Thursday, January 28, 2010

Changing Tide?

The general consensus appears to be that the philanthropic response to the Haiti earthquake disaster shows donors no longer just want to give, but they want to give smart. Traditional media have responded to donors' desires for more information about their investments and the donors themselves have found their way to the non-traditional medium (see comments section) of blogs.

However, saying this disaster reflects a change in donors' behavior ignores the fact that disaster relief is one of the worst things to donate to. Donors gave in response to the devastation the earthquake caused, but the devastation could have be lessened by preventative investments. If donors actually thought about the full cycle of their investments, they would have supported development organizations in Haiti, ranked 157th among countries by GDP per capita, before a major disaster knocked them back even further.

Of course, that assertion above ignores the fact that a major disaster is an incredible, globally emotional time and people can't help but give. (Not to mention all the capital needed to rebuild.) I gave, my family gave, my friends gave, my co-workers gave. I hope you gave too. (Or will.) But, when giving, don't give: invest, especially if it's in response to an overwhelming emotional pull to help.

I encouraged everyone who asked my advice to give to Partners in Health. They've been in Haiti for a long time and they will continue to be there after the recovery is over and national attention as shifted. This long-term investment is what's needed for any sort of improvement. If you have given, consider staying involved in your organization regardless of how much thought you put in the decision, or at least, remain aware about the Haitian reconstruction efforts.

I'm not sure how this demand and supply for good donor information surrounding Haiti will translate into results or if it will remain when people consider their yearly donations. But I hope the tide has actually changed.

Tuesday, January 26, 2010

Measuring on My Mind

So I've got measuring on my mind. I wrote another guest post at Philanthropy Action about how a focus on measurements of programmatic effectiveness, when pushed from the outside by donors, could actual harm non-profits' efforts. It's in response to Mario Morino's most recent column for Venture Philanthropy Partners (which is fascinating and something everyone should read.)

This post, I think, synthesizes the arguments of my last two and makes a fundamental conclusion to keep in mind when looking at an organization's effectiveness: a lack of measurement does not mean a lack of results. As a donor hoping for accountability, that's hard for me to admit, but as a person who has worked for and with non-profits, I know it's true.

Of course, that doesn't mean every non-profit is doing good. But until social outcome measurements are the universally-accepted standard (and there is money to support the process), social investors shouldn't be discouraged by a lack of data. Instead, they should encourage measurement and evaluation whenever possible.

Friday, January 22, 2010

The Search for the Holy Grail

If social investors are looking for returns on their investments, they need to see some numbers. Some things, like health programs, are more easily measured than other things, like environmental advocacy, but the burden of proof is on the organization to show what they are doing makes a difference.

Unfortunately, most organizations don't have the capacity to effectively measure their outcomes. Measuring takes time and resources and there isn't one all-encompassing measurement tool to determine an organization's impact--you can't do a randomized controlled trial on increased awareness about factory farming. You can support some of the few organizations that have the capacity to prove themselves, but if you aren't interested in the work they do, I would recommend supporting "high-preforming" organizations.

"High-performance" non-profits are up-and-coming, have good management and are attempting to evaluate. They differ from "High-Impact" organizations, the type that have made a difference and can prove it to you.   As Sean says at Tactical Philanthropy, funding is needed at all stages of growth. High-impact is the "holy grail" for social investors, but like the holy grail, it's something to aspire to and not something we should expect. (Others would disagree, and for good reason.)

If you find your own holy grail out there (again, I'd recommend looking at this list to start), stick with it. But if you can't find a non-profit you are completely satisfied with that can give you good measurable results, don't despair. Look for one moving in that direction and support its capacity building. With your support and encouragement, you can help it develop the practices it needs to prove to you (and other funders) that what it's doing is making a difference.

Wednesday, January 20, 2010

Maybe I'm Wrong

I recently wrote a guest post at Philanthropy Action about how blogs like this one might not be reaching enough donors. I argue that information about the merits of accountability and efficiency might be more useful if directed towards non-profit employees. Check it out.

The takeaway for social investors from this post is not to give up on hoping for more accountability from your organization, but to encourage from the inside. Obviously, don't put your money into a failing organization, but give it time to develop the practices you want to see.

