Philanthropy is full of good intentions, but none of us gives money away hoping we made a mistake. And yet it happens all the time, in numerous ways.
I’ve heard more than one person, when thinking about where to give, say something like “It’s clear this nonprofit needs my support more than the other. This nonprofit might not survive without my contribution and that other one has plenty of money.”
Ask yourself some questions before taking action. After all, there are certainly times where urgent financial need can be a good criteria for making a grant decision. But just as often it is not.
- Why are they in such dire need?
- What are the reasons they may not survive without my money?
- Why are they so low on cash?
- And especially, should I fund organizations based on financial urgency or on positive impact?
Sometimes a nonprofit might be in a less-than-stellar circumstance because of poor cash planning, questionable program effectiveness, or ineffective leadership. Or it could be a good organization going through a rough stretch too, when they need support most. The point is not to categorically reject or approve giving to an organization in “dire need.” Take a little time to understand why that is the case.
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The Other Side of the Coin
The corollary and frankly, bigger and more frequent, mistake is when philanthropists sometimes shy away from funding successful nonprofits with a strong financial position. We can assume they don’t “need” the money as much. But why would we punish successful organizations? Isn’t that what we want them to be? We would invest more in a successful for-profit company without question so why would we not do the same with a high-impact nonprofit? We should.
We should contribute more, not less, to organizations doing great work, with effective programs, that have the ability to sustain funding over time.
There can be a tendency for philanthropists to fund need instead of impact. Maybe because one organization’s mission is more compelling than another’s. We all want to give to what we care deeply about and there is nothing wrong with that. But at the end of the day the reason to contribute to a nonprofit is to get improved academic outcomes, fewer teen pregnancies, a cleaner environment, and other positive changes. It’s not about the nonprofit’s need, it’s about the positive impact each of us wants to see in our world.
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