations. In this post, I’ll cover my thoughts about the course as a whole and its ability to help participants understand their personal motivations for giving. I’ll write about the “invest in high-performing organizations” in the next post.

The Experience

The six-week course combines about an hour of video content with about an hour of  homework each week. There are a few short quizzes, but no final test and no grades assigned. Participants optionally choose to spend more time on the “Giver” track. Givers complete an initial online profile of a nonprofit to nominate it for a grant and assess six or eight other nonprofit profiles based on what they learn through the course. This summer, at least 1,300 participants also posted thoughts and commented on others’ posts on a Google+ Community.

Ms. Riccio delivers all of the educational content in short video segments. She also interviews donors ranging from Warren and Doris Buffett to the founders of Ben & Jerry’s (previews are available on YouTube.)

Ms. Riccio is often an engaging instructor and the course mercifully lacks endless slide decks. That said, if a student isn’t attracted to Ms. Riccio’s teaching style, he or she is out of luck. Some points are reinforced by visuals. However, new ideas often go by quickly or in quick lists of options that should be reinforced by written materials or downloadable slides. And, there isn’t always an easy connection between the videos and other online content. I don’t know if this disconnect is due to the Foundation’s first experimentation with online learning or to the limitation of the platform (Google’sCourse Builder). I do know there are more sophisticated online learning platforms available (the instructional firm In The Telling has one example).

At the end of the course, I was left with four questions.

1. Who is the target audience?

The course’s web site says it is “for students who are passionate about or interested in philanthropy.” It doesn’t define if it means the Learning By Giving Foundation’s traditional audience of college students or a broader audience. Judging by profile pictures in the Google+ community, most users this summer were adults.

The content is too basic for practiced philanthropists, philanthropic advisors, and foundation staff. But, I think these audiences would find the course useful:

  • College classes – while the content seems designed to stand on its own, people unfamiliar with the nonprofit sector or new to giving would benefit from a teacher or tutor providing context and reinforcing some points.
  • Giving circles – the content could be useful fodder for discussion in a giving circle and/or for new circle members who aren’t familiar with the basics of the nonprofit sector and options for giving. It could serve the same function for corporate giving offices to educate employees and service clubs to educate members.
  • Professional advisors – accountants, financial planners, and lawyers who don’t have charitable giving as part of their regular practice could use the course as a quick grounding. That said, see the caveat in the next question.
  • Staff, volunteers, and board members of nonprofits – the majority of the participants this summer seemed to already be connected to one or more nonprofits (likely because of the incentive of grants at the end of the course). Many said the course provided useful background on the sector and how to look at their favorite nonprofit(s) through a new lens. A nonprofit CEO could use the content to help staff see the nonprofit sector through the eyes of donors.

2. Is it too much of not enough?

The instructor, Rebecca Riccio, does a good job of synthesizing dozens of ideas from the literature on strategic giving and on nonprofit assessment. And, she frequently counsels participants to be fair and realistic when looking at issues such as evaluation and nonprofit overhead.

That said, participants may end up with too much of not enough information. As an example, she spends less than four minutes total introducing three tools: theories of change, logic models, and performance measurement practices. Participants are encouraged to look for these tools as signs of an effective nonprofit, but aren’t shown examples or provided context to judge quality if they do see them. Even seasoned foundation staffers have trouble assessing these tools, and too few nonprofits have good ones.

This felt like the equivalent of telling average consumers to buy a car based on the engine components. Sure, we can memorize a couple basic facts and ask the auto dealer to pop open the hood so we look like we’re being smart buyers. But it doesn’t mean we really know what we’re looking at.

3. Do I better understand my personal motivations for giving?

Each week included content designed to help participants reach both course goals (learn to satisfy your personal motivations for giving and learn to invest in high-performing organizations). Unfortunately, I don’t think the course succeeds on the first goal.

Ms Riccio poses good questions at the beginning of the course, for example: “Does a nonprofit have meaning for me?”, “Is investing in it a meaningful way for me to make a difference?” and “Does a contribution fit into my financial plan for giving?” But, the course doesn’t provide concrete tools to explore these and other values-driven and personal finance questions posed.

Truly understanding your personal motivations for giving takes time. In my experience in working with donors and donor families, they’re far more likely to take time for self-reflection and soul-searching in two circumstances. The first is when they’ve encountered a big change (e.g. selling a business, a parent dies, or inheriting wealth). The second is when they have an ally (e.g. an advisor, pastor, or life coach) and/or peer group regularly holding them accountable for the activity and documenting the results. Simply giving a scan of the ideas or presenting information freely online won’t change donor behavior.

4. Will it stick?

Thousands of people have now viewed content designed to help them be more purposeful givers. A subset of them attempted to practice what they saw on a few nonprofits’ web sites, 990s, and the often-incomplete nonprofit profiles submitted by participants. The course will accept another round of students at some point (TBD at the time of this post).

I’m not convinced that the content will stick for the majority. Like many great resources on strategic giving, the course provides a useful roadmap but following the map takes too much work for the donations under $100 that comprise most of charitable giving. In addition, even for wealthy donors, the motivation to give to high-performing nonprofits is easily undermined by other motivations and emotions (see Money for Good and other research on donor behavior).

Returning to our car-buying analogy, we may know all the right technical features we should value, but our purchases end up being driven more by emotion – the status the car conveys, the feel of the drive, the hot new color or style, loyalty to a brand, etc.

What if it does stick?

