A Donor's Confession

Alright, I admit it. My wife and I go with our heart, not our head, when deciding which nonprofits to support with our donations.

There, I said it.

I know that, working here are the Charities Review Council, I should say that we rigorously look at each organization and from this research decide which ones to support. But the reality is different.

Like a couple of my colleagues, Amy and Jenna, wrote in their blogs, my wife and I start with a budget and figure out how much we can afford to give. But after this very rational process, our hearts lead the rest of the way. Frankly, we support the nonprofits we have a personal connection with. That personal connection started because the nonprofit's work resonated with us and, based on our personal experience with the nonprofit, we believed it was making a difference on the issues we care about.

Now, coincidentally, most of the nonprofits we support have gone through a review with the Charities Review Council, but not all. I think this fits, though, with how we as an organization look at the review process. While we offer information to donors about reviewed nonprofits, we also acknowledge that meeting all standards isn't the same as an endorsement. There are a number of great organizations doing fantastic work that may never choose to participate in a review or don't meet all standards.

What is important is that donors strive to make informed giving decisions. This can include (and I would argue probably should include) "hands-on" research where a donor actually sees the difference being made by a nonprofit because they spent time actually developing a relationship with the organization. What's interesting to me is that this concept is actually at the root of venture philanthropy organizations like Social Venture Partners (here's the link to Social Venture Partners Minnesota).

Maybe I'm just rationalizing the fact that I'm a softy when it comes to making giving decisions, but I do believe that informed donors should consider their relationship to a nonprofit and need to take the long-view in supporting organizations that connect to their values.

Do I need another pink awareness coffee cup?

I use a pink breast cancer awareness travel coffee cup daily. When I bought it years ago, it indicated that a portion of my purchase will benefit breast cancer awareness research. Supporting breast cancer research is important to me since two of my close friends are breast cancer survivors.

But that is not why I bought the coffee cup. I simply needed a coffee mug and this one advertised that it is leak-free (which is important to a self-admitted klutz who has spilled coffee numerous times on the way to work).

Hundreds of companies ramp up their pink ribbon products such as pink coffee cups during National Breast Cancer Awareness Month encouraging their customers to shop for the cause. Each advertised that a portion of my purchase will be donated to breast cancer research. This is commonly known as “cause-related marketing."

Common cause-related marketing activities include agreements by the company to donate a percentage of the purchase price for a product to charity, advertising and promotion of a common message, product licensing, endorsement, and product certification by a charity.

There is no question that these marketing campaigns have helped increased public awareness and raise millions of dollars. It has also provided nonprofits, corporations, consumers and employees with a sense of purpose that their decisions can make a difference.

I bought my coffee mug because of its leak-proof functionality. The fact that portion of my purchase will support breast cancer research was a nice bonus. Since it clearly disclosed how my purchase will support an organization I am familiar with and trust, I plunked down my cash and bought the coffee mug.

I saw a similar coffee mug at my favorite coffee shop this morning. But, I don’t need another coffee mug. Instead of buying another mug which I don’t need to support the cause, I am going to give to the charity directly instead.

How do you shop to support a cause? Do you support causes by buying products that support a cause or do you buy the product only if you need the item?

Giving & Family

Single and Giving
I work in the nonprofit sector so it could be a given that I like to give to charity. And, when I was single, like many, I tended to give to those charities with which I had a relationship. If I branched out, it was mostly because my brother asked any presents to be charitable donations. (A reminder, I work at the Charities Review Council, picking a charity with my informed giving lens is a given.)

Giving as a Couple
When I got married, giving as a couple seemed odd. So in our newly married way, my husband and I had a very brief conversation about how we would approach charitable giving together. He had a few favorite charities, I had a few. Yet, we liked the idea of picking an additional charity whose work we both valued. Our gifts to charity come from both of us but they don’t necessarily reflect our individual interests; they are mishmash of both of our interests.

Determining how much we give wasn’t driven by a specific/intentional budget like Helen or Jenna. Clearly, gift amounts are unique to each family. I wouldn’t want anyone to presume I’m prescribing a process. My husband and I are pretty independent individuals. We agreed that since each of us is aware of family financials, we could each individually decide how much to give to our chosen charities. (Like any of our expenditures, if we go above a certain amount, we simply let the other one know what we’re up to.) We appreciate the spontaneity that gives us.

Giving as a Family
From my kid’s first days, I pondered how to teach them about charitable giving. As they get older, there are a lot of resources out there to help us along the way including: Share Save Spend, Doing Good Together and our own Great Givers that is designed for teachers but gives great ideas for parents too.

For now, I just keep giving in the conversation and mention that it’s important to share our money and our time. We volunteer as a family in park and river clean-ups. And, a few times a year, the kids and I have a conversation about where they would like to give some of their money. They decide what they want to support.

