Tuesday, May 31, 2011

One two, buckle my shoe

They are called micro-gifts, and they add up. We had requests at Costco, PetSmart, and our local grocery in the past week to add a dollar (or five or ten) to a purchase to give to a charity. There is even “an app for that,” developed by three teens, although it isn’t clear how they vet charities to fit the marketing line that they are "carefully selected service organizations”

I asked my teens Ann, Elle, and Lia what they think about this form of giving. They all said that these gifts are a good thing for the charities because they can raise more money from lots of small donations. They liked that the amounts requested fit easily within their income or allowance.

But they also said that such giving does not teach care for others. Instead, the donors are likely already people who give (two-thirds of households in the U.S. are donors) or are literally acting on impulse, like buying a bag of chips or a candy bar at the check-out line.

Ann said it was like an electronic version of the Salvation Army bell ringers – you drop a little money in, but you don’t really think about the needs. Elle wondered how the checkout personnel feel in the campaigns where they have to ask, “Do you want to give a dollar to….?” She wants to follow-up with her friends who work in retail because she is concerned that they might develop negative attitudes to charitable giving in general through a requirement of their jobs. Lia pointed out that people who do not like this kind of request might go shop elsewhere. I suspect there are no studies about that unintended consequence.

Our daughters thought that if someone acted on impulse, that was better than not giving, but it would be even better if they acted from principle, from knowing that giving was the right thing to do. Without coaching from me, these 15- and 17-year olds differentiated giving motives identified by Rene Bekkers and Mark Wilhelm in a very well-done study of motives. Basically, empathy is good but the “principle of care” is fundamental to helping others.

As for us, we picked up the card at the market to give to the food pantry, but we did not add a dollar for the local children’s hospital or funding for homeless pets. Basically, we used micro-gifts to support causes that we already support. I wonder how many others do the same.

Thursday, May 26, 2011

The owl looked up to the stars above*

It’s only Thursday, and we’ve received ten appeals since Monday by mail and one at our door. Plus Bob Payton died and a memorial gift is suggested in his obituary.

We do not respond to direct mail, so those are easily set aside. Kevin—contrary to statistical trends identified by John List—told the young, attractive, tall blond woman speaking for Save the Children that we do not give at the door.

The dilemma comes from the Payton family’s request. We both worked with Bob and value his many contributions. We understand why he and Polly created the Joseph and Matthew Payton Philanthropic Studies Library and why the family requests gifts to it. However, much as we value the library and its staff, we still aren’t certain that we should make our gift in his memory there.

Once in the past, we made a memorial gift to an Evangelical church, following the wishes of the family, though our beliefs are different. But there, our loyalties were to surviving family members who are close to us. In this case, we are not friends of Bob’s heirs, and we have strong feelings about where our mite might have the most enduring impact.

While director at the Center on Philanthropy, Bob secured funding that supported creation of a faculty and enrollment of students for an MA in Philanthropic Studies. For the biggest long-term change, it feels like we should make the memorial gift to a scholarship fund for that program.

The Payton library will receive Bob’s books and surely needs funds to accession those thousands of volumes. Plus the librarian happily orders most materials that my husband requests for his students’ research and his own. Further, she fields questions from around the world, providing service far beyond the campus. There is no doubt that our gift would be used and used well.

But the library is at least partially funded by the University, whereas the Center relies very heavily on donations and revenue other than state funding. Scholarships would attract even more highly-qualified students to the MA in Philanthropic Studies, which further strengthens the field that Bob helped create. And with more students, there will be more demand for the library, not to mention the revenue impact for the campus of having candidates in a degree program.

Of course, we could do both, but not right now. We will have to choose one or the other – or make two miniscule contributions of token significance only. Since payday is next week, I guess we'll have some more time to sleep on it.

* Bob Payton took this medal with an owl as his personal symbol.

Tuesday, May 24, 2011

Jack be nimble, Jack be quick

This week, we will give for disaster relief, and we will not restrict our gift in any way. Why not? Organizations need operating expenses to remain open and ready for disasters. Without preparedness, there is no rapid response, no search teams for Joplin, MO, no volunteer network to help set up shelters. All of those take people to organize, and those people need telephones, offices, copies, custodial services, insurance, and accounting services. All of those are overhead or operating costs.

Many donors prefer not to support operating expenses. A former supervisor told me that the notion of low overhead costs for charitable organizations started in 1997, when Ted Turner pledged $1 billion over 10 years to create the United Nations Foundation. My boss said Turner pounded the table and said, “Not one penny for operating costs.”

I did a little research and learned that the administrative costs Mr. Turner refused to pay were not those of the United Nations Foundation, which his gift created, but those of the United Nations itself, as reported by legal scholar Stacy Williams in the Georgia Journal of International & Comparative Law (1998-99, p. 425-456).

The UN Foundation does have operating costs, very low ones. The organization reports that 94 cents of every dollar spent went directly to support UN programs and causes. The other 6 percent paid for services that almost all functioning charities need to fund. When nearly 100% of your operating budget comes from one donor and you do not yourself implement many programs, keeping overhead costs low is pretty easy.

The BBB Wise Giving Alliance publishes a guideline that 35 percent of total expenditures is typically acceptable for overhead (which includes management, fundraising, operations and more). The alliance makes allowances for variations from that, reflecting the findings of a major, multi-year overhead cost study project released in 2005 by the Urban Institute and the Center on Philanthropy at Indiana University.

In fact, there is no “one size fits all” ratio for overhead costs. Management expenses vary along several dimensions, including the organization’s age, operating budget, reach (local or international), and specific type of service such as for short-term assistance or long-term change.

