About Bob Bob serves as President and CEO of GuideStar and serves on the boards of Vision TV, Grameen Foundation USA, and the AAFRC Trust for Philanthropy. More...
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Posted on January 20th, 2010, in these categories: Disaster Relief | Giving Wisely
I just read an excellent post on Tactical Philanthropy. In it, Sean Stannard-Stockton looks at responses to previous disasters and encourages donors to take those lessons into account when giving to relief efforts in Haiti.
We at GuideStar agree completely. In fact, during the Katrina crisis we began reminding reporters and donors that the problems of New Orleans existed long before the hurricane, and that taking your time with a wise giving decision was better than a rushed donation to an ineffective organization. Since the Haiti crisis broke, we have been telling donors much the same, and to consider long-term as well as short-term giving. As I noted last week, "‘Disaster relief’ is a long-term process, as we’ve seen in the aftermath of the December 26, 2004, tsunamis and Hurricanes Katrina and Rita."
Another issue is restricted versus unrestricted gifts. We recommend that in times of disaster a donor consider giving to a well-experienced organization’s general disaster-relief fund, rather than earmarking the gift for Haiti. Remember that relief organizations can’t wait until donations start coming in to respond to a disaster—they have to get to the scene as quickly as possible. By giving to a general relief fund, you give the organization the ability to use your donation where and when it is most needed. Perhaps that will be in Haiti today. Perhaps it will be at some other location in the future. But your gift to a nonprofit’s general relief fund will make a difference.
Posted on January 13th, 2010, in these categories: Disaster Relief | Giving Wisely
Last night a powerful earthquake shook Haiti and devastated much of that impoverished island nation’s capital, Port-au-Prince. It goes without saying that our thoughts and prayers are with everyone who has been affected by this disaster.
As always, donors in this country have been quick to offer their help. Here’s how you can give wisely to relief efforts in Haiti:
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Be pro-active, not re-active.
It’s not necessary or wise to respond to every call or request. Instead, follow the steps below to give wisely.
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Determine what kind of relief you want to support.
What are your values and priorities? What matters to you? "Disaster relief" has many faces—emergency housing, provision of potable water, medical assistance, feeding the hungry, sending in search and rescue teams. Decide which one(s) you want to give to.
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Do a little research.
Use a reputable source, such as GuideStar, or one of our partners, such as Network for Good or JustGive, to identify charities doing the work you want to support. All of the charities listed on these sites are legitimate organizations recognized by the IRS, and you can contribute directly from the sites.
If you already have an organization in mind and are familiar with its Web site, you can do your research there. Be careful, however, if you haven’t been to the site before or don’t know the organization well. Con artists often post bogus Web sites and run scam donation campaigns immediately after a disaster. If you aren’t already familiar with a relief organization’s site, protect yourself by linking to it from a trusted site such as GuideStar, Network for Good, or JustGive. Avoid new Web sites and links provided in e-mails.
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Ask questions.
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Does the charity have experience working in disaster relief and in particular Haiti?
Time is of the essence—lives are at risk, so you want to give to organizations that have the ability to get relief where it needs to go quickly and efficiently.
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How does the charity describe its mission and programs? Its accomplishments?
Do the programs support the mission? Does the charity use concrete measurements to evaluate its accomplishments?
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How do people who have firsthand experience with the charity evaluate its services?
Check GuideStar or our partner GreatNonprofits for reviews.
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Consider making another gift in a few weeks or months.
"Disaster relief" is a long-term process, as we’ve seen in the aftermath of the December 26, 2004, tsunamis and Hurricanes Katrina and Rita.
My colleagues and I hope that these tips will help donors give wisely as well as generously.
Posted on January 8th, 2010, in these categories: Donors | Health Care | Nonprofit Practice | Public Policy
One of the joys of living in the Washington area is that while watching the news on television, we get to see the strangest advertisements urging Congress to do such-and-such sponsored by some supposedly high-minded, publicly spirited organization. I always think to myself, who are these people and where is their money coming from? Maybe it’s my cynical side coming out, but I usually assume that behind the scenes there are a bunch of organizations fighting over market share and a pile of money.
Most discussions about the nonprofit sector usually focus on the needs of traditional donors, whether they are individuals or professionals, and charities that are providing public services.
