Nonprofit Chronicles

Journalism about nonprofit organizations and their impact

priceIt’s strange, when you think about it. Most things have a price. A big box of Cheerios costs $3.98. A 1 lb. bag of Starbucks Breakfast Blend costs $12.95. An iPhone 7 costs $649.

But when we donate to charities, what are we buying? And at what cost? That’s more difficult — indeed, it’s often impossible — to know. So how, then, can we compare charities, the way we compare Cheerios to Wheaties, Starbucks to Dunkin’ Donuts or an iPhone to a Samsung Galaxy?

Alas, we can’t.

This makes it harder than it should be to steer our donations to the nonprofits that do the most good.

I’ve been thinking a lot lately about this question of costs. (Please see below: I would love to hear from readers about this.)  Recently, I had the opportunity to discuss it with a couple of staff members at a global federation of nonprofits called WaterAid. Sarah Dobsevage is director of strategic partnerships at WaterAid America and Vincent Casey is senior WASH (which stands for water, sanitation and hygiene) advisor at WaterAid International in London. WaterAid is a global federation of nonprofits that collects money in rich countries and spends most of it in 38 poor countries, working with local governments and nonprofits to “transform the lives of the poorest and most marginalized people by improving access to clean water, sanitation and hygiene.

As I’ve written before (see my 2015 blogpost, Water Taps and Information Gaps), there are dozens, perhaps hundreds, of charities that provide water and sanitation to the poor. Among those listed at GuideStar are charity: water, water.org, Water for People, Bread and Water for Africa, Living Water International, Millenium Water Alliance, One Drop Foundation, World Help, and Water is Life. Big anti-poverty NGOs including Care, Catholic Relief Services, Save the Children and WorldVision operate their own WASH programs. They’re funded by governments, foundations, companies and the rest of us.

The problem for anyone who wants to support providing water and sanitation to the poor is figuring out which nonprofits are effective and efficient. Can transparency around pricing help solve that problem? Or, paradoxically, could pricing get in the way of smarter giving? 

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doubtThis is likely a product of confirmation bias, but I’m often reminded of how little we know about stuff that matters.  Friends with health issues visit doctors who don’t know what to do. (Maybe they should do nothing. As Atul Gawande, wrote in The New Yorker in 2015: “An avalanche of unnecessary medical care is harming patients physically and financially.”) We can’t be sure which foods to eat and which to avoid, as the current debate over sugar reminds us. Economics, of course, is riddled with uncertainty. Will higher minimum wages eliminate jobs? No, says the U.S. Department of Labor (at least until the Trump team digs into its website). Yes, says the Congressional Budget Office, but it will lift incomes, too. Setting aside the problems caused by experts-for-hire and “fake news,” scientists and social scientists operating in good faith simply cannot agree on answers to some fundamental questions.

One of those questions: What should we do to help the global poor? Behind that question is another, namely, how do we know what to do to help the global poor? That is the topic of an intermittently fascinating new book called Experimental Conversations: Perspectives on Randomized Trials in Development Economics, edited by Timothy N. Ogden. It consists of a series of interviews in which development economists talk about the impact of randomized control trials (RCTs), and what they have learned from those experiments in the field–about microfinance, deworming, cash transfers, financial-literacy training and other interventions by governments and nonprofits designed to alleviate global poverty.

A knowledgeable insider who is managing director of the Financial Access Initiative at NYU, Ogden collared most of the world’s best-known development economists to talk about RCTs. Featured, among others, are Abhijit Banerjee, Nancy Birdsall, Chris Blattman, Alex Counts, Tyler Cowen, Angus Deaton, Esther Duflo, Rachel Glennerster,  Elie Hassenfeld, Dean Karlan, Michael Kremer, David McKenzie,  Lant Pritchett and Antoinette Schoar. Continue reading

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Last week, ExxonMobil added Susan Avery, a physicist, atmospheric scientist and former president of the Woods Hole Oceanographic Institutions, to its board of directors.

Shareholder advocates, led by the Interfaith Center on Corporate Responsibility (ICCR), which has been organizing shareholder campaigns at ExxonMobil for nearly two decades — yes, two decades — welcomed the appointment.

