Nonprofit Chronicles

Journalism about foundations, nonprofits and their impact

The Internet has made it easier than ever to identify the best books, movies,  songs, hotels, restaurants, mutual funds, even foreign-language tutors. To identify the best charities? That’s harder.

The Raikes Foundation, which is the family foundation of Jeff Raikes and his wife, Tricia, wants to help, by enabling donors to do more good with their money. Last week, it unveiled a new website, Giving Compass, in beta, which was timed to the annual Giving USA report, which found that Americans gave about $390bn to US charities in 2016.

Some of that $390bn will do enormous good. Much will not. One reason why is that donors can’t easily find trustworthy information about the effectiveness of nonprofits.

I’ve just written a story for The Chronicle of Philanthropy about the Raikes Foundation’s effort to help people give smarter. The story also looks at Giving By All, a program of the Bill & Melinda Gates Foundation that is exploring ways to persuade Americans to give more and give better.

Not surprisingly, these are complementary efforts. The two foundations are neighbors in Seattle. Jeff Raikes was a top executive of Microsoft for 26 years, working for Bill Gates, after which he became chief executive of the Gates Foundation, again working for Gates. Jeff and Tricia Raikes were also the first Microsoft couple to meet and marry.

My Chronicle story says:

As befits their roots in the technology industry, both foundations will bring to bear the reach of the internet, the power of big data and the insights of behavioral science to their efforts to change the ways Americans give.

This blogpost will take a closer look at Giving Compass, which invites people to join “a community of donors who use the best data, technology, and peer learning to give well.” Its target audience is not the billionaires who sign the Giving Pledge, but those who are able to make gifts of $10,000 or more. It should be valuable to others as well. Its tagline: We organize the world’s information to make it easier to give well.

For now (and remember, this is just a beta version), Giving Compass mostly aggregates content from elsewhere, including Stanford PACS, which helped develop Giving Compass; the Center for High Impact Philanthropy (see my 2016 blogpost about its good work); The Bridgespan Group, a nonprofit consultancy that advises donors and nonprofits; and The Philanthropy Workshop and Social Venture Network, which are global donor networks. It links to relevant stories from newspapers and magazines. This is useful, but hardly path-breaking.

Giving Compass also plans to offer an online course in philanthropy developed by the Effective Philanthropy Lab, a small group at Stanford that includes Paul Brest, the former president of the Hewlett Foundation, and Nadia Roumani, an expert in human centered design. The course has been tested with SV2, a Silicon Valley giving circle, and with Brest’s Stanford business students, and it is evolving based on user feedback. “One thing that came out repeatedly,” Brest told me, “was their desire for curated, vetted tools from a trusted source.”

Stephanie Gillis, who is leading the Raikes Foundation’s Impact-Driven Philanthropy Initiative, told me that the effort is built around four i-words: It will create opportunities for donors to get involved in collaborative grant-making, it will invest in research and donor education, it will inspire people to give more thoughtfully and it will innovate (of course!) around new products and tools.

All that sounds good. But I’d hoped to hear a different i-word. Intermediary. Donors who want to make more of a difference need middlemen (or middlewomen) to evaluate and report on nonprofits, and there’s not nearly enough of it, despite the valiant efforts of the Center for High Impact Philanthropy, GiveWell (which guides my giving, but investigates only a handful of nonprofits), Animal Charity Evaluators, ImpactMatters and a very few others. Charity Navigator, GuideStar and Great Nonprofits are useful but limited because they are not yet able to measure impact.

So why is giving smartly so hard?

Consider, as an example, a donor who is passionate about climate change.  Plug in “climate change” into the search bar on Giving Compass that asks, “What’s your passion?,” and you’ll get an assortment of stories but nothing that feels like useful guidance. That’s because it’s all but impossible to know which environmental groups are most effective. [See my 2015 story for Ensia, How Good is That Environmental Nonprofit, Anyway?] No one’s done the evaluations, except, perhaps for big foundations, which share very little of what they know.

Or consider the story of a woman who works for a feminist organization and has given to Planned Parenthood and the National Network of Abortion Funds. Now she’d like to make a substantial donation to support women in poor countries. Because the stakes are higher, she wants to know that the money will be well spent. But where to start? She called around to some insiders and has decided to give to a fund for feminist activism called Mama Cash. To the best of my knowledge, though, no one has taken an independent look at women’s organizations.

This isn’t intended to fault Giving Compass, which is a step in the right direction. And I’m aware that the Hewlett Foundation spent about $12m between 2006 and 2014 on its Nonprofit Marketplace Initiative, which, among other things, supported organizations to evaluate charities; the program was shut down, amidst disagreement about whether it worked. (I’d argue that GiveWell alone has delivered a big payoff on Hewlett’s investment.) To its credit, Hewlett continues to invest in effective philanthropy.

But Giving Compass, to stretch a metaphor, needs to be able to point people to good information. Generating and presenting that information may be too big a job for any one foundation, except, perhaps, for the Gates Foundation. But it’s a job that can and should be done, in my view. If Animal Charity Evaluators can research the most effective ways to help animals, on a small budget [See my 2015 post, What if the most good you can do is to help animals?], it should be possible create and fund organizations to identify the most effective nonprofits working on environmental issues, K-12 education or human services. Community foundations could take on the role of evaluating local charities, and making their findings public; right now, they do very little of that. And, of course, big foundations will have to share what they know; they’re not good at that.

It won’t be easy, but the stakes are high. If even 5 or 10 percent of that $390bn in annual giving by Americans could be redirected to the best charities, the impact would be huge. Even better, as more people give based on evidence, nonprofits will have to respond to donors by getting better at what they do. Kudos to Raikes and Gates for taking this on; let’s hope they are soon joined by others.

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