But there are thousands of nonprofit organizations that are organized to serve very narrow subjects. One of my pet peeves, for example, are the nonprofits organized by elected officials, a subject that I think doesn’t get nearly enough attention. Some of these charities do terrific work, but many serve little purpose other than to attract donations which ultimately serve only the interest of the elected official.
I’m not talking about advocacy groups per se. I support the right of 501(c)(3) nonprofit organizations to advocate for their points of view and the passage of legislation to benefit their cause, within the guidelines of the IRS. We all need to be ever vigilant so that our rights aren’t watered down. We also have the 501(c)(4) category for those nonprofit organizations that want to undertake major, sustained lobbying efforts.
No, what I’m speaking about are those nonprofits where the funding source is nebulous, executives are overlapping, the activities are unclear, and—worst of all—the names of the organizations are misleading. I think these types of nonprofits breed public mistrust and have a negative effect on charitable giving in general.
The Washington Post had a front-page story yesterday looking at organizations lobbying for changes in health care titled "How interest groups behind health-care legislation are financed is often unclear." The first two paragraphs of the piece lay out the premise:
Many of the Washington interest groups that are seeking to shape final health-care legislation in the coming weeks operate with opaque financing, often receiving hidden support from insurers, drugmakers or unions.
The groups, some newly formed and others reappearing with different sponsors, have spent months staging noisy protests, organizing letter-writing campaigns and contributing to a record $200 million advertising blitz on health-care reform.
I asked Chuck McLean, GuideStar’s V.P. of research, and his assistant, Carol Brouwer, to dig into the GuideStar database to see what we could learn about the organizations mentioned in today’s article. They found that most of them are either charitable—501(c)(3)—or lobbying—501(c)(4)—organizations and in the GuideStar database. But the 990s and other tax documents available from the IRS don’t really tell you very much about the funding sources of these organizations. This is an obvious case where going beyond the IRS data is absolutely essential.
These organizations are not required to disclose to the public the sources of the contributions they receive. So if the fictional Society for Compassionate Care for the Elderly is a nonprofit that is lobbying for the Congress to pay for nursing home care for any senior who needs it, we have no idea if the money that pays for the lobbying comes from thousands of concerned individuals or from the business interests that stand to make a fortune if the lobbying efforts are successful. It isn’t clear to me that anonymity of donors is fair to us in instances like these. What do you think?
Posted on January 4th, 2010, in these categories: General | Nonprofit Practice
Bill Clinton’s charitable foundation released a list of donors to the foundation on January 1. The list was made public as part of an agreement with the Obama administration when Hillary Rodham Clinton was appointed secretary of state in order to prevent the appearance of conflicts of interest. (You can learn more about the foundation in the GuideStar database.)
The list indicates whether donors gave money in 2009 but only details the total of their giving since the charity began raising money in 1998, so it’s not possible to determine how much each donor gave in 2009 alone. According to the New York Times, since the Clinton Foundation’s creation in 1997, more than 160,000 people have contributed to it, with more than 11,000 individuals giving for the first time last year. More than 90 percent of the foundation’s donations last year were valued at $250 or less.
So who’s on the list? Well, foreign governments continue to be big donors. The list includes Norway, which has given between $10 million and $25 million over the past several years, and Oman, whose donations have totaled between $1 million and $5 million. But some foreign governments that had been multi-million-dollar donors in the past, including Saudi Arabia, Dubai, Kuwait, and Qatar, did not give in 2009.
Among the top donors is the Bill and Melinda Gates Foundation, which gave more than $25 million. (You can also see the Gates Foundation’s report on GuideStar.)
According to its Web site (www.clintonfoundation.org), the Clinton Foundation finances charitable programs in climate change, global health, poverty, and education. It also hosts the annual Clinton Global Initiative, which brings together philanthropists, corporate chiefs, government officials, and nonprofit leaders to find charitable solutions to worldwide problems.
I was uncomfortable about the former president’s fundraising for his foundation when Hillary Clinton was first proposed as secretary of state. There seemed to be considerable potential for conflict with a former powerful and influential president raising money from foreign governments while his spouse serves as secretary of state. So far it doesn’t seem to have been a problem. As far as we know.
On a positive note, we often talk about foundations’ power to leverage and convene. No one is in a better position to do this than Bill Clinton. He seems to be unmatched in his ability to connect people and cobble together funding. In fact, I like the fact Clinton needs to raise his money rather than work off a large endowment. Don’t you think that model requires his foundation to be able to demonstrate that they are an efficient user of donor money and, more important, that they can measure effectiveness and impact? What if every foundation were required to do this before it could dip into its endowment?