I'd love to hear any comments about it here or at Philanthropy Action.

Friday, January 15, 2010

Oskar Schindler's Path to Insanity

My dad made me watch "Schindler's List" as a kid. I remember being particularly moved by the ending, where Schindler realizes that with more money, he could have saved more lives. His (or rather, Liam Neeson's) emotional reaction to this realization stuck with me.

As a Western consumer, I am inundated with this same scenario every day. Faced with daily pleas of "$10 can save a life" or "Sponsor a child for 2 cents a day," I go back and forth between ignoring them and trying to keep myself from slipping into the same insanity that Schindler must have felt when he looked at his pin and saw in it the value of a human life.

Of course, once I realized that most of these claims are blatantly false, it was much easier to ignore them. But ignoring organizations that lie about their operating expenses can't change reality. The money sitting in your bank account or the money you just spent on that I-pod can actually save (or dramatically increase for the better) another human being's life, assuming you donate to the right organization. It's enough to make you take a vow of poverty. Or loose your mind.

I've struggled to balance my desire to live the life I want with helping others as much as possible. I don't have any answer to this struggle other than to continue to work on balance. But I think it would be helpful, and maybe stave of insanity for a little while longer, to remember that our money isn't actually saving anyone's life.

Schindler was wrong. Money alone didn't keep the people on his list from the concentration camps, he did. His pin held no value beyond the labor that was put into it and what another human would give him for it. The money you give to those organizations claiming to save lives isn't saving anything by itself, it's the organization's employees that do all the work. Money (or in-kind donations or time) transfers resources to these people to help them, but money alone is worth nothing. It's people that save lives, not money.

To conclude, I am going to quote Marx (I'm a capitalist, I promise):
The distorting and confounding of all human and natural qualities, the fraternisation of impossibilities – the divine power of money – lies in [money's] character as men’s estranged, alienating and self-disposing species-nature. Money is the alienated ability of mankind.
As you look to invest, especially during these times of great need in Haiti, don't be distraught because you aren't turning over all your savings to help the under-served. Those messages of small amounts of money making a big difference are compelling, but, like Marx's critique of currency says, ultimately alienate the true power behind your investment. You are not paying someone to save a life, but investing your own resources in life-saving (or society-changing) organizations. You are not making a transfer of funds, but a transfer of ability.

Do not confuse the money in your pocket with the value of a human life. That currency is worth nothing. The only real thing of value you have is yourself and all the people around you.

Monday, January 11, 2010

Alliance for Effective Social Investing

I just read this great report from the Alliance for Effective Social Investing. They discuss how to determine the level of risk associated with a social investment. They call a low-risk, guaranteed-return non-profit a "blue-chip" investment and a high-risk non-profit a "social venture" investment. These types of investments are evaluated based on three "domains": technical data use, strategic data use and program value. Each of these procedural domains includes a matrix to determine the degree of risk involved in each non-profit.

Needless to say, it's technical, but also accessible. I would strongly recommend it if you are interested in pursuing social investments. At the end of the report, they lay out a five step guide to social investment which is, needless to say, much more in-depth and detailed than my own. I'll summarize it here:

1. Select the domain(s) in which a given investment is intended to produce social value
      Also known as "choose a cause." 
2. Decide whether to make a “blue chip” or “social venture” investment.
     They don't discourage either. You just need to consider how much risk you are comfortable with, the time you want to put into the process and the amount of money you have to invest. They have a rigorous 26 question survey that helps you determine what type of non-profit ("blue-chip" or "social venture") you are dealing with once you start your analysis. 
3. Perform rigorous due diligence.
     This includes their survey, but also an assessment of the non-profit's financials, leadership and stakeholders. 
4. Invest with high intentionality.
     If you are making a "social venture" investment, make sure you want to put in the time to be assured your donation is getting a high return. If you don't want to, it's better to go for a sure thing. (They mention that health-related organizations "lend themselves rather well to 'blue chip' investments.") Even with a "blue chip" investment, you need to keep tabs to make sure your organization is reporting results you are comfortable with.
5. Share investment performance data.
     "Social investing should not be secretive and competitive." This goes without saying.

