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What matters when you’re deciding where to donate?

March 18, 2009

The Chronicle of Philanthropy hosted a very interesting on-line roundtable this week about what donors need to know when they’re making giving decisions.  I hope that some South Asian donors followed the discussion and will benefit from the coverage here at SAPP – let us know in the comments what you think, and what matters to you when you donate money…

Participants included Ken Berger of Charity Navigator, H. Art Taylor of the BBB Wise Giving Alliance, and Steven DiSalvo of the Hopewell Group (a philanthropic consulting firm).

All the participants returned to the importance of looking at a nonprofit’s effectiveness – are they achieving what they set out to do? Are they doing it in an efficient way? Are they making a difference? One of my pet peeves about Charity Navigator has been that they haven’t perfected a rating for the outcomes of nonprofits, so they rely too heavily on the IRS Form 990 figures. This ends up penalizing nonprofits that count a huge amount of in-kind services as income, for example. I was glad to read that CN is fine-tuning some measures on that front.

And speaking of the Form 990, all of you donors out there should know that the tax returns of all registered charities are available at Guidestar. The participants of the roundtable each stated what you should look for when reading one of these tax returns:

Steven DiSalvo: Most people look at income right away. It is a clear indicator of the financial health of the organization. I scroll down to the Board list and five highest paid employees. It gives me a sense of the quality of the team that has been assembled. After all, the long term health is really driven by the people around the table.

H. Art Taylor: First, I try to gather the seriousness of the organization from the quality of its mission statement. If the mission is vague and does not clearly articulate the programs of the organization, I lose patience. Secondly, I look to see if there are conflicts of interest among the board and staff. That’s another turn off for me. Third, I am interested in knowing how long they have been in business. Given the number of organizations already in existence, a newer organization has to sell me that it’s better positioned than one that’s been around for a while.

Another interesting Q&A from the roundtable addressed a question that many of you smaller donors out there might have thought about. Ken of CN recommends that donors give a small number of larger gifts (rather than a larger number of smaller gifts) because it’s more efficient for the charity processing the checks. I’m not sure I agree since I think it’s also good to spread the wealth around, and lots of smaller gifts demonstrates to bigger donors that there is a broad base of support for any one charity.

What about you?  What matters to you?  Do you use Guidestar or Charity Navigator?

3 Comments leave one →
  1. March 18, 2009 4:34 pm

    On the subject of measuring the effectiveness of charities, have you tried Curious to know what you think about them.

  2. asridhar permalink*
    March 19, 2009 7:44 pm

    Thanks, Sylvia! I have checked out Great Nonprofits a little bit, but have not really spent much time on there. I think it’s interesting to use a review-based system, as we do with consumer goods on Amazon and the like. I’ll be curious to see what happens. I think with a review-based system, you need a critical mass of reviews for the organizations and the donors to benefit. Getting people to talk openly about their giving decisions – while the goal of SAPP in part – is probably more difficult than talking about books or CDs. Do you use it often? How about any of you readers out there?


  1. Guidestar’s advice on making wise giving decisions « The South Asian Philanthropy Project

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