Posted on December 31st, 2009, in these categories: General | Giving Wisely
I just finished reading Being Generous by Dr. Ted Malloch. It’s a neat little book and especially relevant as we make our last charitable giving decisions for 2009.
I’m going to devote much of this post to quoting (with permission) from a post by my friend Dennis Whittle of Global Giving, which he wrote for the Huffington Post last month:
What makes [this book] especially powerful is [Malloch's] description of his own journey from self-described narcissism to compassion: "It never came easy. I have always had a "meritocratic" outlook. That is … you get what you earn, what you deserve. … I found it hard—often very hard—to give what I had earned away."
Being Generous weaves personal narrative with a brief description of the injunction to generosity in Christianity, Judaism, Islam, Hinduism, Buddhism, Native American and Aboriginal spiritualism, Confucianism, and secularism. Malloch then weaves in stories about an exceptional mosaic of givers, both big and small, well-known and obscure.
The diversity of personalities, viewpoints, and displays of generosity is arresting, and makes it clear that religion is not the sole motivator of generosity. The vignettes range from Henry Ford, Bill Gates, Oprah Winfrey, Jeff Skoll, and John Templeton to surprising stories about figures such as Johann Sebastian Bach and Felix Mendelssohn. Malloch also highlights many lesser known and smaller donors, including six donors to projects on GlobalGiving (to which royalties from of the book are being donated).
In a previous post, I argued that passion is essential for a successful nonprofit and needs to be part of our giving decisions. One might conclude that from Malloch’s perspective, generosity is the most important motivation, suggesting that compassion and a sense of obligation are what drives our giving. But Malloch ends his book by saying that generosity also requires giving time and energy: "The time needed to follow things through and the energy needed to convey your gift into the hands of the ones whom you wish to help." He urges donors to get personally involved in the nonprofits they support. In many cases that may be the right thing to do. But however one does it, generosity—just like passion—is best served with some careful due diligence and high expectations about organizational effectiveness.
Posted on December 28th, 2009, in these categories: General
Back from a few days of travel with my family and an opportunity for a little rest, relaxation, and reflection. Now it’s back to digging out from last week and thinking about the year to come.
I’ve always resisted making formal New Year’s resolutions. It feels artificial and confining to me—too much like those who lurch from one diet to another or buy a gym membership and never quite make it. Those kind of resolutions usually don’t last very long because they’re not truly connected to our real beliefs. On the other hand, I’m a strong believer in setting personal and organizational goals and striving to the best of my ability to reach them—not just at the beginning of the year.
Sometimes setting goals can leave us with a false sense of control. Or become all consuming. I got to thinking about setting goals a week or so ago, when David Brooks of the New York Times had a column about President Obama’s governing style. One of the things that caught my attention was the fact that Brooks thinks Obama has learned how to "embrace the complexity."
Mark Whitaker from NBC offers a slightly different perspective in a piece in today’s Washington Post, "Lessons from Obama’s First Year." He makes this interesting observation: "Given all the rejection and dislocation in his youth, is it any wonder Obama became so invested in imposing order on his adult life? … In President Obama’s case, the highly organized defenses he developed as a result of his dysfunctional childhood many have left him ill-prepared to confront the more unruly forces of cynicism, egotism and self interest that hold sway in Washington, on Wall Street and on the world stage." Governing, Whitaker asserts, isn’t about creating order. Instead, "it’s about learning to love the madness of governing before you can master it."
In another article in today’s Post, Robert Samuelson reflects on his 40 years in journalism and how much it has changed during his career. Today, he says, "journalism is a jumble. … ‘The marketplace of ideas’ often resembles a demolition derby—victory goes to the most aggressive."
He has the same thought about our society: "Democracy is a messy, often shortsighted, unreasoned and selfish process. People have interests, beliefs and prejudices that, once firmly entrenched, are not easily dislodged—and certainly not by logic or evidence." Further, "good information does not inexorably lead to good government." Samuelson quotes Henry Rosovsky on this point: "Never underestimate the difficulty of changing false beliefs by facts." Although "people do change their minds," Samuelson contends that "experience has more influence than argument."
So go ahead—set some goals. Trying hard is important and good for the character. We can all do better. I know I sure can. But don’t forget to love the madness of our world and embrace the complexity!