Tim Smith, the director of environmental, social and governance (ESG) shareowner engagement at Walden Asset Management, said in a news release: “This action by the board is encouraging for shareowners and we want to commend Exxon for this prudent and forward-looking decision.”

For shareholder advocates — investors who represent public pension funds, socially-responsible money managers, unions and church groups, and exercise their rights as owners to try to influence corporate behavior — this is about as good as it gets. ICCR and its allies have for three years called on ExxonMobil to elect an independent director with climate  change expertise. They’ve won.

But will the planet notice? Of course not. No new director, not even a climate scientist –and there’s a difference between being a scientist and an advocate — will persuade the board or top executives of ExxonMobil to turn a company that says it is “committed to being the world’s premier petroleum and petrochemical company” into, say, a wind or solar firm. In a long profile of ExxonMobil published just this week, Steve LeVine of Quartz concluded: “Exxon is, and will long continue to be, foremost an oil company.”

Shareholder advocates will continue to push ExxonMobil, and the company will continue to do what it chooses to do, a dynamic that underscores the problem with shareholder advocacy: It’s all about persuasion. Those hundreds  of shareholder resolutions that are filed every year with big companies? They are all precatory — a fancy legal term that means expressing a wish or request — and so corporate managers are free to ignore them, and often do, even in the exceedingly rare cases which a majority of shareholders vote for a resolution. 

I say this not to disparage shareholder advocates. I’ve long admired such titans of the shareholder advocacy movement as Robert A.G. Monks (who I profiled in 2002 for FORTUNE) and Nell Minow, as well as Tim Smith, who led ICCR for many years, and their allies at nonprofit As You Sow, . But in these times, it’s important for social-justice advocates, nonprofit groups and those who fund them to take a hard-headed look at their strategies, to see what’s working and what is not. As Kevin Starr, who heads up the Mulago Foundation, argued recently:

That means that you get absolutely clear on what you’re setting out to accomplish, identify the outcome(s) that would signify impact, connect the dots from your work to all the way to impact, and strip away all the stuff that doesn’t get you there. You measure what’s critical to delivery, behavior change, and eventual impact, and you continually iterate based on what you measure.

How many social-justice advocates, nonprofits and foundations do this? Not enough, I’m certain. Which brings us back to shareholder advocacy.

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An LPG cookstove, from Envirofit

Nonprofits that make cookstoves for the global poor have not been blessed with an abundance of resources. So  you would think that the community of stovers, as they’re known, would be pleased by a big infusion of money into the sector from the US government and the Bill & Melinda Gates Foundation. Nope.

The National Institutes of Health (NIH) last fall announced that, with support from the Gates Foundation, it will fund a $30.5 million, multi-country, five-year study to see if cookstoves that burn liquified petroleum gas (LPG) reduce deaths and illnesses, especially in women and children who suffer the greatest exposure. This is almost surely the biggest single grant in the history of the sector, and it sets the stage for further investments in cookstoves, if the study finds that cleaner LPG stoves deliver meaningful health benefits.

A byproduct of crude oil or natural gas, LPG is made of propane or butane or both — it’s similar to the fuel that powers backyard gas grills in the U.S. — and it’s distributed in poor countries in 12kg cylinders. It’s easier to get LPG to poor people living without electricity than it is build out a grid, says Michael Kelly, the deputy managing director of the World LPG Association. “It’s a very good solution for countries that are rapidly developing,” he told me. “You can essentially take a cylinder of natural gas and put it on a donkey and you can have clean energy anywhere.”

Well, sure, clean energy in the sense that LPG burns cleanly and thus shouldn’t, if used properly, contribute to the household air pollution that causes more than 4 million premature deaths each year, according to the World Health Organization (WHO). Then again, it’s not truly clean because LPG, like all fossil fuels, generates CO2 emissions that threaten the health of the planet and its inhabitants by contributing to climate change.

That’s one reason why some stovers are underwhelmed by the NIH-Gates LPG study. Others say that it’s clear that LPG stoves will deliver health benefits, if properly used, so why do a study? Still others worry that the NIH-Gates study could lead funders with deep pockets to favor LPG over cookstoves that burn biomass, i.e., wood, charcoal, dung or agricultural waste. The vast majority of cookstoves in poor countries burn biomass.