As a family, we’re hoping our giving efforts grow, that, simply, we’re able to share more. Even the 6-year-old agrees.
A few months ago, he told me, "I wish I had some sense, you know, quarters, and stuff."

"Why?" I asked, ready for him to tell me about the new toy he wanted.

"Well, I wish I had some cents, then we could buy food for the people that are hungry," he responded.

We’ll keep working on that.

The Bremer Give-to-the-Kids Challenge – A Smart Giving Opportunity!

by guest blogger, Dana Nelson, Executive Director of GiveMN.org

Want to double your dollars and do more good? Now is your chance! Through Tuesday, October 5 donations on GiveMN to 50 youth-serving organizations in Greater MN will be doubled thanks to the Otto Bremer Foundation.

The Bremer Give-to-the-Kids Challenge is a call to Minnesotans to support nonprofits serving our youth in Greater Minnesota. The Otto Bremer Foundation is providing up to $300,000 in matching funds to double donations and incent giving to the 50 selected organizations. Each organization will receive a one-to-one match for the first $6,000 it generates through online donations made on GiveMN.org during the campaign, September 28 through October 5, 2010. There are only two more days to DOUBLE your dollars!

Why donate to one of these organizations? Think about that one adult who really listened to you when you were growing up. Maybe it was a teacher, a neighbor or a coach. For young people who are homeless or facing domestic violence, having someone to talk to can literally be life saving. So whether you give to Anna Marie’s Alliance in St. Cloud who provides a safe space for women in children fleeing violence or to the Pillager Family Council who invests in programs that make a difference in the lives of Pillager youth, know that you are helping to make that positive interaction take place.

Why else should you give to one of these organizations? For most of these organizations, this is their first online giving campaign. They are small organizations stretching to do something new. Moving from “the way things have always been done” to “the way we need to do things to be relevant in the future.” They are working with their donors who are unsure about making a donation on a computer. And they are marketing to new donors who love the ease and convenience of giving online. They are changing donor behavior one click at a time. And the dollars are trickling in.

So whether you have a cabin in the Brainerd Lakes area, grew up in Alexandria or went to summer camp in International Falls, please invest in young people in a community that you care about. Click. Contribute. Change Your World. Take the Challenge today and forward to your friends! Post a comment on Facebook or follow #GiveMN on Twitter, please help spread the word about these great organizations.

And remember to look for the Charities Review Council's “Meets Standards” seal on an organization’s GiveMN page!

GiveMN is a collaborative venture to transform philanthropy in Minnesota by growing overall giving and moving more of it online. GiveMN is an independent 501(c) (3) supporting organization of the Minnesota Community Foundation. Many partners shaped GiveMN to build upon Minnesota’s strong tradition of philanthropy, including: ADC, Blandin Foundation, Briggs & Morgan, the Bush Foundation, Central Minnesota Community Foundation, Ecolab Foundation, F.R. Bigelow Foundation, General Mills, Inc., Greater Twin Cities United Way, HealthPartners, Initiative Foundation, The Minneapolis Foundation, Northland Foundation, Northwest Minnesota Foundation, The Saint Paul Foundation, Southern Initiative Foundation, Southwest Initiative Foundation, Target, West Central Initiative Foundation and Women’s Foundation of Minnesota. For more information, visit http://www.givemn.org/.

Gen Y & Charitable Giving

by guest blogger, Tanya Dobbs, Charities Review Council marketing intern

The next wave of younger generations is quickly becoming a highly prioritized target for organizations who seek to encourage on-going, active participation within the nonprofit sector. While the Charities Review Council works to encourage informed giving for all people of all ages, Generation Y remains to be one of the most elusive generations when it comes to philanthropy. Individualistic, realistic and technologically advanced, Generation Y has the potential to become the next generation of charitable donors. If you can manage to catch their attention.

As a twenty-two year old member of Generation Y, it is easy for me to understand the challenges nonprofits have when trying to attract younger donors. Gen Y, otherwise affectionately deemed “Generation Me,” is often stereotypically labeled spoiled, self-centered and materialistic. I have to say it is hard not to be slightly offended by these various adjectives, especially when I recognize the immeasurable potential younger generations have when it comes to nonprofits and charitable giving. Generation Y has grown in an age of extreme innovation and technological advancements in a way that no other generation before them has and it greatly affects the way the average 18-29 year old communicates. With the vast array of technology at the touch of any Gen-Yer’s fingertips, nonprofits are now setting the standard with how they must learn to communicate with upcoming generations.

