The Giving is Great website is a useful resource in its own right, its mission being to help donors find really effective charities that can’t afford to spend millions on marketing and make it easier for those charities to raise funds, but it also offers a number of ideas to help donors gain more satisfaction from their philanthropy and confidence that the causes they have selected are impactful.
Perhaps of greater interest to not-for-profits seeking grant funding, is its ‘Donor Grant Tracking‘ page, which analyses grants made by UK grant-makers who have donated more than £1,000,000 over the last 5 years.
Giving is Great’s ‘Top Tips’ to help philanthropists gain confidence in the causes they’ve selected to support provides a valuable insight into what donors may be looking for from charities:
1. Engage your brain, as well as your heart
You are unlikely to give away hard earned savings unless your heart is touched by a cause. But your experience will be much deeper if you can also satisfy yourself that the organisation is really effective. Most people struggle to do this, due to lack of time and experience. As a result they often rely on prejudices. We want the most effective charities to attract a bigger share of donations, rather than those with the biggest fund raising budgets.
2. Don’t compare overheads
It’s perfectly understandable to be worried about efficiency but comparing overheads between charities is often a misleading way of evaluating this. Charities can save money by cutting corners but in the longer run that will reduce impact. Evidence produced by Caroline Fiennes based on US charities indicates that there is actually a POSITIVE correlation between admin costs and effectiveness. Focus on the ability of the management team, then trust them to spend wisely.
3. Look at who else is supporting
In the UK we are fortunate to have many highly professional grant making charities. They are inundated with requests for funding, so they are able to pick and choose the best. Use our search tools to find the most supported charities. If you are asked to support a charity that has failed to attract any funding from these organisations, just ask: Why?
4. Early intervention pays dividends
In the long run it’s cheaper and more effective to build a fence at the top of a cliff than provide an ambulance when people fall over. Re-election priorities often discourage politicians from funding programmes that do not produce results before the next poll but that provides an opportunity for charities to take the long term approach by intervening early.
5. Look for Matched Giving opportunities
Matched giving happens when someone else promises to top up your donation so the value of your donation is increased. A great example is the Big Give Christmas Challenge. The UK Government also encourages matched giving through its UK Aid Match service. However, don’t let this sway you into backing a charity that doesn’t meet your criteria – the availability of matched giving does not mean that the charity is highly effective.
6. Donations go further in the developing world
For example in Africa:
o Less than 50p can provide a deworming treatment that will massively reduce the risk of a debilitating illness.
o Less than £50 can restore sight to a blind person.
o Less than £4,000 can save a life by providing mosquito nets, as well as improving life prospects for many others.
7. High profile disaster appeals rarely offer the best value
Tragic though these are, in the overall scale of human deprivation disasters are relatively minor. Every day, on average, more than 15,000 children aged under 5 die and most of these deaths are preventable. If you ARE tempted to support disaster appeals then first check out fts.unocha.org to see which are most in need of funding.
8. Where’s the evidence about impact?
It’s an appalling indictment of the Third Sector that few charities can tell you objectively what impact they are achieving. Not only does that make your donation feel less useful, it also makes it near impossible to manage the organisation. Ask for an Impact Report. If it doesn’t exist, be aware that they can’t know if they are being as effective as possible!
9. Don’t place restrictions
It’s tempting to want all of your donation to reach the front line and maximise its impact but that would mean no funds are available to pay for vital overheads that ensure quality control and good governance. Trust the management to spend your money wisely – don’t try to second-guess them.
10. Check out the finances
You don’t want to make a donation to a charity that ceases to exist shortly afterwards. The historical accounts can paint an interesting picture (especially for charities with annual income greater than £500,000 which must disclose more information). What’s the trend of income? Does it exceed spending consistently? Are the sources of income predictable?
Have a look at the Giving is Great website for further resources.