This seems like a good time to spell out my vision for how the nonprofit sector would ideally work (i.e., where we’re trying to help it get). This is important because a lot of people seem to think that we have a “hyperintellectual” idea of charity, and are hoping that all donors will eventually become charity nerds just like us – throwing emotion to the winds, and madly doing research before every donation. That isn’t the case. What I do picture is a world in which every tactical giving decision is publicly explained, and those who wish to can challenge it.
Part of every giving decision is an expression of personal values that will never be reconciled to others’. But when donors give, they aren’t just making these decisions – they’re also deciding on who can best accomplish their ends and how. They have to simultaneously figure out whether to improve education or fight disease (philosophical), whether to promote extracurricular activities or charter schools (tactical), and who runs the best charter schools (also tactical). That’s a lot to ask at once for someone who just wants to do their part in making the world a better place, and call it a Christmas.
Donors currently deal with this problem in one of two ways. Casual donors write a check essentially at random – usually by being passive and donating to whoever proactively reaches them. Serious donors may start to try figuring things out – but they have to start from scratch every time, since neither charities nor foundations publish thorough information on what works and what doesn’t (as we discuss at length in our business plan). And even serious donors don’t have time to really do all the necessary due diligence. It’s a full-time job, as we’ve discovered.
We aren’t trying to turn casual donors into serious donors, or serious donors into full-time program officers – we just want the three groups to help each other. To facilitate this, I picture a set of what I’ll call clear funds: organizations that pool money, make extremely large and extremely well-researched grants, and publicly publish everything they do. Different clear funds focus on different causes: ours will always be humanitarian-centric, but I hope to see not only direct competitors but also clear funds that focus on particular regions, religions, diseases, you name it. True charity nerds work for grantmakers, as they do now; serious donors pore over the different clear funds and carefully choose the best ones; and casual donors leverage serious donors’ opinions and comments to quickly pick good clear funds that line up with their values.
In this setup, everyone is putting in the amount of time they have to give – and using it in a way that is reasonable and realistic. Serious donors can’t reasonably evaluate charities – they can’t do that much due diligence – but they can read what clear funds come up with, and evaluate those clear funds’ ability to reason logically, explain themselves well, and (eventually) pick grantees that are able to get things done. And once they do, their opinions become worth something. Then, we can build all the great social networking tools in the world to help donors aggregate their opinions, find the recommendations of people who think like them, etc. Then, and only then, will personal recommendations and big-name endorsements indicate something other than flashy fundraising.
And what happens to personal choice under this scenario? Absolutely nothing. Donors still choose the causes that are most meaningful to them, which is the decision that was most personal in the first place; they leave the lower-level decisions to professionals, although those professionals remain accountable and criticizable by anyone who wants to poke around (a key missing piece now, as foundations don’t share anything that goes into their decisions).
Donors still support the causes that matter the most to them. Donors still use personal recommendations and referrals as essential parts of their decision-making. What’s new is that the final grants are far more concentrated, and far more carefully allocated; meanwhile, a debate rages in public that involves all of the world’s most interested minds. We don’t go from emotional to intellectual, but we go from throwing money at the world’s problems to putting our collective minds together – dividing up the labor by who has how much time – and solving them. That’s a huge change, and it isn’t one that has to take centuries. We have started the world’s first clear fund; here’s hoping others join us.