A 2010 study by Convio Research shows that 56% Generation Y does give to charities. When given the opportunity, I have seen first-hand the willingness of people my age to donate. In the wake of Haiti, I was astonished at the number of my friends and classmates who jumped on the mobile giving bandwagon in order to raise money for disaster relief. Why? Possibly because commercials from text-to-give challenges were played endlessly on channels like MTV, challenging young people to consider giving, however small the amount. Social media sites such as Facebook  also have managed to tap into the elusive Generation Y. The Convio study confirms that websites, social networking and mobile giving are the top preferred channels of solicitation from charities. Opportunities for donations from Generation Y also seem to be most effective when presented with a specific problem that needs urgent help, such as disaster relief or cancer foundations; it also stresses the importance of nonprofits to master multi-channel marketing strategies.

In my opinion, I believe the encouraged individualism of Generation Y has created a desire for younger people to become involved in something bigger than themselves. When presented with a problem, I have high faith that Generation Y can be easily encouraged by the importance of donating. If nonprofits can learn to communicate effectively on Gen-Y’s own terms through their preferred media channels, you may be surprised at how many of us young people can get excited about donating!

About Tanya Dobbs
Tanya is currently the marketing intern at the Charities Review Council. She is a senior at Metropolitan State University pursuing a B.A. in professional writing and looking forward to her anticipated graduation this fall.

Being Intentional on a Small Budget

Like Helen mentioned in her blog post last week, I too, am a planner and like to have a budget. But as you can imagine, as a recent college graduate just finding her sea legs in the "real world", I'm not exactly sitting on a mountain of money. So in order for me to ensure my dollars have an impact, I've chosen to invest them in just two organizations that I feel passionately about and am intimately involved with as a volunteer.

Now, if I had a budget comparable to that of Bill Gates or Warren Buffett, my strategy might be a little different, but the reality is, I'm just learning what it is like to have disposable income. So when I decided to create my modest charitable budget, I first evaluated my essential expense, and then picked the percentage of my income that I wanted--and was able--to invest back into my community.

With a rough dollar amount in mind, I chose two organizations whose missions closely matched my values and whose existences, I feel, play an integral part in my community. I am an active volunteer with both of these nonprofits as well, which gives me insight and confidence that my gift will be used responsibly. Additionally, being highly engaged makes my financial contribution that much more meaningful to me because I am personally invested in the life of these organizations.

I still budget for those sporadic requests from friends and family, but in light of my intentional focus, I do a little research before I turn over my contribution. I determine my gift based on how closely the mission of the organization matches the values I've elected to support, and I use the Charities Review Council's charity search to be assured that the organization is meeting basic sector standards of accountability.

While it wasn't long ago that every extra dollar earned was used to pay tuition, I have finally arrived at a point where I can be intentional and proactive with my giving. I'm still not a billionaire able to give away 50% of my worth to various charitable causes, but I've chosen to add charitable contributions to my budget and to be prudent with how those precious dollars are spent.

How have you chosen to be intentional with your giving on a small budget?

Check out Amy's blog post in two weeks about how to be strategic with your giving when you also need to consider the thoughts and opinions of your family.

Planning and budgeting for charitable giving

I admit it. I am a planner. I plan everything from what I am going to focus on at work each day to what my family will have for dinner each week. A plan helps me focus. So naturally, I also like to create a plan and budget for my charitable giving.

By budgeting and planning ahead, I know how much I can afford to give and I am more proactive rather than reactive in my giving. Planning a budget also helps me say “No” to charities that I don’t know. Realistically, no one can support everything, and I am less likely to respond to pressure and on-the-spot requests if my giving plan concentrates only on causes that I have already identified. I also like to set aside some funds for unexpected requests such as disaster relief.

Planning doesn’t come naturally to all, but here are few tips from the Charities Review Council to get started.

• Review your giving priorities. What top issues match your values and interest? This can become your unique personal giving statement, encompassing your personal experience, the values and issues you hold dear.

• How much of your income and assets you want to use for “social investment,” or charitable giving? Divide that amount between your priority areas in a sensible manner that reflects the weight of each priority area … but it’s also wise to allocate some for the “unexpected.” Recent events have reminded us that unexpected disasters do happen, and they move us to want to help the victims of those disasters.

• Now find charities that effectively work toward the priority areas you’ve identified. You can use the Charities Review Council’s Charity Search to streamline your search using keywords.

• Check to see if the Council has reviewed the organizations you’ve selected. Visit the Council’s website to view our listing of reviewed organizations. Review results offer helpful information such information about the organization’s mission and programs.

Does budgeting work for you? Share your thoughts with us.

Formula for success: Digital innovation + spirit of a shared mission + one big pep rally

by guest blogger, Jeff Achen of GiveMN.org

More dismal economic news follows a recent Washington Post article about the drop in individual giving in the nonprofit world. The Washington Post reports that “people are giving less frequently and in smaller amounts of money to charities than in the past, according to a survey of executives at 6,800 nonprofits nationally by GuideStar USA, an organization that tracks finances of nonprofit groups.”