The Bridgespan Group took the Cost Study work further in 2008 and found “organizations and their funders are locked in a vicious cycle in which nonprofits are pressured to under-invest in overhead and to under-report their true overhead costs. . . In the short-term, staff members struggle to ‘do more with less.’ Ultimately, though, it’s the beneficiaries who suffer.”

Despite these research findings, some donors still insist on "not one penny for overhead." Most recently, I've seen the claime made by groups fundraising for relief in Japan, and we will almost certainly see it for relief in Joplin.

We prefer to follow an older adage than “not one penny for overhead," a Latin phrase for a fundamental precept of emergency care: Primum non nocere: First do no harm. So when we give to an organization for disaster relief, our gift is completely unrestricted because we know when disasters hit, we want the responding organization to be there and ready.

Monday, May 23, 2011

One potato, two potato

Counting rhymes help determine who is “it” or whether to eat the apple chunk or the pear slice in the fruit salad, but they are not much help in deciding where to give charitable contributions. Because we think it is important to give intentionally, our three daughters started early to learn how and why to give.

The year Ann and Elle turned seven, adults in my extended family decided to give to charity instead of exchanging holiday gifts. We involved the girls, too: each could pick a charity, and we would give $25 to it. How do you help a seven-year old (or five–year old, as Lia was) pick a charity?

We played a game like Twenty Questions, turning it into a grade-school level, secular discernment process. First query: “Do you want to help people, nature, or animals?” Ann wanted to help people, Elle was interested in nature, and Lia said animals.

So we asked, “Do you want to help a group you belong to or a different group?” Here or somewhere else in the world? Something new that is being tested or an activity that people already know works? And so on.

Ann picked helping people who need food, starting our long-term commitment to Gleaners Food Bank. Elle selected the Nature Conservancy. For Lia’s preference to help horses, I checked GuideStar.org to find an organization that also met parental expectations for accountability. This led us to Days End Farm Horse Rescue in Maryland.

We gave our children choices about their giving early, and our money has followed. Now, even their own money follows, showing perhaps a little success from our methods. But our money still keeps following their giving preferences, and the process is not confined to December.

This week, as the academic year winds down, we have made a pledge to the Gay Straight Alliance, which advocates respect and tolerance. The local chapter just elected Lia as an officer for next year, so we want to show support for the social justice mission of this high school program.

We are also writing checks for the twins’ fundraising as part of the 24-hour Relay For Life to benefit the American Cancer Society. This engagement stems from multiple motivations—memorial and tribute purposes to honor people we know, plus a desire to bring about change so fewer children die. But also note that Ann and Elle will accrue hours toward community service, which is required for their academic program. This last is important for why we are supporting this cause right now.

Would we give to this organization at the beginning of summer, when my husband’s academic pay stops for two months, if our children were not involved? Probably not.

Our gift is one of millions, so it even though we give a little, it adds up. Yet, we are giving up something else to do this.

In the end, we decided that giving matters as an example, because of the good it can do, and because it forces us to consider our choices and how we express our values on a day-to-day basis. We can find flowers on sale later to fill the window boxes, but we will not have the same chance to be part of our children's promise to their team mates and themselves to do something good.

Wednesday, May 18, 2011

Baa baa black sheep, have you any wool?

Three bags full…..that’s what we’ve been asked for — bags of food, clothing, and money. To paraphrase lyrics from Smash Mouth’s “All Star” — the requests start coming, and they don’t stop coming.

We cannot give to everything, so we have to choose. In the spirit of blogs that share the path to happiness, how to be a better (or at least different) parent, or even how to write a blog, this blog is about how and why this family makes choices about charitable giving and volunteering. Not that we are especially important donors, but that thinking about the process, and sharing some of those thoughts, will have benefits for us and maybe for you.

First some background. Our five-person household is one of the two-thirds of U.S. households that give to charity in a year. Some of us are also in the roughly one-third of individuals in the U.S. who volunteer in a year. Plus, more than ten years ago, my extended family decided to stop exchanging holiday gifts and give money to charities instead. As further incentive to reflect on our giving, both my spouse and I are affiliated with the Center on Philanthropy at Indiana University. Perhaps more than many, we discuss the how and why of charitable giving at dinner, during “car time” with the kids, and even long-distance with our parents and siblings.

Now, back to those bags. This past week, after sorting the many appeals received, it took no effort to decide to clean the pantry and fill the plastic grocery bag for the Letter Carriers’food drive and sort through a closet to pack a parcel of clothing for Goodwill. These “gifts” cost us only a few minutes of time. These donations are also consistent with our on-going commitments to local organizations that meet basic needs.

The tough choice comes with the request to give money for homeless services provided by Volunteers of America. The appeal is clever, with the letter printed on a lunch-size paper sack folded as a “self-mailer.” The bag itself contains some printed information and a gift form and envelope. I like clever, so I am tempted to give to reward creativity.

However, this charity would be a new one for us—and that doesn’t work just now, as my business just begins. Further, except for tossing a little into Salvation Army red kettles in December, I feel like a traitor supporting homelessness services other than the Homeless Initiative Program, where I worked in the late 1990s.

We also very seldom respond to direct mail (or email) or telephone appeals. Even a clever appeal asks for an emotional response, rather than an intentional commitment to an organization whose work we’ve checked out (or know first-hand).

So, we gave two bags full, not three, to our household’s priorities for the most fundamental of needs on Maslow’s hierarchy: food and shelter. For now, we’ve set aside about a dozen other appeals received to consider someday soon. And the requests keep coming--there were six more in today's mail.