Wednesday, January 6, 2010

Would you change your giving?

I recently signed up for GiveWell's periodic updates (which I strongly recommend) and the initial email came along with a this survey question:
Would you consider supporting different organizations if you found options that could accomplish more good with your donation?
I read this and thought: "Of course. That's what I'm all about." But then I thought about my recent first-time decision to donate. It was to a small organization working on economic empowerment, the type of organization I've always worked with and been interested in. It was the type of organization I set out to donate to.

So, then I thought: "Would I really? Or am I just blind to all, potentially better, alternatives?"

If your favorite organization (or your favorite cause) ended up on the naughty list, would you accept it and move on, or would you defend it to the end? Maybe you'd make up an excuse, like it is working to solve broader, more difficult to measure problems or it is a small organization finding its way. Or maybe you'd say: Who's to decide what organization is better than another?

I hope that's not what I would do. What would you do?

Monday, January 4, 2010

In the business of putting yourself out of business

GiveWell celebrated the New Year by bringing a constructive-criticism smack down on to Philanthropedia, another alternative charity evaluator. (Philanthropedia's eloquent and respectful response is here and here.) This behemoth of a post was preceded by their year-end wrap up, where they reiterated their guiding principle that by donating to their top-recommended charities, individual donors can actually save another human being's life.

While their year-in-review may seem less controversial than an expansive critique of a partnering organization, I am going to set myself up for my own smack down (assuming they even read this blog) and say that focusing on how to save the most lives is a misguided view of charity. Instead of trying to save lives, charities should tackle and confront the major underlying cause of the world's problems: Injustice.

I am not an expert on the philosophy of injustice, so I will let Dr. David Hilfiker make my argument for me in his essay "Justice and the Limits of Charity." In summary:
[T]he fundamental problem for the poor in our country is not homelessness or AIDS or hunger or the like—or even any combination of these.  They are just symptoms; the problem is injustice.  In promoting our institutions, it is natural to emphasize the importance of our own project.  But this can lead to subtle impressions that if we just distribute enough food, or create enough bed space, or find enough homes—that is, if we just treat the symptoms—we will have solved “the problem.”
The essay is a little outdated and focused on the importance of advocacy, but the takeaway is powerful: Donating to charities based on their capacity to save lives uses a fundamental approach of treating the symptoms of problems and not the problem of injustice itself. This approach is ultimately unsustainable and therefore detrimental in the long run. The plight of the African slum dweller, or the Southeast Asian farmer, or the inner-city American youth isn't that they don't have health care or that they don't have enough to eat, but that they are not entitled to receive those services. Offering those services in the short-run is necessary and essential, but it does not confront the reality of injustice and work toward a more just world.

Six out of the ten top-rated charities on GiveWell are health-related. I do not think health organizations are doing detrimental work, I think they are offering necessary services to those who need it. But providing necessary services to individuals (also know as saving or changing lives) should not be the end goal for charities, or for the individual who invests in those charities.

Instead, charities should see themselves as a band-aid solution to fill in when governments and traditional institutions cannot (or refuse to) meet the needs of their communities. My friend who works at the DC Rape Crisis Center told me her organization wants "to put themselves out of business." This should be the end goal for all charities: Creating enough transformative change in society to rid the world of the need for them.

It should be noted that many health organizations are working to change the overarching structures in society. Village Reach, GiveWell's top charity, works to improve the health structures in rural Africa. The second highest-rated, Stop TB Partnership, aims to, well, stop tuberculosis. But choosing (and evaluating) based on the capacity to save lives ignores the fact that even with every individual life saved, the need for those charities still remains.

So what to do? You can do what I did and invest in charities that work on economic empowerment, which I think can create systemic transformative change from the bottom up. But if everyone did that, charities would fold and lives would be lost. (I made my decision with the safe assumption that most people don't act based on what I do.) It's tricky. But what's important is to remember, whether you evaluate charities, you work in a non-profit, or if you are a social investor, you should always be in the business of putting yourself out of business.

(Additional thanks to my other friend, Nora, who sent me the Hilfiker essay.)