Nevertheless, we’re excited and optimistic here at GiveMN.org. Our mission is to provide Minnesotans with one-stop charitable giving through an “online giving marketplace,” provide local giving content, with a national reach (did you know you can donate to any registered nonprofit across the US using GiveMN? Simply click the dropdown box on the search page and select “all states”), and use cutting-edge technology to provide personalized experiences where donors and nonprofits can interact.

We know that when you’re giving to a cause, you want a more intimate connection to the impact your dollars are having. You can learn more about those you're considering supporting by clicking to see the Charities Review Council's review reports right from the profiles of nonprofits who have participated in the Accountability Wizard review process.

All of this is in addition to the cost savings we know online giving is providing to nonprofits AND the environmental benefits of moving from paper to digital fundraising efforts. We know that traditional fundraising is 3x times more expensive than online fundraising on GiveMN. And now, we’ve secured a competitive, low transaction fee that will take effect after our funding partners’ subsidy of transaction fees ends Sept. 30, 2010. Thanks to a partnership between US Bank, based here in Minnesota, and GiveMN’s technology partners Razoo.com, we’re able to cut the costs of processing online donations down to 2.9 percent. Sure, it’s not zero. And though our funders have been quietly covering all fees to the tune of more than $855,000, it’s been nice to know 100 percent of our donations have been going straight to nonprofits. The good news is that at 2.9 percent GiveMN is offering the most bang for the buck, especially when you look at the innovative tools on our site. (Thank you Razoo!) To get this low rate, US Bank is waiving select fees associated with processing credit cards. This low rate is better than most other online giving sites, many of which charge nonprofit organizations fees on average of 5 to 7 percent of dollars donated.

All of this is to say that we’re working hard to ensure more giving takes place and nonprofits continue to make a difference in our state.

As I’m writing this, we’re gearing up for Give to the Max Day 2010, our second annual one day giving challenge on Nov. 16. We’ve been referring to this event informally as a sort of giving “pep rally.” We have high hopes, and I don’t think they’re unrealistic, that Give to the Max Day will contradict the national statistics that say giving is in decline. Of course we can’t do that without your help. We need nonprofits to marshal all their resources to promote Give to the Max Day. We encourage you to use it as you would any of your own fundraising campaigns by energizing your donor base, asking supporters to step forward with matching donations to incentivize giving on Nov. 16, and marketing Give to the Max Day along side all your other campaigns. Perhaps Give to the Max Day will be your only or largest campaign this year?

Either way, we are excited to be at the forefront of a trend in increased online giving nationally with a platform we feel is truly “owned” by all Minnesota nonprofits. We’re also honored to be recognized by the Minnesota Council of Nonprofits and MAP for Nonprofits “Nonprofit Mission and Excellence Award for Innovation.” And, we hope our success is the success of all Minnesota nonprofits. Our platform is the nonprofit community’s platform. The innovation we’re doing here is being watched carefully from national players. I hope we can show them something they’ve never seen this November.

About Jeff Achen

Jeff is the interactive media strategist for GiveMN.  He manages the day-to-day operations, communication efforts and social media strategy for GiveMN. He serves as the primary voice for @givemn and administers GiveMN’s Facebook page. He loves it when people follow GiveMN on Twitter and Facebook.

How Technology Has Transformed Charitable Giving

Each year, millions of dollars are raised for charities; the way this fundraising happens is changing rapidly, thanks in large part to technological advances. I love how technology has enabled me to contribute money quickly and conveniently to my favorite charities.

As more of us become more comfortable with internet transactions, it is still important to remain vigilant so that we protect ourselves. Whether you regularly make charitable donations online or are considering this avenue, take the following steps to minimize the chance of potential problems.

How to donate online safely
Always verify the charity. Beware of phony websites. Look closely at the web address of the charity. Scammers may use web addresses that appear similar but not exact to the official site of an organization to deceive users. The Charities Review Council’s online list of reviewed charities includes the URL addresses of reviewed organizations as part of their review reports.

Donate through a web site that is secured: To verify your session is secure, look for “https:” instead of “http:” in the URL address line, as well as the padlock icon on your browser's status bar. I, especially, love donating through secured giving portal sites such as GiveMN.org that accept donations for the charity of my choice. In addition to secure giving, I can also track my giving and print receipts, a very handy feature for when tax time rolls around!

For more information on safe online giving, check out the Council's helpful online giving tips page on our website. Whether you give online or off-line, it is always a good idea to research the organization to learn more about its mission and programs.

What you need to know about texting-to-give
Texting-to-give, also known as mobile giving, is a convenient and quick way to donate to a charity. But wait. Do you know how, when and where your money is going and feel sure that it will be used wisely? Before picking up your phone to text your gift, check out our online tips for what you need to know about texting-to-give.

