Despite the financial setbacks faced by many in 2020, charitable giving rose to an all-time high. Global giving statistics aren’t collected, but in the United States people donated a record $471 billion dollars to charitable organizations, the equivalent of 2.25% of the county’s GDP for that year.

Increased giving is great news, and it’s an encouraging signal of how willing people have been to help each other in the face of what has been a chaotic, and for many, devastating, year. However, it unfortunately can’t be assumed that every dollar that goes toward charity ends up doing the good that the giver intended. Not all charitable organizations and projects are created equal; though many are indeed helpful, others are less effective at making a meaningful difference in the long term, instead only improving conditions for those they help in the short run. And some projects can even be downright harmful, especially where they encourage systems of dependence between low-income communities and wealthy donors.

Charitable organizations almost always have good intentions and should be sincerely applauded for trying to make a difference. However, they need to be thoughtful about their actions and strategies. Here are three questions these organizations can ask themselves to help ensure their projects are effective at creating positive, enduring change for the people and communities they serve.

  1. What would happen if donations stopped tomorrow? 
  2. Is the organization addressing the root cause of the problem or just its symptoms? 
  3. Do the organization’s activities help or hinder the creation of a market?

Read the full article about questions for charities by Lincoln Wilcox at the Christensen Institute.