Wired Causes

You are browsing the archives of 2010 August.

The NetSquared team reads and shares lots of different blog posts, articles, reports, and surveys within our team. We have a lot of fun sharing within the team and it occurred to us that we should start sharing them with you, too! Net2 Recommends is a monthly series of news and blog posts from around the web that we found interesting or inspiring, mind-bending or opinion-changing, fun or just plain weird.

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Colorado Project
View more presentations from Beth Kanter.
Chip Conley was the keynote speaker at last week’s Craigslist Foundation Bootcamp and one thing that he said that has been stuck in my head is:  “You can have a job, a career, or calling“    The latter, a calling,  is when you can tap into an internal motivation that [...]

On September 15, the Women Who Tech Telesummit will bring together talented women breaking new ground in technology who use their tech savvy to transform the world and inspire change. Hundreds of women from across the US and abroad in the non-profit, political and business world will be participating and Panelists include women on the forefront of social change and technology. 

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Held August 14, the NetSquared Camp in Vancouver brought together nonprofits, activists and social entrepreneurs with their friends and allies in the world of technology and communications in an offline event dedicated to learning and sharing. The Camp, one in a series of Camps Pilot events, aimed to provide an environment for learning, networking, and collaboration – and it was a huge success! Learn more about the event including resources, stories, and media from the day:

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As we reported in the Camfire Paris event recap, the event in Paris was a huge success! Recently, the organizers put together a slideshow summarizing the event. This slideshow includes loads of resources from the day, including key stories, outcomes, and interesting findings:

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As we reported in the Camfire Paris event recap, the event in Paris was a huge success! Recently, the organizers put together a slideshow summarizing the event. This slideshow includes loads of resources from the day, including key stories, outcomes, and interesting findings:

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The August NetSquared Cambridge (UK) event was led by Dave Bower, a software developer who is the driving force behind Lourish.com. Lourish is a newly launched website designed to facilitate swapping of home-grown fruit and veg in the local community.

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If you work for a charity rating agency, you did not want to be at the DMA Nonprofit Federation meeting this week. Watchdogs were about as popular as canines at a cat convention. First, you had the keynote speaker - Dan Pallotta, author of Uncharitable and a big critic of watchdogs like Charity Navigator and the BBB Wise Giving Alliance. He laid out a provocative, controversial and compelling case for allowing charities to operate like capitalists - paying to get good talent, spending and risking what’s needed to do effective long-term fundraising, and being judged on social value created rather than overhead spent. There was some good thinking there - and some pointed potshots. In the process of making his case, he slammed watchdogs for perpetuating a simplistic focus on how much charities spend on “overhead.” The audience loved it, of course. Direct marketers are labeled as fundraising “overhead” and the less efficient of them have been called out by watchdogs, sometimes with good cause. It was a joy for them to hear “overhead should be dead.”

Specifically, he said: “We must get people to stop asking what percentage of their donation goes to a cause.. and give nonprofits more freedom to spend their money on things demonized as overhead, so they have some hope of reaching a fraction of the scale of the social problems they are trying to confront.” He advocated that we stop using the word overhead, that donors stop asking questions about overhead, and that we throw out the watchdogs and build “a magnificent national assessment apparatus.”

Then there was the release of two studies at the conference that also called into question the work of watchdogs, saying their ratings “may be causing more confusion than clarity.” The reports were “Reframing the Discussion about Nonprofit Effectiveness,” and “Charity Rating Scales: The Challenge of Developing ‘Effective’ Measures of Nonprofit Organizational Effectiveness,” both available via the DMANF. The studies say the ratings affect donations, with watchdog approval leading to donor money. This is a problem, the thinking goes, because the ratings only measure how much money a nonprofit spends on “overhead” rather than how effective that charity may be. The DMANF said the first report concluded:

Those who want to learn about a nonprofit prior to making a financial contribution not rely on watchdog websites as “one-stop shops” for information, but to do “old-fashioned” research about a charity’s operations and programs to help make a more fully informed decision.

Hmmm…. I’m not sure what “old fashioned research” involves, but I can say it is unlikely to happen. It seems to me this whole watchdog-bashing is long on criticism but short on solutions. I love the idea of a magnificent national assessment apparatus, but that is a very, very long way away. In the meantime, what are donors to do? And what are we nonprofits to do?

Let’s review. Here’s the anti-watchdog position: Overhead doesn’t tell the full story about a nonprofit’s work. Therefore, it is bad. Kill the watchdogs. Donors should set out to do their own in-depth research on a nonprofit’s effectiveness - or we should await the magnificent national assessment apparatus.

Here’s what I like about that argument: Yes, overhead is only one limited criteria and the CEO’s salary doesn’t really tell you how many lives get saved by a charity. I agree with Pallotta that paying for talent is not bad, and fundraising is a necessary expense. And yes, it’s a shame that overhead is the only quick way to compare charities.

Here’s what I don’t like about what I heard: That anyone in their right mind thinks the solution is for donors to do “old-fashioned research,” taking time to go try to figure out which nonprofits are effective with in-depth analysis based on…? I don’t do that with my 401k - so I certainly don’t have the time to do that with my charities - if that data was even readily accessible. There is no single good source of information on nonprofit effectiveness, though some good people are doing their best to start trying to provide it. We don’t have the magnificent national assessment apparatus, so what do donors do in the meantime?

Today I called up Ken Berger of Charity Navigator today to ask what he thought - and to find out if he knew the claws were out. As he’s publicly said, he agreed that overhead is a one-dimensional view into charities. That’s why he, with partners like Great Nonprofits and GuideStar, got together and said as much. It’s also why Charity Navigator is adding two additional dimensions to its ratings. You see, here’s the funny thing: the watchdogs have gone on record agreeing overhead doesn’t tell the whole story. And Charity Navigator is working to add two more dimensions to its work. They have always done #1. They recently added #2 and are working on #3 with their partners:

1. Financial health – Is the nonprofit sustainable? Does it have robust financial strength to survive in good times and bad? Is the overhead not at the extreme end of the continuum?

2. Accountability – Does the organization have ethical practices, good governance and transparency? Is it accountable to its constituents?

3. Outcomes – Can the nonprofit supply information about meaningful and lasting change in the communities and lives of the people it serves? Can they show evidence that these changes are as a result of their efforts? Do they have systems and processes in place to effectively manage their performance?

These three dimensions will then be part of Charity Navigator’s star ratings - which is the only way any of the watchdog critics are going to get to their goal of a more well-rounded view into nonprofit effectiveness that donors actually use. They may hate the watchdogs, but we need a simple, watchdog-like system with an at-a-glance seal of approval. It would be nice if the seal told as full as a story as was possible in a sector where it’s not always easy to measure impact. People like to see stars - a simple, accessible and easily compared rating - and that is never going to change. Let’s not condemn a desire for simple ratings. And let’s quit trying to change that universal truth and constructively contribute to a way to make those stars as three-dimensional as is practical. A fuller picture is something everyone wants - but we need to do the work together of making that possible.

Full disclosure: I write this blog as an individual and not as a representative of my organization, but I should say my organization Network for Good partners with Charity Navigator and GuideStar.

On June 25, over 70 participants came together at NetSquared Camp Portland to learn, share insights, and build sustainable collaborations in an open environment. The Camp, one in a series of Camps Pilot events, was a successful gathering focusing on social innovation and increasing impact in the local community and beyond. Below, we’ve outlined some of the information, outcomes and key take-aways from the event.

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