How have you seen the technology of charitable giving change? What ways can technological advances in charitable giving help encourage philanthropy?

Where are we headed? (Part 2)

Last week in my blog I spent a little time on the background of the Accountability Wizard evaluation project we’ve begun and on three of the themes that emerged in a focus group we held earlier this spring.

I wanted to finish up the themes that will help give a frame work for a future survey tool and talk a little about what we’ve learned to date.

Theme 4: More Recognition By Donors Needed

Is there a measurable difference in donor attitude toward a nonprofit once they have met standards? This, of course, is the proverbial million-dollar question for the Council. What we heard indicates a potential split between individual donors and institutional grantmakers.

I have a feeling that not enough donors consider [meeting the Accountability Standards] an essential for giving money and that the donors who overtly ask you about it tend to be certain corporate or foundation donors rather than individual donors.

Since we see individual donors as a core constituency of our organization, is this a signal that we need to do a better job of connecting with donors and promoting our work? After all, the Kintera/Luth Nonprofit Trend Report in 2005 indicated that 65% of donors do online research before giving. Or is this indicative of what a Hope Consulting study found in that although donors say they believe in doing research before giving, few do? At this point it’s unclear what this means, but clearly there’s something there that we need to dig a bit deeper into.

Theme 5: Increased Confidence

Although focus group participants didn't identify a monetary bump after going through a review, they did say that participating in a review provided an increased sense of confidence.

I wouldn’t say we’ve changed much in the way that we operate. I think there’s, from the board on down, there’s a feeling of confidence that we’re doing the right thing.

This increased confidence was tied to knowing that they were keeping up with best practices. (One of the themes from last week's blog.) A side benefit was also improved communication between staff and the Board. For example, staff had a better grasp of how to help their Boards better understand and apply appropriate standards by which the Board would use to assess the organization.

Theme 6: Strengthening Infrastructure

All interviewed organizations shared the belief that going through the Accountability Wizard helped them to better understand their internal structures, policies, and processes.

[Going through the Accountability Wizard] really strengthens the infrastructure of the organizations and the stronger that gets the more productive and efficient that it is.

For example, some organizations reported that going through the Accountability Wizard has helped improve their internal structures for keeping, organizing and reporting data. Others reported how going through the Accountability Wizard led to streamlined internal reports. Organizations shared the strong belief that the better each were internally, the more it could direct its attention and energies towards its work and towards making a difference with those it served.

Theme 7: Catalyst For Change

The last theme that came up in the focus group was that the Accountability Wizard can serve as a catalyst for focusing an organization on aligning its operations towards best practices. This results in better policies, better and more consistent language used across policies, and better understanding of where we currently stand in terms of organizational best practices

And [the Accountability Wizard] is a nice tool because sometimes we tend to procrastinate about when we do things, about maybe tweaking a policy. So I always say, “Well the Charity Review is coming up folks, get this to the Board” and it gets to the Board so it’s great. I like it! It gets it done.

This theme is an interesting one since, in other words, the review process could be used as leverage to get things done.

Well, that wraps up the themes from the focus group. As we continue down this path of evaluation, we’ll keeping blogging about it, but I’d be interested in hearing what others are doing regarding evaluating their impact. Any suggestions for us? Any lessons learned the hard way or otherwise? Any reactions about what we’ve done so far?

Where are we headed? (Part 1)

"If you don't know where you're headed, any direction will do."

My dad was fond of telling me this as I was growing up. His little riff on Lewis Carroll's quote was meant to get me to focus and pick a career path, but truthfully I thought it was a pretty good philosophy of life as I stumbled from one thing to the next through college and the next few years afterwards.

I've been thinking about my dad and his quote a lot lately as the Charities Review Council has started down the road of evaluating the impact of the Accountability Wizard. The more articles and blogs I read about evaluating nonprofit impact, the more I believe many nonprofits jump into evaluation without fully knowing what this will mean for the organization. Yes, there's something to be said for the boldness of just going for it, but as anyone who has a story of evaluation blues could probably tell you - if you don't know where you're headed, you might end up at the last place you wanted to arrive.

So as the Council approached this evaluation project, we started by getting a sense of what "direction" we were heading. We first got clear on the overall goal: to measure what long-term impact the Accountability Wizard and meeting the Accountability Standards has on a reviewed nonprofit. But in order to get the data to measure this, we have to ask the right questions.

To get to the right questions, we asked a few nonprofits that had been reviewed to attend a focus group facilitated by Wilder Research. (By the way, Wilder Research offers evaluation workshops. Check out their website for upcoming opportunities.) From this focus group 7 themes arose that helped give a frame work from which we'll be able to design a survey tool. I wanted to touch on just a few of the themes in this blog and will cover the rest of them in the next blog post.

