Charitable Giving: From the Heart or the Mind? Discuss.

Marc Gunther and I had never met until about 10 days ago, when we found ourselves at the same meeting in Boston. But we’ve been long-distance pals for a while. We found one another on Twitter, we’ve talked by phone on a few occasions, and we’ve exchanged emails. Marc spent four decades as a reporter covering politics, media, and business before starting to write about philanthropy and nonprofits in 2015. As you probably know, I worked for three decades in the nonprofit world before starting my own consulting practice in 2012.

Marc and I share common values. But when I posted my article, “Affairs of the Heart,” in February, Marc had what my Aunt Hilda would have called “a conniption fit.” Marc disagreed strongly with my assertion that people generally give from the heart — and that that’s totally fine with me. In his riposte, Marc rubbed salt in my wound by suggesting — egad! — that donor-advised funds could help donors be more thoughtful and effective.

Being reasonable men, Marc and I entered into a dialogue on the subject. He went first:

Marc: What got us going, Al, was a blog post where you wrote: “I give from my heart – and my observation is that most other donors do the same thing. There’s absolutely nothing wrong with that.” You’re right that most donors give from the heart. But there’s a lot wrong with that. It’s one reason why we have so many ineffective and inefficient charities. Nonprofits don’t have a financial incentive to measure and report on their impact because donors don’t take the time to try to figure out which nonprofits are really making a difference. It’s odd: Many of us set aside time to research our investments and plan our vacations. We look for reviews and ratings before going to a movie or restaurant. Shouldn’t we be as thoughtful and intentional when giving to charity?

Al: Well, Marc, first, let’s not belittle the role of emotion in making important decisions. The most important decision of my life was getting married to Pat, and I didn’t sit back and do research and analysis before falling in love. (By the way, 35 years later, and we’re doing great.) People connect emotionally with charitable organizations, too — and they develop bonds with their leaders. There’s truly is nothing wrong with that — and it drives vastly more charitable giving (generally, a good thing) than intellectual dissection of financial statements and impact measures.

But second, I’m highly skeptical of nonprofit reviews and ratings. The best-known evaluation outfits, Charity Navigator and Charity Watch, work from offices half a continent away from the organizations they’re judging. They pull information from the charities’ Form 990s, draw conclusions about their efficiency and effectiveness, and slap on a rating — three stars, B-, whatever. (I wrote about this a while back in The Chronicle of Philanthropy.) You have to realize, Marc, that it’s frighteningly easy to game the 990s and make your organization look more efficient than it is. These evaluators presume, too, that spending on “overhead” — administration, fundraising, finance — is by definition bad, and spending on “program” — the direct costs of service delivery — is good. That’s a wildly over-simplistic and dated model for judging nonprofit effectiveness. And, finally, whenever evaluators get into measuring actual program impact, they find that it’s nearly impossible, so they fall back on painful jargon about “theories of change” and “logic models” that frankly make my teeth hurt, and that mean virtually nothing in the real world.

Marc: OK, we agree on a few things: First, I, too, didn’t rely on metrics when I got married. That worked out fine: Karen & I have been together for 37 years.

We can also agree that ratings from the likes of Charity Navigator and GuideStar have very limited value. They help screen out wasteful or fraudulent charities but they do not measure impact. So long as they try to evaluate hundreds or thousands of nonprofits, it will be all but impossible for them to do so. To their credit, they have been trying to bury the overhead myth for years. But without anything to put in its place, that’s hard. One of my first posts for this blog was headlined Evaluating nonprofits: If not overhead, then what? There’s no clear answer yet.

Finally, we can agree that the decision to help others is an emotional. My heart tells me to give. But it can’t tell me where or how to give and, as someone who identifies, more or less, as an effective altruist, I want to do as much good as I can with my money. To figure out how, I set aside my emotions and use my brain.

Can we also agree, as the Gates Foundation likes to say, that all lives have equal value? If so, we should help the world’s poorest people, whose needs are greatest. To that end, most of my own giving is guided by GiveWell, which seeks out the best giving opportunities.

Al: Well, first of all, let’s hear it for long and happy marriages!

I respect GiveWell, Marc. They really do find the biggest bang for the buck in terms of saving lives. I get that, and the charities they recommend do remarkable work and save thousands of lives, mostly in sub-Saharan Africa. I can’t knock your following their advice.

