America's Giving Challenge

Okay, this is pretty big news. Parade Magazine, in conjunction with the Case Foundation, has created a challenge to see just how much viral marketing and social networking can do for nonprofits, the America's Giving Challenge. The idea is that through the use of charity badges, the eight nonprofit champions who manage to attract the largest number of unique donors (as in not the same donor over and over and over again) will win $50,000 for their cause. Wow. All told the Challenge will donate $500,000. No wonder this is being mentioned in the news and in blogs as well!

NY Times
Washington Post
Chronicle of Philanthropy
Katya's Non-Profit Marketing Blog
Beth's Blog

As we recently saw through the Tactical Philanthropy One Post Challenge when over 600 comments were left on the winning post all from people voting for their favorite nonprofit, people can be very motivated when they know that their cause can benefit.

I should also mention that you can get involved either directly through the Challenge website, or through the Facebook Causes App and that GlobalGiving and Network for Good are the donation processing partners.

I am especially excited about this challenge because I am very curious to see the results, both in terms of the immediate results and the longer-term results. Challenges and prizes are very popular right now, but what happens when the fanfare has died and the prizes have all been awarded? I've spent the past more than a year researching online giving as a viable strategy for nonprofits and the interesting thing seems to be that e-philanthropy has taken off in many areas of the nonprofit sector, but far less so in the museum world. I wonder how this very public, very mainstream challenge may change that, if at all.

Philanthropy, Charity and Poverty--Where Are the Connections?

Trista Harris from New Voices of Philanthropy asks whether or not philanthropy actually can cause (or at least promote) poverty? She asks this question in response to a story (originally reported in the New York Times) about how foreign aid (pressed upon the nation by the US and other countries as an alternative to subsidies) to Malawi kept its people in poverty and starving, whereas governmental fertilizer subsidies enabled the country to grow enough food to feed its people and create a surplus! So: as Trista asks, "Does philanthropy increase poverty by creating a disincentive for economic development?"

One of the comments in response to this post points out the subtle nuance between "charity" and "philanthropy": charity acts as a band-aid, providing immediate relief through the distribution of commodities such as food or a hand-out, whereas philanthropy focuses on systemic change.

Do you agree? If so, does charity contribute to the problem of poverty rather than mitigate it? What if we look at issues other than starving people in a far-off country? What if, instead, we look at the homeless people right in our own communities? In that case, charity would be when we give some spare change when approached on the street. Are we helping or creating a disincentive for change? Is this too simple a way to view the situation? How do we translate this duality of charity and philanthropy into the museum world--would charity be when a museum seeks immediate funds for a particular need rather than long-term planning? Does this model even work for nonprofits not engaged in human services? I'd love to hear other people's thoughts on the matter.

Two Trends in Nonprofit Revenue Generation

Philanthropic Vacations
I suppose it's really just a variant on luxury eco-tourism, but now there are upscale vacation packages that allow tourists to do charity work while still enjoying first-rate accommodations and fine dining. This is not exactly new, however the trend does seem to be growing--requests for philanthropic trips have grown 15% in the past two years, no doubt fueled by the philanthropic efforts of celebrities such as Angelina Jolie, Brad Pitt and Bono. There appears to be a long-term benefit for the nonprofits that socially-aware tourists visit as well: once people have had a chance to see living conditions up-close and personal, they tend to become ardent supporters of the cause.

Downloadable Cellphone Art
Ah, I was aware of museumonthego.com, specializing in downloadable cellphone wallpaper made from museum images primarily from European museum collections, but now it looks like the Museum of Fine Arts in Boston has created their own "On-the-Go" downloadable service! [source, source]This is one of the relatively new forms of revenue generation that I identified for my talk at the Mountain-Plains Museums Association and mention in my museum revenue generation survey (pdf) and one that I suspected would become increasingly popular. After all, once you have digitized your images, selling them online is not so difficult.

Incidentally, the NY Times article referenced by Museum Lab is absolutely worth reading because it delves into some of the issues regarding high res digital reproductions and has links to some virtual museums.

Thoughts on Radicalizing Philanthropy

In the Tactical Philanthropy One Post Challenge, Trista Harris of New Voices in Philanthropy won the runner-up prize for having such a radical, innovative and thought-provoking post in which she called for philanthropy to leave the "ivory tower" and essentially send its program officers out into the communities that foundations actually serve.

Lucy Bernholz of Philanthropy 2173 proposes something equally radical and astute: she says that if she were "philanthropy queen" she would

find a way to take advantage of... applications of methodology and creativity from smart people... thinkers (students and faculty) from the social and natural sciences, arts, design, humanities, business, policy, and religion to co-craft possible solutions to poverty, hunger, sickness, cultural isolation, etc... Then I'd develop critiques and review processes that were led by those living the conditions so that only applicable, reality-based strategies would survive the process... The whole process would be public so that those we hadn't yet found who had something to contribute could find it, use it, improve it--and it would feed a marketplace of ideas for the public good.

