Advice from People Smarter than Me

Last week I posed a question in the form of a blog post: What advice, if any, can be given to those of us interested in donating to small, unproven charities without the resources to evaluate their programs? I was unable to answer my own question, so I reached out to people smarter than myself to help me find out what to do.

Looking through the responses I got, I realized I made two false assumptions that led me to pose this question in the first place: One, that small charities do not have the capacity to evaluate in any way, and two, small charities inherently need more resources than large charities.

Saundra Schimmelpfennig, over at Good Intentions Are Not Enough and Charity Rater, made the point that it would be absolutely ridiculous if a non-profit did not evaluate their programs even on a minor scale (all of the following quotes are from email exchanges):

Even lacking the money to do a large scale assessment of their [the charity's] impact, they should still be regularly assessing their work. This should include regular chances for beneficiaries/recipients to rate the assistance they receive and provide suggestions for improving their work. This could be something as simple as a questionnaire sent to the parents at the end of an after school program or feedback from group discussions.

Holden Karnofsky at GiveWell agreed that small-size does not necessarily mean charities aren't able to assess their projects. He pointed our that Village Reach is their top-rated charity but only has a budget of $1 million. He said that "[i]t's rare for any charity to have demonstrated impact, but I'm not sure size is the major factor there." So small and unproven are not synonymous. A large charity can be unproven, just as a small charity can be proven.

Schimmelpfennig also noted the importance of creating a needs assessment before expanding or creating programs to ensure there is no unnecessary duplication of work. This seems essential to any organization regardless of size and should be able to be done relatively low cost. The resulting assessment could serve as some proof that the organization's work is needed.

Karnofsky also called out my assumption that a donation matters more at a small charity. Some small charities are over funded, while some larger, established charities could use more funding for program expansion. He also made the distinction between a donation mattering more "to an organization" versus "to the people you're ultimately trying to help." Stop TB, another one of their top-rated charities, is a large organization, but he said your donation will go a long way in helping the communities the organization serves. This distinction isn't something I had thought of before. I think looking at how far a donation will go in a community is a better starting point rather than how far it will go in supporting an organization. (Although don't get sucked into being concerned about an organization's overhead.) 

So, after analyzing these two assumptions, I realized that criteria for evaluating small non-profits is the same as for any non-profit: Look for efficiency, transparency and effectiveness. Organizations like GiveWell, GuideStar or Charity Navigator are great places to start evaluating, but they don't cover everything. To evaluate on your own, use things like the Charity Rater (which I erroneously stated was only for aid organizations in the previous post; it has now been updated and is applicable to all non-profits) or New Philanthropy Capital's "How I'd Analyse a Charity in Two Hours" (pointed out to me by Sean at Tactical Philanthropy). Also GiveWell's Giving 101 is a great guide.

Commentor Mark and Karnofsky at GiveWell both brought up the idea of venture capital and the different stages of growth for non-profits, which I will attempt to tackle in another post.

Which one of these things is not like the other?

It's time to play a fun new game! It's called "Guess which one of these passages opened up a recent New York Times article on the AIDS epidemic in Africa?"

Is it #1?:

On the grounds of Uganda's biggest AIDS clinic, Moses Nsubuga, a D.J. known as Supercharger, rehearsed his troupe, the Stigmaless Band, composed entirely of teenagers on AIDS drugs.

One of their songs is “America, Thank You So Much.”

Karen Morgan, an American who runs a laboratory at this clinic, said: “Just today, a patient came up to me in the parking lot and said, ‘Thank you, American.’ I said, ‘For what?’ He said ‘For my medicine. You care if I live or die.’"

This once strong support from the American government and international organizations for AIDS initiatives has been waning in recent years. Beleaguered by the high cost of treating and combating the epidemic, donors have started to focus on child killers like stillbirth, pneumonia, diarrhea, malaria, measles and tetanus. Cures for those diseases--which kill significantly more people than the AIDS epidemic--are more cost effective, ranging from $1 to $10.

 Or is it #2?:

On the grounds of Uganda’s biggest AIDS clinic, Dinavance Kamukama sits under a tree and weeps.

Her disease is probably quite advanced: her kidneys are failing and she is so weak she can barely walk. Leaving her young daughter with family, she rode a bus four hours to the hospital where her cousin Allen Bamurekye, born infected, both works and gets the drugs that keep her alive.

But there are no drugs for Ms. Kamukama. As is happening in other clinics in Kampala, all new patients go on a waiting list. A slot opens when a patient dies.

“So many people are being supported by America,” Ms. Kamukama, 28, says mournfully. “Can they not help me as well?”