But, what if I’m wrong? What if the Giving With Purpose content does stick for hundreds or thousands of donors over time? Then, the nonprofit sector could be in trouble. The course raises expectations for the information donors should be able to easily learn about nonprofits. Most small- and mid-sized nonprofits won’t meet those expectations. That’s the subject of my next post.

If you took Giving With Purpose, please feel free to weigh in with your experience and reactions by commenting on this post! 

The Case of the Overhead Overload

From the files of the Generosity Gumshoe

Jim Barker / Foter.com / CC BY-NC-SA

She walked into my office last night, dripping in cold cash and hot tears. She was a rich socialite from one of those mini-mansions on the edge of town. Before I could lay out my philanthropic detective fees, she spilled her guts. Five shots of bourbon later (for me, she only had three), here’s what I knew.

Four months ago, she was a happy donor, comfortable in her giving. Like most donors, she responded to fundraising requests that tugged her heartstrings but assured her the organizations had integrity and could make smart use of her donations. She shied away from organizations that seemed wasteful, you know the ones. And yet, there was one Smarty-Pants Guy that kept sending her articles on “effective giving” and suddenly her confidence was shattered like cheap glass donor recognition plaques crashing to the floor. There’s always that one guy.

First, he forwarded a video by a slick salesman by the name of Dan Pallotta. Pallotta was provocative and charming, and he put the mental moves on her like nobody’s business. Before the end of his pitch, she was convinced that the way we think about charity is dead wrong. Suddenly she’s a canary for the praises of investing in nonprofit salaries, fundraising programs, and other overhead costs. She says it made sense – she doesn’t ask her favorite restaurant to only charge her for the actual ingredients in her cocktail and couscous salad. Turns out the poor dame didn’t research the controversy around Pallotta’s previous fundraising firm and the beef philanthropy heavyweights like Phil Buchanan and others have with him.

Then she received an appeal from a charity shouting, “Look at us – 97% of your donation goes directly to our programs! And, we’re rated 4 stars by Charity Navigator!” Sounded awfully tempting so she dropped the group a C-Note and checked out this Charity Navigator. Those jokers told her that charities shouldn’t spend more than 25% on overhead and gave her a bunch of Top 10 lists for good and bad behavior for fundraising and compensation. I didn’t even have to open a new case to tell her that nonprofits can cook overhead and fundraising ratios faster than my bookie Big Belly Bob. And even the good ones (nonprofits, not bookies) have suspect numbers because the IRS doesn’t provide clear guidance on how to allocate costs. Go figure the feds screw something up.

Smarty Pants Guy sent her more articles from the philanthropy rags like this and this. Real smart writers, see, but they go for nuance and the gray areas of the problem. Who has time for nuance these days?

Then she saw a CNN show Above the Law: America’s Worst Charities and now the canary’s singin’ the blues. High overhead costs, paid family members, expensive fundraising contracts, outright fraud…all kinds of flimflam artists running supposed charities and bilking old ladies for cash. I’d plug those palookas full of daylight myself, but I ain’t that kind of private dick.

I told her the CNN show doesn’t tell the whole story. They never do. The newshounds found 50 real bad apples in an orchard of more than a million nonprofits. The hype leads you to believe the 50 are the front for a whole mob of bad charities when Guidestar’s data shows only 6.8% of charities reported spending more than 50% on overhead. Not outstanding news, but not the majority.

After her third shot of the strong stuff and half a box of hankies, the dame asks me, “Mr. Generosity Gumshoe, what am I to do? Can you investigate all these nonprofits for me?”

Dollar signs danced in my eyes as I imagined having enough jack to pay off Big Belly Bob, ditch my rusted heap, and take this dame to Tahiti. Plenty of advisors to wealth donors make easy cash answering those questions. But Grandma Gumshoe raised me to be ethical and moral (“or else the cane, boy!”) and I couldn’t bring myself to charge the socialite for easy answers. So, I told her:

  1. Turn off the news and the emails from Mr. Smarty Pants. Instead, trust your instincts, find the things that make your heart sing, and enjoy being generous.
  2. If tax deduction’s your thing, check out Grantr.com for free and look for the green checkmark.
  3. If you want to learn more about an organization, the five questions at Charting Impact are a pretty damn good place to start. If you don’t understand or like the answers, it’s OK to walk away. There a million nonprofits in this naked country, that was just one of them.
  4. If you’re really stuck on overhead issues, the FAQ from this new Overhead Myth campaign is on the square, even if those hinky Charity Navigator folks like it too. Better yet, go visit the group in person. Nothin’ like laying eyes on their offices and staff to get wise to their work.
  5. If you still can’t decide, then get on the blower to your local community foundation and they’ll likely have a bead on the group. Or, I’ll do some snooping around free of charge.

It might have been my honesty. It might have been the booze. It might have been my rugged good looks. But the lipstick on my cheek and new appointment tomorrow night labeled “fundraising gala with socialite” tells me this is the start of somethin’ beautiful.

Hopefully she’ll pay for the drinks.

Raising the Philanthropy Question

Aside

Kudos to Jim Coutre from The Philanthropic Initiative for his recent article on the importance of financial advisers discussing charitable giving with their clients. He cites studies showing that wealthy clients expect the conversation (or will go elsewhere for it) and that the conversation will increase long-term client retention. Community foundations and other nonprofits that work with professional advisers will also gain insights.

Jim also posted the article with additional links in three blog posts in March of 2013.