Theme 1: Valuing Accountability

Not surprisingly, one thing that came up in the focus group was a shared commitment to accountability. This quote sums up what most everyone said in one way or another:

"We care a lot about being accountable and we’re willing to be measured on it. We want to be measured on it, we want people to know that that’s a value that we hold and we are happy to do what we need to do to achieve that accountability."

According to focus group participants, completing the Accountability Wizard strengthened the belief that as an organization they were accountable. An interesting question that the evaluation might help us better understand is if nonprofits who go through a review typically already see themselves as accountable, does the review process really have a measurable impact in this perception?

Theme 2: Staying On Top Of Best Practices

Nonprofits are expected to do a lot of things on a small budget, so keeping up on current best practices can be challenging. The Accountability Wizard review is one way focus group participants stayed on top of trends.

"I count on you folks [Charities Review Council] to keep us current with what’s new out there and I know our leadership goes out picking up things from different organizations and our own professional societies help with that. But, particularly your group really focuses on what’s new and what needs to be. ...Being a small agency we can’t always go out to all of the seminars so that’s just a wonderful resource."

Not only did we hear that the review process helped keep them informed of best practices, but that it also helped implement those practices in the organization, which in the interest of measuring an impact or change could lead to some interesting findings. Namely, were there common practices that nonprofits tended to change because of the review process?

Theme 3: Significance of the "Meets Standards" Seal

One of the best parts of my job is when I get to tell a nonprofit that they meet all standards. This is usually followed up by, "So does this mean we can use the seal?" Uniformly, focus group participants use the "Meets Standards" seal as a way of communicating their accomplishment. As one person said,

"I mean, we just want to make sure that at every opportunity people know that we meet all the standards."

Foreshadowing some of the themes in the next blog, the question arises – is there any measurable difference in donor attitude toward the nonprofit once they have met standards? This is an important piece of information that we want to learn more about.

To be continued next week...

Outcomes: Our Path to Finding the Time & Making the Effort

Fifteen years ago, okay 20 years ago, when I was a nonprofit newbie, the local United Way hosted a workshop on Outcomes/Impact. There was such buzz and interest in that workshop. Imagine! How awesome it would be to really understand the impact that your organization makes, the change you’re making in the world.

Fifteen years later, as I continue my career here at the Charities Review Council, the topic of outcomes takes on a bit more urgency and weariness. Two of our recent Annual Forum speakers, Paul Light and Ken Berger, confirmed this urgency in their speeches: WE MUST MEASURE—for the good of the nonprofit sector, all of us must measure.

Honestly, I don’t think any of us would argue that measuring our impact isn’t a worthwhile endeavor. Clearly though, (I mean it is 20 years later) the enthusiasm is tempered by the struggle to make it happen. The cognitive dissonance I have about it reads something like:

Yay, let’s measure impact, that would be so cool we could really show our constituents and funders how we’re making change.
vs.
Yeah, right, I think, when are we supposed to find the time to go deeper into our evaluation? The Council is a teeny tiny organization, and there’s always more work to do. How can we really find the right time to dig into impact?

In late 2009, when the Council board of directors approved our revised Accountability Standards, particularly Impact on the Community, we set a new expectation—that all of our reviewed charities have a conversation and assess their impact. Proudly, one of the many things I like about working at the Council is that we try to model what we expect of other charities. We’ve spent the last few months discussing how we meet our own new standards, including the impact on the community.

We’ve let go of our concerns—no more we’re teeny tiny, there isn’t time, we don’t have the funds, we’re unique- a capacity builder. We are finding the time and making the effort. Thankfully, the stars seemed to align: a board member who has his PhD in evaluation, new standards, a pro bono partner ready to help, staff energized and ready to take it on, and a clear project proposal to jump start funding.

Over the next few months, in our blogs and in our e-newsletters, we’re going to talk about the outcome evaluation path. Advocates for transparency, we’d like to have a conversation about it along the away. I mean, really, what if our assumptions about our impact are way off? What should we be looking at from the donor perspective, from the nonprofit perspective? Let us know if you agree with what we’re looking at, or if you have a point to make about our impact.

Accountability Matters

It's been three months since the new Accountability Wizard was launched and the response has been remarkable. Within the first two days, over a dozen nonprofits got started with a review and to date more than 150 nonprofits have created an account in the Accountability Wizard and begun the process.

Several nonprofits have already met all of the new Accountability Standards! The first was Students Today Leaders Forever, a Minneapolis-based nonprofit whose missions is to reveal leadership through service relationships and action. STLF blazed through the Accountability Wizard in less than a month and have posted a blog about it.

While the fact that so many nonprofits are voluntarily choosing to go through a review is exciting, to me it begs a question. Why do nonprofits put themselves through this?

