Monday, November 05, 2007

Smart Philanthropy: A Good Nonprofit Should...

As I mentioned in my ‘recent reading’ list I have been enjoying a series of books called ‘The Million Dollar Mysteries.’ In many ways they are typical fare for Harvest House (the publisher): part mystery, part romance, part evangelistic tract – with the corpse, the kiss, the conflict, and the gospel presentation falling in the appropriate places. But rather well done, for all that. And I find the premise rather interesting and creative.

Our heroine, a former private investigator, works for a well-funded charitable foundation. It’s her job to check out the charities her foundation is interested in supporting to make sure they are on the up-and-up. She interviews the staff and board members, reads all their literature, get the financial reports, and digs pretty deep. Often she finds areas of weaknesses and makes her foundation’s gift conditional on making certain changes to tighten up certain aspects of the way they run their organization.

Here’s what she looks for. A good nonprofit should meet the following criteria:

  1. It should serve a worthwhile cause.
  2. It should adequately fulfill its mission statement, showing fruits for its labors.
  3. It should plan and spend wisely.
  4. It should pay salaries and benefits on a par with [not exceeding] nonprofit industry standards.
  5. It should follow standards of responsible and ethical fundraising.
  6. It should have an independent board that accepts responsibility for activities.
  7. It should be well-rated by outside reporting sources.
  8. It should have a good reputation among its peers.
  9. It should believe in full financial disclosure.
  10. It should have its books audited annually by an independent auditor and receive a clean audit opinion.

I wrote the author, wondering where she had gotten the idea for this aspect of the series. Had she worked in the nonprofit world, or for a foundation? Maybe she had some bad experiences... I wondered where she got her list. Was there some objective source out there that I could go to understand my own ministry – and those I support – better, and get some objective input on how they measure up on these criteria?

She was a bit swamped and didn’t have time to talk but I expect to hear from her within a few weeks. She said yes, she has been burned by non-profits, and she wishes there were people doing what she describes (instead of giving their money without checking or running their organizations at lower standards).

I think she’s right; most of us give without asking many hard questions about what it is we are supporting. I know some foundations have lengthy and exacting processes for making decisions about the disbursement of funds, but I think they tend to emphasize the alignment of the charity with the foundations’ goals and values, as demonstrated by the grant proposals. Is that true? What about a really big foundation, like the Gates Foundation, would they ever hire an investigator? It sure seems like a good idea.

Giving Circles

A few months ago I read an article in an airline magazine about ‘giving circles,’ – like investment clubs but designed to help members pool their charitable giving to support causes or values they share. I’ve been thinking about the idea of finding or starting one. I do try to be pretty deliberate in my giving, and have served on mission committees at my church that have to develop and implement standards for support. I wonder what it would be like to take evaluation and intentional giving to the next level.

I still hope to talk to Mindy Starns Clark – the author – but may also see if I can get some input from one of the people I know on one side or the other of what mission agencies call ‘development’ – major fundraising. Find out how they think about these things.

In terms of my own giving, most of it goes overseas – and I want to keep it that way. But I could use some direction in how to put my money to better use in helping vulnerable people my own city as well. I know there are a number of nonprofits serving the people of Littleton, Englewood, and South Denver – feeding the hungry, welcoming refugees and immigrants, helping troubled kids, teaching people how to read, and so on. I’ve never done much about it. Frankly, I feel a little guilty about writing a check rather than volunteering my time. Yet I do neither.

I’ve got a hunch I could find 10-20 local families interested in joining me in pooling $500 a year or so, each, to set up a small foundation that would accept grant proposals and research local ministry organizations to see how our money could make a difference.

What do you think about this idea?


Paul Merrill said...

This is such a tricky area. Having lived in "the developing world" where the physical needs are so great leads me to be critical of much of the west's efforts.

And inner city America's needs are so small compared to Africa's. The USA provides a lot of safety nets for the down-and-out that just are not part of the picture in Africa.

But I think we need to be involved in a both/and sense, rather than an either/or sense. Easier said than done!!

For a good example of a cause in Africa that I'd give to, see heatheronthenet dot com.

Marti Smith said...

Well, yes, I know: I think there are probably lots of people around who think, 'why should we give to Africa, when there are so many needs right here?' with very little sense of scale. As I said, I want to keep more of my money going overseas, and that's why.

Yesterday I heard about a local (well, sort of a national franchise, I think) ministry that networks resources to meet needs in the name of Christ. It's called "Love INC' - Love in the name of Christ. Also heard that there are 1200 homeless people in and around Littleton. Well, yeah, I know some of these homeless people may be significantly better off than someone in East Africa who DOES have a home - and there's that matter of scale - but I'd still like to see what I can do to make a difference for them.