That said, GiveWell has a list of only nine charities in the whole world on their top recommendation list, plus another 20 or so that they find worthy and cost-effective. In terms of saving the most lives for the penny, I think that’s a great list. But the focus is incredibly narrow. If you want to support anything helping people with low incomes in the US, you’re out of luck. (I’ll remind you that we have some 43 million “food insecure” people in this country. Sending money to an American food bank or free health clinic may not save as many lives per dollar as in the developing world, but it still supports people who need help.) And GiveWell’s list does not deal with environmental organizations, including those that are fighting climate change, a force that is disproportionately affecting the very people GiveWell wants to help. And I have to say that arts and education are worthy charities, too — what’s the world without beauty and intellectual engagement? Are those kinds of causes off limits because they’re not purely about saving lives?

Marc: I’m with you, sort of, on climate change. I used to make the bulk of my donations to environmental groups, but stopped because (1) they aren’t making much headway on the climate crisis and (2) most won’t embrace the world’s No. 1 source of low-carbon power, i.e., nuclear energy. As for education, if I knew of a nonprofit with a great track record of helping poor kids succeed, I’d consider donating. Do you have any recommendations?

You lost me at the arts, though. Given a choice between saving the art in the National Gallery or the people who visit the museum, I’d have to choose the people; the reality is that money we donate to the arts, or most anything else, instead of giving to alleviate poverty or disease means letting people suffer.

I wish we had the equivalent of a GiveWell for important causes like the environment and education, as well as localized ratings for cities or communities around the US. You used to work at a community foundation, Al. Could they take on the role of vetting and recommending the best nonprofits in their cities or regions?

What I really want to see is what some have called a “market for good”– a way to reward the best nonprofits, penalize the worst and ignore the rest. But first we need to know which is which.

Al: I think your big-city bias is showing, Marc. I live in a small city, Concord, New Hampshire (population about 45,000), not Washington or New York. When I say “the arts,” I don’t think about the National Gallery or Lincoln Center. I think about the Concord Community Music School, which teaches the joy of music (and a sense of community) to kids, adults, seniors, immigrants, children with disabilities, many of them with no money and at no cost. Or I think of Oklahoma Humanities, a group I’ve worked with, which leads book discussion groups in state prisons. These are “arts” groups, but giving to them is not gilding the lily at some major museum catering to rich people.

As for giving to education, donating to Harvard or Stanford is about the most inefficient form of charity imaginable, and it reaches beneficiaries who generally don’t need it. (Malcolm Gladwell skewers giving to the richest universities brilliantly in his podcast, “My Little Hundred Million.”) But giving to schools that serve working-class kids, especially if the money is spent on direct service and not hoarded in endowments, can be a very wise use of funds. So don’t dismiss giving to the arts and education out of hand. You should think about institution itself, the people it serves, and how the money will be used.

Two last thoughts:

First, you have asked me about how you can know about an organization’s quality and impact. Well, to quote Yogi Berra, “You can observe a lot by watching.” And by asking people who benefit from the work. In my original post that set you off, I talked about my respect for a group working on children’s literacy. Yes, I’m fond of the leader. I trust him. But I also have heard great things about their work, not simply from their staff and from their materials, but from other organizations in the community serving kids from families with low incomes. One of the groups is a very gritty Boys and Girls Club that I know does great work, and the literacy group I highlighted collaborates with them — and the kids there simply love them. So too a program for kids at high risk where I’ve been a board member: the literacy group comes to their summer camp, and it’s one of the best days of the year. You may dismiss these efforts, because they don’t literally save lives, and a dollar spent on a book for a kid in New England would undoubtedly go further in helping prevent malaria in Africa. I get that. But my heart and, yes, my mind tells me that a group helping kids who have never really interacted with books to love reading is a great thing that’s worthy of my support.

Having delivered the de rigueur quote from Yogi Berra, I’ll close by quoting sociologist William Bruce Cameron: “Not everything that can be counted counts, and not everything that counts can be counted.” We’ve learned from the obsession with test scores in public schools over the last two decades that focusing too much on measurable outcomes actually distorts and spoils the mission — and inspires cheating, too. And there’s a reason some of the best nonprofits don’t do a very good job of evaluating themselves and communicating their impact. It’s because they’re busy delivering programming. They’re counseling vets, feeding the hungry, sheltering the homeless, and, yes, teaching art to kids. Some of the most effective organizations I know don’t do nearly as good a job at blowing their own horns and accounting for their achievements as some other groups that, frankly, aren’t all that great at meeting mission.

