As for me, I can see the point of the author, yet I do understand why such charities asking for donations instead of having any skilled labor, as you mentioned. In reality, Charities cant be called charity if it doesnt give rise to its real societal responsibilty, although they are not obliged to do such thing. My point is, yes, humans are humans,it’s a normal way to act such, but for goodness sake, we may ask them of the things that bothers us,instead of accusing them the things that we thought.

• The charity has achieved success in the past.
• The charity’s future plans sound credible given what it’s accomplished in the past.
• The charity has demonstrated an ability to document how its work is going, such that we expect eventually to find out how its future projects go.

In order to assess these points, one must know what the charity’s future plans are, unless it has succeeded at such a broad range of activities that one would bet on whatever they do next.

In contrast to this approach, I believe it is common for donors to give to a charity not based on confidence in the organization as a whole, but based on an attraction to a particular program that their funds may not end up contributing to at all.

Jeff, we are addressing your question in followup posts on this topic.

This is a real and serious concern, as when a charity’s programs become known as proven to be effective, the charity will be overloaded with donations, such that it can’t scale the proven program and instead spends the donations on other, unproven ones.

As you point out, this is not necessarily an issue in organizations with a track record of good ideas, reasonable execution, and flawless evaluation. But I would wager that such organizations are even rarer than organizations which can prove the impact of existing activities. Indeed, I’m not even sure the former organization exists at all.

By the way, this is also one of my largest (yet unresolved) concerns about VillageReach. They’re really good at running vaccination programs in Mozambique, and at documenting their success. But at least with small donations, that’s not where the organization is going to scale. Instead, they’re going to focus on researching vaccination programs in other countries altogether. That could have a dramatic impact, but it’s risky, as VillageReach doesn’t really have a track record of addressing vaccination issues beyond its single stunning success.

Cheers,

–Ian

I’m a huge supporter of doing due diligence before donating to a nonprofit (our socialmarkets site is also in that biz) but this issue speaks to the larger question looming over the whole charity evaluation space: is there a limit to asking nonprofits to prove they are worthy of our support?

Past performance really is a good indicator of the future, so asking charities to measure and publish their impacts is a no-brainer. But on the “room for more $$” issue, I’m not sure we have good questions, or would know what to do with the answers.

I think a good place to start is by mining the rich history of failure - examples where more funding produced less impact. Hindight really can be 20-20, and a checklist of things to watch out for could be helpful.

The charities themselves are the best (if understandably reluctant) source for such “failure” scenarious, but Foundations would also have valubale insights. They are the heaviest hitters on the donor side, and often have long, detailed histories with the nonprofits they support… so plenty of skeletons in those closets.

On a practical level, knowing what we don’t know about this issue, what can we reasonably ask of nonprofits now?

What if I find a high performance charity that has a signature program that is highly effective and I give them unrestricted funding that is used on the next program idea that charity has? And that program idea is new and therefore has unknown impact, or was experimental and was a failure. Maybe even the next 10 program ideas after the initial success are failures?

I agree that charities should have an idea of program impact and that should be available to donors. But I hope your rating methodology enables you to recommend institutions with a track record of experimentation and innovation.

Thank you for this post. I regularly rant to friends and colleagues here in Kenya about this issue. The real question revolves around the transparent management of funding. I am not saying this to infer that the majority of organizations are doing anything improper with their funding but many of them are undertaking activities outside their core mission statements and expertise. It is one of the reasons the aid world has exploded with thousands of local and international NGOs that I can’t really justify and doubt they can either except they don’t want to lose donations being given. The aid world should be held to the same standards as any other large corporation meaning their donors or shareholders should ask for more transparent, financial reporting.