Lucy calls this "open source charrette philanthropy." Personally, I love this idea. It starts off sort of as I imagine think-tanks (ideally) function, but then the incorporation of transparency, public testing and the open-source aspect of it make it truly novel and worth a real-world look.

Lucy also makes a really strong, valid argument against using overhead ratios as a metric for success for nonprofits:

in what other are of your life do you deliberately seek out the product, service, location, or experience that is being made available in the cheapest possible fashion? We don't pick restaurants because they forgo cleanliness...we don't choose schools for our kids because the administration is keeping costs down and not supporting teachers...

She goes on to argue that the main reason why that is the prevalent metric is that it is easy to calculate and compare. I'd like to take a moment here to congratulate Holden and co. at GiveWell for bucking this system and radicalizing philanthropy by establishing new methods for determining the success of nonprofits. Holden was the guest speaker/respondent at the Chronicle of Philanthropy online discussion yesterday entitled, "Changing the Culture of Philanthropy: a Young Donor's Views."

"Giving is the New Taking"

Trendwatching.com has just released its 8 Trends to Capitalize on in 2008. In Trend No. 1, "Status Spheres," Trendwatching declares that "giving is the new taking" and challenges us to find "one high-profile billionaire who's not deeply into 'giving' right now." This assessment is largely based on the recent Business Week report on the 50 most generous philanthropists.

This is great news, but what happens when the giving trend goes the way of last season's color? How do we effectively transform giving from being the latest trend to being a sustainable and inherent part of life and business?

Perhaps the global investment bank, Goldman Sachs, has already begun this process. They just announced a new donor-driven philanthropy fund, GS Gives, that will initially focus on "the firm's roughly 350 partners who will be strongly encouraged to donate a fixed amount of their compensation."

The article explains that while other investment banking firms also offer donor-advised funds and encourage philanthropy, the funds are usually geared towards clients and not employees. But, as Goldman Sachs Chairman and CEO Lloyd C. Blankfein has stated, 'We know we make a lot of money, and we know that we live in this world and we have a responsibility to give something back.'

According to an article in the Wall Street Journal, large companies like Goldman Sachs aren't the only ones making a corporate investment in and commitment to philanthropy. Small businesses such as the Hook and Ladder Brewing Company and ColorMe Company donate a percentage of each sale to charity, while companies such as Sweetriot Inc. donate in-kind services.

Even small, independent makers of handcrafted items are getting in on the act through grassroots groups such as Etsy For Charity.

Hopefully all of this means that giving will stay as ubiquitous as the little black dress.

Breaking News: GlobalGiving Offers a Guarantee on Your Philanthropic Investment!

Wow. The idea is radical to me, and possibly to the rest of the world as well, but CEO of GlobalGiving, Dennis Whittle, announced GlobalGiving Guaranteed late last week.
Starting today, if a donor is not happy for any reason with his or her experience on

GlobalGiving, he or she can get a refund. The refund comes in the form of a voucher the donor can use to give to any other project he or she wishes. (If the IRS allowed it, we would even refund donor's money in cash.) The guarantee will cover up to $10,000 per donor, per year, at the beginning, but we may increase this ceiling if it makes sense in the future.

Whittle points out that when you are unhappy with a purchase at a store, you can return your purchase for a refund or store credit, so why not with your charitable contributions as well? The emphasis of his concern seems to rest with ensuring that donors "be treated at least as well as consumers," but my question is: what about the nonprofits? Consumers can be fickle or suffer from "consumer's guilt" and "buyer's remorse," what if the same thing happens with donors? "Well, last week I wanted nothing more than to help starving kids around the world, but today I realize that instead I should spend my money on food for my own kids, or for starving people locally." On a practical level, doesn't this have the potential to wreak havoc on nonprofit accounting measures?

I like the idea of providing a guarantee for donors that the programs they choose to support will be the most effective and impactful organizations of their type, but, with the sometimes capricious nature of human actions, I wonder if this is the best way to do it.

Beyond Donor-Nonprofit Matching and on to Nonprofit Evaluation

GiveWell is now up and running--or at least in preview mode--the latest, and certainly one of the most complex, in charity evaluation websites. Whereas Charity Navigator evaluates nonprofits strictly according to the financial information reported in IRS 990 forms, which the folks at GiveWell find to be misleading and therefore an incomplete measure of a nonprofit's effectiveness, GiveWell instead acts as a nonprofit granting agency and uses the application process to collect detailed information about organizations.

We review program activities, technical reports, and most importantly, results. How many lives has a charity changed, how has it changed them, and what's the evidence that they can do it again?

The result is that GiveWell certainly is not the most comprehensive of sites in terms of numbers or types of nonprofits (only four agencies are recommended under the Employment Assistance section), however, each of the few nonprofits listed have been hand-vetted with detailed information about why they are considered to be the most effective nonprofits of their kind.

I like this approach because it ensures that nonprofits are treated as individual organizations, requiring a complete analysis, rather than measuring them against one universal metric. I agree with the folks at GiveWell that it is not necessarily desirable to have the vast majority of donations go towards programming--without a solid infrastructure, any nonprofit will fail.

