Folly #38: Giving

It's that time of year.

There are lots of words to describe what most of us wait until the end of year to do. Give. Donate. Philanthropy. Grant. Contribute. Support. Procrastinate.

Speaking of which … Nearly a year ago, a paid subscriber and old friend (thank you Deb!) asked me a question through Substack message, one that I didn’t see until just recently. It feels especially timely now.

Philanthropy seems more complicated, less transparent, than need be. Is there a trustworthy rating source that small, individual donors can use to fully understand the detailed budgets of nonprofits?

Before I share some thoughts, two caveats please.

Heart, Mind and Numbers

First, I’ve met so many lovely, interested and interesting people over my decades as a fundraiser, and have often been surprised by how they give: from the heart. (Despite the analysis and fact finding that may go into every other aspect of their lives, few individuals give from the head.) I think we all want to, but then we run out of time. Or energy.

Second, numbers out of context may not be that helpful. Most nonprofits are highly accountable in their finances, and cautious in their spending. The vast majority of nonprofit staff are underpaid for their talents and the difficult tasks in their work.* (See below.) None of us will understand their budgets and program costs as well as they do.

OK, let’s do this.

Research on Issues and Places

Give Well is hard to beat. They offer simple, free information based on their extensive research and have impressive transparency. You’ve got to love a group of experts who include “Our mistakes” as a menu option! Their list of top charities is small – it focuses on those that save or improve lives the most, per dollar.

Several platforms help your donations go a long way globally by supporting small business owners and farmers.

• Kiva has an extraordinary track record in leveraging your money as microloans to individuals around the world who repay them – so you can re-lend to someone else.

• Heifer International goes deep – they strategically work in 19 countries to end poverty, and support regenerative farming in the U.S.

• Global Giving goes broad – they vet organizations in 175 countries.

For nonprofits near you, check out your local community foundation’s grantees. Their regional focus supports philanthropy from both ends – grantmaking to area nonprofits, and resources and information for individuals to give more strategically through a donor advised fund.

Or let’s hop on a call and explore other great resources together.

Rating Sites

Charity Navigator rates nonprofits of a certain size in several categories, many of which are budget-driven:

• Impact and results

• Accountability and finance – metrics on boards of directors, disclosures and policies, and financials

• Culture and community – constituent feedback and equity practices

• Leadership and adaptability

I have mixed feelings about Candid (formerly Guidestar). I love that they allow nonprofits to submit data for their silver/gold/platinum rankings. But it seems like much of their free info is what you’ll find on a nonprofit’s website, and their paid subscription is crazy expensive.

None the less, both offer a single platform where you can compare organizations.

Budgets

If you’re still interested in digging into numbers, ProPublica’s Nonprofit Explorer will let you type in a nonprofit’s name and see their latest annual tax form. (A lag of a year or two is normal.) A nonprofit’s 990 will show you some key numbers:

• Revenue and Expenses – Part 1

• Balance Sheet – Part 2

• Information about Officers, Directors, … Highly Paid Employees and Contractors – Part 7* (See above.)

However, that still doesn’t tell you much. After all, why shouldn’t someone responsible for solving really big problems be highly paid? Connie Kwan had some important things to say about nonprofit money psychology at the end of her interview with us.

Giving

I hope you’ll consider a gift to me in your own yearend giving: add a comment and share why you give and where you learn, or …

Nonprofits make our lives and world better. May your holidays do the same. See you in 2024.