Posted on December 14th, 2009, in these categories: Uncategorized
Pardon me if I say something that doesn’t conform to the common wisdom we’ve been hearing lately about measuring effectiveness. It’s not that I object to this movement. GuideStar after all has been urging donors for more than ten years to give with your heart and your head. Our premise is that armed with GuideStar data, donors will make better and more confident decisions and nonprofits will be more efficient and effective. So I understand – and support – the encouragement for more analysis and evaluation. But I’ve been getting a little uncomfortable with the conversation that seems to suggest that all that matters is rigorous analysis managed by experts who know more than we do and are the only ones capable of measuring a project’s progress. Our approach at GuideStar assumes donors often want a variety before they make a decision. That’s why we are working with Great Nonprofits to add user reviews from donors, volunteers, and program recipients. And why we’re putting more focus on the GuideStar Exchange program to collect more data directly from nonprofits.
Last week my wife and I heard Greg Mortensen speak before a packed theater in Washington DC. Mortensen is the co-author of the best selling book Three Cups of Tea and author of a recently released new book called Stones for Schools. Mortensen grew up in Africa as the son of missionaries and after a brief time living in Montana found himself in Pakistan. Today because of his efforts hundreds of schools have been built primarily for young girls in Afghanistan and Pakistan, two countries historically opposed to secular education, particularly for girls. Mortensen’s recipe for success is simple: just do it. He told us that he is frequently asked to describe his strategic plan and he replies that he has no strategic plan. If you have a passion and feel strongly about an issue, he says, you need to do something about it. (By the way, his “no plan” line drew an enthusiastic round of applause from the audience.) Waiting for some one else to tackle an issue isn’t going to make it happen. As he put it: you can’t fight poverty from a think tank in Washington.
When Mortensen started out, he had no idea how to fundraise. He started by writing to over 500 celebrities and ended up raising a grand total of $100 – from NBC news anchor Tom Brokaw, who lived nearby in Montana. He shared a wise saying that’s worth remembering next time you’re feeling low: “when it is dark, you can see the stars.” But some young kids were touched by a talk he gave in a school and helped to raise 62,000 pennies – enough for him to build his first school. Today he supports a program called Pennies for Peace, where young people throughout the world get involved and raise money for his project and for other new nonprofits.
He also learned – after some false starts – to let go of the control of the projects and give more responsibility to the locals. As a result they became invested in the success of the schools and destruction of the schools by militants has been remarkably low.
My point? A successful nonprofit program usually starts with passion, and to be more pointed a passionate, driven leader. And passion usually trumps analytics and expert opinions. Could Mortensen be more successful, more efficient, more effective? Could we learn lessons about how to replicate his good work and scale it up? Probably. Even the American military is asking him for advice on how to deal with the locals in Afghanistan and Pakistan. When the analytic doctors come to town, however, and argue that only they can collect the data and make a proclamation about an organization’s effectiveness, I hope they’ll take a moment to think about the power of passion and the success of Greg Mortensen.
Posted on December 2nd, 2009, in these categories: Giving Wisely
I was happy to be part of a news release issued yesterday that dispels the myth of using ratios as the only valid way to evaluate a charity. For more than a decade, GuideStar has preached the mantra that judging a nonprofit’s effectiveness is based on how well that organization delivers on its mission and not by running overhead or other ratios based on Form 990 financials. It’s one of the most frequent issues I speak to reporters about.
As a pioneer in the field of nonprofit transparency, GuideStar has collected information well beyond financials from thousands of nonprofits. Our data collection tool has always included a section where organizations can elaborate on their missions, program activities, and annual outcomes. You might also be interested in checking out two of the many resources we make available on our site: "A Donor’s 10-Step Guide to Giving Wisely" and "Why Ratios Aren’t the Last Word."
Finally, this year, through a partnership with GreatNonprofits, we’ve added third-party reviews to our nonprofit report pages as another way to help donors evaluate how well a charity accomplishes its mission. Thousands of reviews are now available.
We are excited that others share our view, and I commend my colleagues who collaborated on this release for standing together to deliver this very important message.
Posted on December 1st, 2009, in these categories: Public Policy | Religion
There’s an interesting battle going on in local Washington, D.C., politics that could have national implications.