So far GiveWell only has reviews and recommendations compiled for charities that raise incomes (with a focus on NYC), however, upcoming will also be reviews and subsequent recommendations for charities that save lives, improve education, fight global poverty and provide child care.

But GiveWell isn't the only site of its kind, using a different system of metrics than just the 990 to evaluate charities. The Better Business Bureau Wise Giving Alliance reports on how well charities conform to the BBB charity standards.

The JustGive Guide "contains over 1,000 charities in 19 categories who meet certain criteria." These criteria include having "received funding from the top 100 foundations," "have reasonable fundraising and administrative costs" and are "recommended by experts."

The American Institute of Philanthropy also grades charities according to the following criteria: High grades go to charities that put

75% or more towards program cost while generally spending $25 or less to raise $100. These groups also receive an 'open book' credit from AIP for willingly sending the financial documents we request.

[Note: the AIP does not appear to list or grade museums.]

Newdea is coming at the issue of nonprofit evaluation from a slightly different angle, focusing on the assumption that the common bond between nonprofits and their funders is the notion of impact.

Through Newdea, the entire philanthropy community can connect, demonstrate, validate and measure the impact of their efforts. For the first time, everyone involved can actively participate in ensuring the same goals. Donors aren’t just writing checks anymore – they have a genuine interest in their investment and in using their influence positively. Charitable organizations no longer have to waste time and resources on operational redundancies, inadequacies and external pressures. Program staff can spend more time on the most impactful work and less time on administrative distractions. And those in need receive more of the help they need and can lead improved lives.

It's a little difficult for me to parse how exactly Newdea goes about doing this, but from what I can see, unlike the other sites where outside forces are evaluating nonprofits, this platform allows nonprofits to submit their own evidence of impact and have direct control over the information being put forth about them.

What is particularly interesting to me, though, about all of these sites is the idea that simply matching donors with potential recipient charities is not enough, that it is crucial to ensure that donations will be put to the best possible use in order to create the greatest good. In theory, I like this idea quite a bit, but I suspect that in practice, there will still be some kinks to be worked out in distilling the perfect way to truly gauge the effectiveness and worthiness of a nonprofit.

My guess is that evaluation sites such as these might not have much use or impact for those donors who already know where they want to give their money--but are using a third-party site simply for the ease of online giving--with the utility in these sites being primarily for those donors who are interested in particular issues but are still looking for a specific agency to fund.

But I could be wrong. Long-time supporters of particular organizations may use at least the larger of these evaluation databases to see how their favorite charities stack up--and from there, they may decide to search for new ones with similar missions but higher ratings.

In that case, I hope that donors will recognize that there is no standardization or one single, proven metric for charity evaluation and that they bear that in mind when they look up their favorite organizations. If you have had a good relationship with a particular organization and are satisfied with what it is achieving, does it matter how one website rates it?

"Giver's Greed:" The Result of a Biological Imperative?

A recent article at the Huffington Post entitled "Giver's Greed" has me feeling kind of down. The gist of the article is that often donors give in order to make themselves feel better, hence their emotionally-based rather than logically-based donations don't necessarily end up actually benefiting anyone, or come with stipulations and restrictions that can hinder the overall effectiveness of what the nonprofit is trying to accomplish.

The author gives the examples of people wanting to give food donations to victims of the recent Southern California fires--despite the fact that what those affected need is money to rebuild rather than food--and of teddy bears sent to Indonesia after the 2004 tsunami where the climate resulted in the plush toys becoming disease-ridden and had to be destroyed.

But museums face these issues as well. Most museums are well aware of how much easier it is to fundraise for a new exhibit or a new wing rather than for such mundane expenditures as overhead, collections care and daily maintenance. Similarly, most grants are for specific programs rather than for upkeep and overhead--to the point that sometimes the potential for funding can drive programs, rather than the other way around.

This is only part of what I find disheartening. The other part is that this article points out the down-side to what earlier in the year I had thought was something great! This spring, studies were released that showed that giving/altruism hits the brain in the same way that sex, food and drugs do, namely causing pleasure.

Despite some bloggers opinions that giving should be about the people in need rather than about the donors, I personally felt heartened by the studies, even chiming in during a session on Fundraising 101 at the Mountain-Plains Museums Association conference this past September in Fargo, ND to mention that one more reason why museum development officers shouldn't be afraid of "The Ask" was that giving literally gives people physical pleasure, so by asking them for money, we are essentially offering them the opportunity to experience pleasure.

Furthermore, according to an article in the Christian Science Monitor, "giving leads to a healthier, happier life."

To me, all this sounded like a win-win situation. Fundraisers, who may sometimes be shy or apologetic about The Ask, now could feel even more secure about doing their jobs, while the evidence pointed to donors benefiting in tangible as well as intangible ways.

But this article has brought me back down to earth and reminded me that because giving is about meeting some sort of basic, primitive, pleasurable human need, it is also subject to human selfishness in some of its less productive forms. Still, now I wonder how many causes would be supported at all if there wasn't any neurological benefit associated with giving?