So what should we make of the NIH-Gates grant? As always, nothing is simple in the cookstove sector, which has an unfortunate history of promising more — improved health! climate change mitigation! empowered women! local jobs! — than it can deliver. And yet, until the world finds a way to get clean energy to the roughly 1.3 billion people who lack it, cookstoves are too important to ignore. 

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The Humane League, protesting at Aramark

The Humane League is on quite a roll. Last fall, THL, an advocacy group that aims to reduce animal suffering, pressured foodservice giant Aramark to agree to improve its treatment of broiler chickens, a important victory as the animal welfare movement turns its attention to the chickens we eat, along with egg-laying hens. The nonprofit Animal Charity Evaluators again named THL one of its three top charities.  Most important, the Open Philanthropy Project, a collaboration between GiveWell and Good Ventures, which is the family foundation of Dustin Moskovitz, the co-founder of Facebook, and his wife Cari Tuna, has in the last year given $3 million to The Humane League. Those donations are game-changers for an organization that just a couple of years ago had a budget of about $922,000.

The Humane League stands out because of its willingness, nay, eagerness to figure out what works when it comes to advocacy–not an easy task. A grass-roots organization with organizers based in 14 cities, THL has pivoted from one tactic to another, starting with broad public outreach around animal cruelty and vegan eating, then putting its activists and volunteers behind Meatless Monday campaigns in public schools and, most recently, focusing on corporate campaigns like the one against Aramark. There’s a lesson there for advocacy groups of all kinds–constantly ask yourself whether what you are doing is working.

“We’re very utilitarian,” says David Coman-Hidy, THL’s executive director. “We don’t want to get tied to any one tactic.”

As Animal Charity Evaluators wrote in its review of THL:

THL’s most significant advantage is not any single program, but rather its general approach to advocacy. Among animal advocacy organizations, THL makes exceptionally strong efforts to assess its own programs and to look for and test ways to improve them.

THL is just getting going. Its fledgling research arm, called Humane League Labs,  is led by a committed volunteer named Harish Sethu, who is a Ph.D. computer scientist, university professor and former IBM executive who worked on the powerful computer Deep Blue. Sethu plans to conduct a rigorous study to see if animal advocacy actually changes what people eat–a fundamental question about which, surprisingly, little research has been done.

Then again, maybe it’s not that surprising. The impact of advocacy is hard to measure, whether we’re talking about animal welfare, climate change, LGBT or women’s issues, health care or tax policy. This is obviously a problem. Nonprofits spend lots of time and money on what looks to me like pointless advocacy. The Sierra Club declares that it is horrified by Scott Pruitt, the man nominated by Donald Trump to lead EPA. Teachers unions launch an aggressive campaign against Betsy DeVos, Trump’s choice for education secretary. Will these campaigns stop their nominations, or lead to greater support for the environment or public schools? It’s impossible to know, but I’m dubious. I’m fairly certain that advocacy groups don’t devote enough time and money to testing their tactics and their messages. What, for example, has been bought with the hundreds of millions of dollars poured into climate-change advocacy  in the last decade? Where’s the climate movement, beyond the campuses? It certainly wasn’t evident on November 8.

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I’m enjoying a month-long break from writing and blogging (with the exception of this post) and spending much of that time reading books. The other day, I spent a couple of hours curled up with a book during the afternoon. What a treat! Looking back at 2016, I wish I’d spent more time reading words between covers and less time browsing Facebook or tending to my Twitter account. Books provide perspective, which is sorely needed right now.

Here are the books that I read and (mostly) enjoyed last year, in the order in which I read them: Continue reading

make_difference_charitable_givingMy wife Karen Schneider and I gave about six percent of our pretax income to charity in 2016. Most Americans give away about three percent of their adjusted gross income, according to the Urban Institute, but our earnings are higher, so we should give away more, in my view. The Life You Can Save, a website inspired by the moral philosopher Peter Singer, has a calculator that recommends the percentage of your income that he believes you should give.

I’m writing about my own giving because (1) I’m a strong believer in transparency,  (2) I’d like to influence readers to be more intentional about their giving, and (3) I’d like to encourage more people to talk about their charitable giving so that we can learn from one another. Continue reading