Thursday, March 20, 2014

Three Must-Read Nonprofit Articles

We’ve talked before about our love for discussing nonprofit trends, perspectives and current events around the office. The nonprofit news reel has been chalk full of exciting and interesting reads over the last few weeks, and these three articles especially piqued our interest.

Reddit To Donate 10 Percent Of Ad Revenue To Charity
Reddit, an entertainment, social networking and news website, has announced that it will donate 10 percent of its ad revenue to charities determined by the community. According to their blog post, "We want to show that advertising doesn't just support the Reddit platform, it also directly supports the causes and goals of Reddit as a whole." At the end of each calendar year, Reddit will accept nominations for nonprofits from its users. The potential recipients will be narrowed down through an electronic election, and the money collected will be distributed proportionally based on percentage of votes to the top ten nonprofits. The Huff Post thinks it’s a good idea, and so do we.

GiveDirectly? Not So Fast.
At the Charities Review Council, we are huge supporters of nonprofit innovation, so when we heard about GiveDirectly last summer, our office was abuzz with thoughts, ideas and opinions about the nontraditional model. GiveDirectly sends money via mobile payment straight to the poorest people in Kenyan villages. That’s it, plain and simple. The approach has broad appeal to donors, as their donation dollars go directly to the recipients in need. But a recent blog post by Stanford Social Innovation Review points out the flaws. According to the article, “It’s an experiment—an important one, but an experiment nonetheless. We hope we’re wrong, but our hunch is that it is more of a 1-year reprieve from deprivation than a cost-effective, lasting ‘solution to poverty’.” What do you think?

Busting the Nonprofit Overhead Myth starts with you
Our friends at Nonprofits Assistance Fund posted an insightful piece on their experience working with nonprofits and attempting to bust the Overhead Myth - the percentage of expenses that a nonprofit spends on administration and fundraising. Executive Director, Kate Barr, asks the question, “Why do so many nonprofits perpetuate the very myth that we claim we want to dismantle?” She suggests scratching the traditional pie chart illustrating program, fundraising, and administrative expenses, and replacing those three slices with “more meaningful information about how resources were used to deliver each of those great programs.” Our 25 Accountability Standards measure a nonprofit’s governance, fundraising, public disclosure, and financial activity, taking into account the expense ratio as one small measure of a much larger picture of nonprofit impact. We are with Ms. Barr on this one. In fact, we joined last year’s national conversation about the Overhead Myth and provided nonprofits and donors with tangible ways to move the conversation beyond the ratio.

What have you been reading lately? Do you have any thoughts or opinions on creative ways to support charities, nontraditional nonprofit models, or busting the overhead myth?

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