Four Steps to Successful Giving

During the giving season -- and throughout the year -- you’ll hear from nonprofits asking for your support. They matter! Nonprofits are helping address some of the world’s largest problems that haven’t been adequately addressed by market forces or by government intervention. But you might feel a bit overwhelmed. GuideStar tracks over 1.8 million tax-exempt organizations, every one of them gunning for your in-box and your attention.

As a philanthropist and the co-founder of Worldreader — a nonprofit that brings together technology, local content, and partnership to help millions read around the world — I’ve learned something about how best to help nonprofits achieve their mission.

Here are four things to consider as you plan your giving.

Look in the mirror to discover your cause.

Giving is expressive, so let it express what you care about. Don't get too hung up on what’s popular, or what cause is grabbing headlines today. Instead, look inside yourself and perhaps back in your life to find clues about what you care deeply about. Have you always loved animals? Great—that’s a fine place to start. Do you hike every weekend you can? That’s a clue that environmental causes are meaningful to you.

For me, education and reading have made an enormous difference in my own life. As a child I spent Saturdays in a library while my mother shopped at Safeway; as an adult I left a successful career at Microsoft to join a start-up internet bookstore called Amazon.com. At the same time, I’ve been a news-and-information junkie since I listened to radio as I delivered newspapers in high school. My work supporting Worldreader is all about helping others fall in love with reading the way I have; my support of our local public radio station KQED takes my love of news and share it with others.

Find an organization whose impact, scale, and leadership resonate with you.

You’ve got to do a little research, but don’t stress over this: it’s not hard. Spend 10 minutes on Google looking for organizations focused on your cause, and ask yourself: Which are achieving impact? Whose lives are they working to change, and are they achieving? And when I look at their leadership team, do I believe they have the skills to pull it off?

Measuring the impact of any nonprofit is part art, part science. After looking over an organization’s website or annual report, you should come away with a fairly clear understanding of how they’re changing the world and what success they’ve had.

Whatever you do, don’t forget to look at the people who lead the organization. Running a nonprofit isn’t for the faint-of-heart. It has all of the challenges of running a for-profit organization, plus the added challenge of having to raise funds every year. As Jim Collins famously writes in “Good to Great,” organizations succeed only when they have the “right people on the bus.” That’s true no matter what organization you’re evaluating.

Calculate the organization's efficiency by looking at their cost-per-impact.

Luckily, this is easy. Just look at how much the nonprofit spent in its most recent fiscal year, subtract in-kind donations and expenses, and divide that by the number of people impacted in the same period. (Why subtract in-kind donations and expenses? Because you want to reward organizations that are good at getting as much for free as possible.)

To give an example: Worldreader’s 2017 expenses were $9.8 million, including $2.1 million of in-kind expenses — free Kindles, reduced-price e-books, subsidized shipping, free online distribution, and so forth. That leaves $7.7 million of “cash” expenses. In the same period we supported 2.9 million new readers— school-aged children reading on tablets, mothers reading with their new babies, and young adults finding self-help books on their phones. So in all, we spent $2.65 per reader, including everything from putting millions of digital books on tens of thousands of tablets to the expenses of training publishers to running all the back-end systems to make it all work seamlessly.

Of course, no one metric is perfect. But this one gives you a good overall feel for how far each of your dollars goes towards having the impact you want.

How much should you give? Ask them!  

Nonprofit leaders are extraordinarily well-tuned to understanding their financial needs — they have to be. Look around their website for indications of what they’re looking for, but know that in most cases websites tend to be focused on smaller gifts. If you want to have a big impact, just ask what they need.

One more thing: Imagine running a business in which you need to fundraise for your operating budget every single year.  Think of the amount of time and energy that takes away from running the business. Welcome to our world.

So if you want to be an impact superhero, stretch to give more than they asked for, and consider spreading the gift over a few years. You’ll have an even bigger impact, and help the nonprofit get visibility into their future finances, which in turn helps them think bigger and more creatively.

As a society we ask our nonprofits to take on some of the world’s biggest problems. And many nonprofits have created extraordinary mechanisms to run financial support into positive change. Follow the steps here, and you’ll help to make a real difference in the world.

____

Original contribution by David Risher, co-founder and CEO of Worldreader. Photo credit: Worldreader.