Not to appear self-serving, but one factor clearly is the shifting nonprofit environment towards more accountability and transparency. Simply put, doing good just isn't good enough. Donors (both individual and institutional) expect more proof regarding organizational impact and prudent stewardship of resources. This shift, of course, is happening while philanthropic dollars are declining. (The Urban Institute recently released a study that indicated this trend was beginning as early as 2007 before the bottom fell out of the economy.)

Although accountability and transparency have always been important to the nonprofit sector, now it matters even more. This trend, I believe, is reflected not only in the number of nonprofits that have started the new Accountability Wizard, but also in the burgeoning number of charity watchdog websites and the upcoming changes to the way Charity Navigator rates nonprofits, just to name two examples.

I applaud those nonprofits that have voluntarily stepped up to the plate and started the new Accountability Wizard. In this "new normal" that everyone has been talking about, demonstrating accountability is vital and an Accountability Wizard review is certainly one way to do this.

If you are interested in learning more about the Accountability Wizard, you can sign up for a free introductory webinar on the Charities Review Council website.

Accountability and Transparency - More Than Good Intentions

This Tuesday’s Annual Forum proved to be among the most well-attended and lively of the luncheons we’ve hosted in my five years with the Charities Review Council. We were pleased to have such strong interest in this year’s theme: Accountability and Transparency – More than Good Intentions, with keynote speaker, Ken Berger, President and CEO of Charity Navigator. As evidenced by their tagline as a national charity evaluator: “Your Guide to Intelligent Giving” and the Charities Review Council’s: “Resources for Smart Giving”, the similarities in the work of our two organizations promised to set the stage for a jovial lunch conversation.

When Mr. Berger took to the podium, he wasted no time in letting us know that his intent was to get us all thinking. His focus on the importance of nonprofits measuring and sharing their impact was welcome. He also shared some quite different messages than we Minnesotans may be used to hearing. For example, you can see for yourself in Mr. Berger's presentation that he dramatically characterized many of his experiences with nonprofits as “Tales from the Dark Side”, involving people who were "scoundrels" and "thieves".

This portion of Mr. Berger's remarks seemed to cast a dark shadow over the sector, while my experiences getting to know many of the great people who work here leads me to believe most of us are drawn here because we genuinely want to improve our communities.

Mr. Berger described our two organizations as relatives, with our complementary missions and a bit of a generational difference – Charity Navigator is eight years old and the Charities Review Council has been around for over 64 years now. After many years serving in the role as a Minnesota watchdog, we at the Charities Review Council have intentionally chosen to shift our approach over the last several years. We’re striving to build the public’s trust in the charitable sector by focusing more on the many positive stories of the great, often tireless, critical work so many of our nonprofits are doing every day, rather than continuing our prior approach of drawing so much attention to the occasional scandal and misuse of donors’ dollars.

The Charities Review Council does not shy away from providing objective, third party review reports of the charities we review, and we fully acknowledge that there do exist some egregious cases of nonprofit fraud and abuse – but these are largely the exception rather than the rule. We’ve found in the vast majority of cases of nonprofits not at first meeting our Accountability Standards, these shortcomings are unintentional and eagerly remedied.

As the title for this Annual Forum posed, accountability in the nonprofit sector requires more than good intentions. Yes, there are examples of people and organizations that abuse the good-will engendered by being a nonprofit. But that is all the more reason the vast majority of the nonprofits that are out there doing good work need to PROVE they are doing good work. We must be proactive in showing what difference we are making, tracking and proving it with data, and sharing this with the public.

As we heard on Tuesday, both Charity Navigator and the Charities Review Council are pursuing innovative and promising strategies to enhance our review processes to ultimately improve the nonprofit sector.

What has been working well to help your organization demonstrate its impact in our communities? What ideas do you have regarding the role of the Charities Review Council in helping you do this? We look forward to the continued conversation.

Join us at Annual Forum 2010

On June 15, the Charities Review Council’s will hold its “Annual Forum — Accountability & Transparency: More Than Good Intentions.” In recent years, the event has taken a life of its own.

The Annual Forum is the Council’s opportunity to report to the community on our work to mobilize informed donors and accountable nonprofits for the greater good. And to give voice to the issues of accountability, informed giving and public trust. This year’s speaker, Charity Navigator President and CEO Ken Berger, is a high profile spokesman for informed giving. Known for its formulaic nonprofit ratings, Ken has publicly committed to developing more meat to Charity Navigator’s information for donors. Ken is a former nonprofit head who’s vitally interested in strengthening the sector. It will be interesting to hear what he has to say.

The Council’s Annual Forum has been a popular event among sector leaders that grows in attendance and conviviality each year. So, this year, we’re preceding the noon luncheon with a whole hour of “networking opportunity.” We hope you will join us to add to the goodwill and cheer that will permeate the Golden Valley Country Club on June 15.