The D.C. Council is scheduled to vote today on a historic measure to legalize same-sex marriage in the District. The proposal has generated considerable opposition, but none more public and forceful than from leaders of the Catholic Church. Several weeks ago the church announced that if the legislation passes, it will terminate the $20 million or so in contracts that Catholic Charities has with the city for funding of homeless shelters, medical clinics, and other charitable enterprises that Catholic Charities operates because it believes the proposed legislation forces the Church to violate its teachings. According to the Washington Post, "Eleventh-hour talks were being held Monday to see whether the law’s wording could be tweaked to keep the Church from having to recognize same-sex marriages by, among other things, offering benefits to gay employees’ partners." The Post article suggests that this is an issue on a "collision course" between "religious liberties and civil rights."
But there is another collision course to be concerned about. Increasingly our society relies on nonprofit organizations to deliver desperately needed social services. Consider these three trends. One, for many years now, government agencies having been outsourcing much of the delivery of social services to nonprofit organizations. Two, we know from the Urban Institute’s analysis that government contracts for services is the single largest source of revenue for the nonprofit sector. And three, nonprofits with religious affiliations are increasingly providing social services and more often subsidized by government contracts.
I asked Chuck McLean, GuideStar’s VP of research, what we could learn from the GuideStar database. He noted that religious organizations are not required to file with the IRS so information is hard to come by, but he reports that about 120,000 religious organizations have voluntarily supplied information to GuideStar or the IRS, most of them social services, health services, or education organizations. This is less than 30 percent of the estimated 400,000 religious organizations in the United States, so it’s not really possible to draw any solid conclusions. It’s safe to say that religious organizations have long been a vital part of the charitable sector. Just think of all the universities and hospitals and homeless shelters in any major city run by religiously affiliated organizations. We couldn’t do without them. Other than the issue of abortion, which has had long running national and legal implications for religious insitutions, I can’t remember too many incidences like this one. Is the situation in Washington an anomaly or should we expect more of these collisions? And what does that mean for the future of the delivery of social services?
Posted on November 17th, 2009, in these categories: General
You can’t always tell a book by its cover. And you can’t always tell a nonprofit by its 990.
When I first saw the headlines Thursday in the Washington Post, I assumed it was another counter-terrorism story. The story reported that "federal prosecutors took steps Thursday to seize four U.S. mosques and a Fifth Avenue skyscraper … long suspected of being secretly controlled by the Iranian government."
But this was not just a typical terrorism story; it included a nonprofit and a foundation. "In what could prove to be one of the biggest counterterrorism seizures in U.S. history, prosecutors filed a civil complaint in federal court against the Alavi Foundation, seeking the forfeiture of more than $500 million in assets. The assets include bank accounts; Islamic centers consisting of schools and mosques in New York City, Maryland, California and Houston; more than 100 acres in Virginia; and a 36-story glass office tower in New York."
John D. Winter, a partner at Patterson Belknap Webb & Tyler in New York City and the Alavi Foundation’s lawyer, is quoted as saying that the foundation will fight the case.
The story reports that "prosecutors said the Alavi Foundation managed the office tower on behalf of the Iranian government and, working with a front company known as Assa Corp., illegally funneled millions in rental income to Iran’s state-owned Bank Melli. Bank Melli has been accused by a U.S. Treasury official of providing support for Iran’s nuclear program, and it is illegal in the United States to do business with the bank."
The U.S. has long suspected the foundation was an arm of the Iranian government; a 97-page complaint details involvement in foundation business by several top Iranian officials, including the deputy prime minister and ambassadors to the United Nations.
“For two decades, the Alavi Foundation’s affairs have been directed by various Iranian officials, including Iranian ambassadors to the United Nations, in violation of a series of American laws,” U.S. Attorney Preet Bharara is quoted as saying.
I asked Chuck McLean, GuideStar’s VP of research, to see what he could learn. "We have the 990-PFs going back to 2000 for the Alavi Foundation. I have reviewed their most recent filing. There is nothing apparently wrong on the return, and they retain a well-known and reputable law firm as general counsel. Their primary activity at the present time is making no-interest loans for the construction of mosques and religious schools."
The moral of the story? Nothing in the 990s pointed to the issues that the government has identified, and other previous government anti-terrorist charges have not always been supported in court, so this issue is far from resolved. Although an organization’s Form 990 can provide a wealth of information about its activities, it is more like a self-portrait than an x-ray. Truly understanding a nonprofit requires more information than the 990 can provide.
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