The answer increasingly is no. Uganda is the first and most obvious example of how the war on global AIDS is falling apart.

If you guessed #2, you're right! Unfortunately.

The first one, written by myself, uses information and phrases, almost verbatim, taken from the article. (Excluding my shameless editorial cut-away phrase "which kill significantly more people than the AIDS epidemic," which is true.) The second, actual opening, follows the guidelines of "How to Write About Poor People" and "How to Write About Africa" as if they weren't a joke. The juxtaposition of these two alternate  articles show how the media portray the continent as dark and troubled, while ignoring or burying any positive aspects of a story.

Now, I'm not trying to say that the AIDS crisis is anything but, or that problems aren't getting worse (and I certainly wouldn't want people to think that I support a Bush foreign-policy initiative). I just mostly feel bad for the Ugandan woman, Dinavance Kamukama, who was caught on probably the worst day of her life and exploited to draw readers into a story, only to have her identity dropped a few lines later and her image transformed into a representation of all African women through phrases like "pregnant women and young mothers like Ms. Kamukama" or "[f]amily members like Ms. Kamukama."

The outlook of the AIDS epidemic is surely bleak, but there is no reason to make the picture any worse. Both of these passages deliver the same information--funding is shifting--but the first goes against stereotypes while the second reinforces them. Readers might want the latter, but I'm hoping we'll put up enough of a fight that that kind of language will go the way of Joseph Conrad.

Small and Effective

Over this past year working for a small non-profit, I've been thinking about how someone could reasonably make a social investment in a small organization without much capacity to prove its impact, or without a established history to show the changes its made in a community. It's easy to make a donation to one of these smaller organizations, but harder to see how your donation (and by extension, the organization) is making a difference.

To do this, one needs data. Most small organizations do not have the resources to evaluate, making it difficult to know if you will ever see any returns on your social investment. GiveWell lays out some pretty good criteria that need to be met before a donor should donate to a small, unproven non-profit (abbreviated here):

1. The donor has significant experience with, and/or knowledge regarding, the nonprofit’s client base and the area within which it’s working...
2. The donor has reviewed whatever information is available about past similar projects and about the assumptions underlying this project. If similar, past projects have failed, the donor has a clear sense of why they failed and what about the current project may overcome those obstacles.
3. The donor has a good deal of confidence in the people running the nonprofit, either because s/he know them personally or because s/he has an excellent sense for their previous work and past accomplishments...
4. The donor feels that the organization is doing whatever it reasonably can to measure its own impact over time. The donor is confident that– within a reasonable time frame – if the project succeeds, it will be able to prove its success; if it fails, it will see this and it will fold. Until impact is demonstrated, there is no need for the kind of scale that comes with taking many donations from casual donors... [Emphasis in the original]

As you can see from the last sentence, this is not advice for the casual donor. Following these steps is a lot of work for someone who only wants to give a small donation. For the microphilanthropist social investors, it might make more sense to donate to a larger charity with proven impact, rather than risk wasting our money on a small non-profit with nice stories but not a lot of data to back up the smiling faces on its website.

However, there are many non-profits who have made it out of the initial stages of growth, but haven't made it to the level where rigorous impact evaluation is possible. These organizations have been around for a while, have somewhat sustainable funding sources, but are constantly looking for new funding to ease the financial tension that comes with being a small non-profit. For these organizations, small contributions can go a lot further than at larger organizations which aren't as strapped for cash. It is also these small organizations that do not have the resources to prove their impact as well as the larger ones, or decide not to spend time on rigorous evaluation because it will disrupt the flow of services. Unfortunately, because of this, small organizations can usually only offer potential donors nice stories and smiling faces.

So, I don't really know how to offer advice to those who want to invest in a small organization while also ensuring whatever organization chosen will have a real impact on the population it serves. One way goes off of GiveWell's point #3: Actually knowing the individuals who work there and having an extensive knowledge of how the organization works. Another piece of advice I can think of is to use Charity Rater, which guides you through the evaluation process for a non-profit you choose. Besides those, as much as I hate to admit it, all I can come up with is to find one you have a good feeling about and support capacity building efforts to help it prove its impacts.

Each of these options has drawbacks--most casual donors are not intimately involved in a non-profit, Charity Rater is set up to evaluate aid organizations and (most significantly) a small donation can't go far when it comes to supporting evaluation techniques. But I'm hesitant to admit defeat and say that these are the only options out there for those of us interested in choosing a small, effective organization, but without a lot of time or money to put into our investments. There has got to be more guidance out there, I just can't think of them.

Thoughts?

Thanks to Mark for passing along this post idea.