Tickets are going fast. If you have not registered yet, reserve your tickets now. See you there!

Thanks but no thanks?

Corporations are a major source of funding for nonprofits. Businesses donate money to charity because they are concerned corporate citizens – showing that they stand for something more than just the bottom line.

However, when a charity receives a donation that is not in line with its mission, principles and values, should the organization accept the money?

The Advocates for Human Rights, a charity that has participated in the Council's Accountability Wizard review process, faced this very dilemma recently when it received a donation from Craigslist, widely known for its sex-for sale ads. The Advocates for Human Rights, a local nonprofit dedicated to protecting human rights and fighting against sex trafficking, decided to send the money back to Craigslist. Their story was highlighted in a recent Star Tribune article. Cheryl Thomas, the organization’s Director of Women’s Human Rights, told us that they have never encountered such a situation before, and that they have received hundreds of emails from across the country congratulating them for sticking to their values and returning the donation.

In these tough economic times, charities need donations more than ever to continue their important work. What would you want your favorite charity to do in this situation? Should a charity return a donation if it came from an organization that is in direct conflict with the organization's mission, principles and values? Or is it OK to accept the money, putting it to good use improving our communities?

To address controversial issues like these up front, a gift acceptance policy can be helpful in laying out guidelines for the types of gifts and sources a charity will accept.

Get Your Legal Compliance Questions Answered

Some of the most common questions we get from nonprofits going through a review have to do with our Legal Compliance standard. Questions like:

• Do we need to be registered in every state?
• Do we have to acknowledge every contribution?
• What kind of political involvement are nonprofits allowed to do?

Here’s a chance to get these questions and more answered.

We’re happy to have Heidi Neff Christianson, Partner at Moore, Costello & Hart, P.L.L.P., presenting a free webinar on Monday, May 10th from 1:00-2:00 pm (CT).

If you’re interested in attending, you can sign up now.

A New Look

We are very excited (not to mention, relieved) to launch an updated website. To some, you may just see a new design with more exciting colors. What we hope you’ll also notice is a site that is much easier to navigate, helping you find what you need when you want it. (If it isn’t, please let us know.) Over the next few months, we’ll be making a few more changes as well.

A less immediately obvious change is a more intense upgrade to the Accountability Wizard, the software we use to conduct reviews of charities. For the last three months, we’ve had our heads down and focused on developing this software.

Actually, the new software has been 12 months in the making as it waited for revised Accountability Standards, new information gathering questions, and new functionality (charities can provide us with documents electronically!). Ultimately, the upgraded software will enable us to serve more nonprofits, which allows us to provide more information to donors about those nonprofits.

Our appreciation and thanks to our website developers, Urban Planet Software, with whom we’ve worked closely for the last 12 months to achieve our many website upgrade goals. We feel as if they’re an extension of our own staff.

And many thanks to Triangle Park Creative for their website design services. The site wouldn’t look nearly as nice if we were left to our own devices.

Of course, we’d be remiss if we didn’t thank the funders that supported the efforts, ADC Foundation and Kellogg Action Lab Innovative Practice Fund.

We sincerely hope that the new website meets your needs. If you have any comments or suggestions, please let us know.

Measuring impact and efficiency

by Rich Cowles, Executive Director

The joint news release last month by Charity Navigator, Guidestar and others discouraging donors from using financial ratios to evaluate charities was welcome news. As an organization that has long tried to move donors away from preoccupation with the Program Expense ratio, the Charities Review Council applauds the release. We also fully agree with the assertion that nonprofits’ impact should be the primary criterion for giving decisions. Our newly updated standards that will be implemented 2nd quarter 2010 include a Community Impact standard and Monitoring Mission and Strategy standards.

The news release has triggered a flurry of posts in the nonprofit blogosphere affirming the importance of Impact, with some disparaging ratios as utterly useless. These comments have included the assertion that donors shouldn’t be concerned with how much it costs nonprofits to achieve their impact. If there were a limitless supply of donations, I would agree. But given donors’ legitimate desire to get the most bang for their contributed buck, they have a right to know about an organization’s efficiency in achieving its impact.

Highly flawed as it is, the Program expense ratio has been a widespread attempt to measure such efficiency. At best, it’s a surrogate until a better efficiency measure can be determined. Ultimately, “Impact per Dollar” is what we want to get to.

The sector is a long way from determining how to measure Impact per Dollar. But there’s an urgency to finding it; it should be an integral part of determining an accepted means of measuring impact. Donors do and should care about nonprofit efficiency. And nonprofits should too. We’re long past the day when nonprofits can expect donors to go for “just trust us.” And that’s a good thing.