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.