Marc: Some great points, Al. I agree that local charities do good and important work in education and the arts. The trouble is, it’s hard for many donors to identify them. One approach might be to set aside a share of giving for groups that work nearby – and give them time as well, if possible – and then devote the rest to helping those whose needs are most pressing. No doubt we should give from the heart, but I hope more people will use their heads as well. And thank you for using both!

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8 Comments. Leave new

It’s a draw! You both make great points. What might be missing, with regard to what motivates people to give and to whom, is simple enough. My wife and I give money (that we incidentally worked for and earned over a lifetime) to things that matter to us. We could give money to things that matter to Al Cantor or Marc Gunther, or Bill Gates or The Pope for that matter. But that is not our choice.

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If all people followed Marc’s philanthropic strategy, 29 nonprofits in the world would solve a few problems, and everything else would disappear.

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Steve Varnum
March 27, 2018 5:57 pm

Big thanks to both of you. Love the discussion, love the format, and wishing that some brilliant someone figures out how to measure nonprofits’ impact. Whether we give to eradicate poverty, reverse environmental degradation, lift people’s spirits through the arts, or rescue animals, most of us want the most bang for our bucks.

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Thank you both for your insight and passion for impacting the lives of those in need. I recently retired from my career at the Boys & Girls Club of Manchester, NH…a 42 year blessing of a lifetime. This longevity, and that of so many of my colleagues, has provided us a unique opportunity to see the cumulative effect that love, nurturing and role modeling can have on a child’s path in life. We have grown with thousands of kids over the decades…. Some blessed with every opportunity a child needs to thrive, some with struggles no child should endure through their developing years. You could find countless surveys, studies and data to quantify the impact of our programs and services. However, the best way to guarantee your philanthropy is hitting its mark is to visit the Club when our kids are present. Talk to community and business leaders who grew up at a Club. Ask them if the Club made a difference in their lives….and their children’s lives. Whether you choose to impact a need locally or globally, it is always helpful to “walk through the doors” and learn from the beneficiaries. Thanks.

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John Molinaro
March 28, 2018 9:09 pm

In reading this it was clear to me that Marc gives where his heart leads him – to help the poorest of the poor, and Al uses his head to evaluate – through direct observation – which charities to support among those whose issues are close to his heart. As with all effective charitable giving it’s not an either/or, it is both/and.

Ultimately our motivation to give is driven by our heart – by our burning desire to see better outcomes for the specific issues and concerns that drive our charitable impulses. Once the direction is set by our heart, the challenge is how to choose an effective use of our limited resources among the myriad of charitable options available.

The methods we use to do this must vary given the direction our heart takes us. Unless he is fabulously wealthy, it is unlikely Marc could afford to use direct observation to choose the charities most effective in saving lives across the poorest regions of our world. Fortunately, GiveWell provides him with an excellent resource to help inform his giving choices. Al’s passion drives him to support grassroots groups operating at the local level. A GiveWell-type organization could never afford to evaluate groups operating at such a small scale. However, since they are small and local, they are ideal candidates for Al himself to evaluate through direct observation.

One of the outstanding characteristics of humanity is the near-universal impulse to give some of our time and resources to help those that are less fortunate than we are. There’s lots of great research that shows that the less one has the more likely one is to share with someone in need. That giving is fueled by the passion and compassion of seven-billion hearts with seven-billion different perspectives.

This drives the proliferation of charitable efforts across our world. Where enough of those hearts focus on the same issue, a GiveWell-like evaluation program makes sense and is likely the best way to choose among myriad options. Where that is not feasible, other approaches, like Al’s direct-observation, can be equally effective.

The important distinction here is not between giving from the heart and evaluating your giving. It is between informed giving and uninformed giving. Marc and Al are both informed givers. They take the time to use methods appropriate to the issue and organizations under consideration to decide where they can have impact with the dollars they give. I think that both might agree that the only wasteful gift is an uninformed gift – one that, with just a little extra effort, could be redirected to achieve far better results.

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Ron Boufford
March 29, 2018 8:54 pm

We will all have a good idea of what motivates people to give on April 15, 2019. More than a few charities and non-profits are suffering a bit of anxiety waiting for the impact of the new lower tax rates.

Some points that would assist givers in evaluating charities are more openness. The annual publishing of each charities and non-profits top five salaries and perks would help. (why are charities and non-profits so secretive about these numbers? Government employees, politicians and public companies numbers are published annually). Other data that would help evaluate these organizations include the % of income that is spent on fund raising, salaries, perks, and the like, and the % that is used for the cause that is represented.

More givers would be motivated to give more if there were less secrecy on the part of the agencies soliciting funds.

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