Wednesday, January 16, 2008

Do donors really look at these charity regulation or donation sites?

I am sitting back and reading the commentary about Holden at GiveWell and I'm thinking to myself why? Why do these websites exist to tell donors what the best charity is to donate to? Do donors even use these websites?

I remember reading research a couple a months ago about how very few people actually donate online to charities. American Express and Indiana University released research stating that 65% of Americans gave to charity last year and out of that 65% only 1 out 10 regularly gives online. So, basically do the small percentage of donors who regularly donate online, actually use these websites?

There are all these standards of accountability that have been created for nonprofits, however which are these standards of the right one? Does Holden or the folks at Charity Navigator or GreatNonprofits really know what it is like to run a nonprofit organization? Here in San Diego we are having an issue with the Better Business Bureau because it is pushing its way into the nonprofit sector and thinks it knows how nonprofits should run, it has its wise giving standards that are sweeping across the United States. It is frustrating that all these different groups think they know the right way a nonprofit should run. I am more apt to follow the standards put out by the Independent Sector or the Nonprofit Congress which is made up of real nonprofit managers like myself who knows what it is like to actually run a nonprofit.

I've been running various nonprofits for the past 7 years all of them with budgets ranging from 500k to 1mil. And, sure, I know the multi-million dollar nonprofit have a department that can fill out all the paperwork requested by the BBB and pass all the standards set by Charity Navigator, GiveWell, ect, however lets not fail the small to mid-sized nonprofits that are working on the grassroots level. Don't just fail us because we don't fit into your accountability standards box. I can tell you my organization is more ethical than the multi-million dollar nonprofit down the street.

I see our work on the ground level, I know we help over 700 grieving families each year. I know what we need to do to pass all those standards, and sure we're not there yet. We are on our way, but my goodness, we are still raising money and a lot of it from people who believe in our mission and see our results. So, a note to all of you who run your wonderful donation sites that want to channel money to my nonprofit, just remember the research, and the fact that I along with many other nonprofit managers, don't have time to figure out what website I need to log on to today to make sure I meet your standards.


Tom Durso said...

Nonprofits, Heather, are human endeavors, which means that as noble as their intentions are, there will be times when they fail their donors. I can't fault the effort to make nonprofits transparent and accountable -- ultimately that will lead to a more complete fulfillment of mission. Perhaps the middle ground is to engage the watchdogs and explain why NPs are different and should be judged according to different standards.

Bill Huddleston said...

I agree with your comment about businesses often not understanding the differences between non-profits and businesses.

In terms of guidelines for non-profits,I do know that in addition to IS and the NonProfit Congress (I was a delegate from Virginia to the 2006 NonProfit Congress), that some of the state association of non-profits publish "principles of excellence" or something similar.

I don't know if the California Association of NonProfits has published one, but one that I am familiar with is Maryland's:

The Maryland Association of Non-profits publishes a rigorous one, and the Maryland non-profits that meet all the criteria do say that it helps differentiate them.

The information below is from their website and is the summary, more detailed information is available at their website.

Maryland's nonprofit sector is committed to public service. Hard at work in communities across the state, nonprofit organizations are serving and meeting the needs of our citizens and strengthening our communities.

The success of Maryland's nonprofit organizations depends upon public confidence and broad public support. Maryland's nonprofits are supported by individuals, corporations and foundations through charitable contributions and volunteer effort; by government through contracts and grants; by consumers through purchases and fees; and by the general public through state and federal tax laws.

The Maryland Association of Nonprofit Organizations (Maryland Nonprofits) is committed to bolstering public confidence in and support for the nonprofit sector. Therefore, Maryland Nonprofits has developed these Standards for Excellence (Standards) to promote ethical practices and accountability in nonprofit organizations across the state.

Nonprofit organizations must comply with applicable local, state, and federal laws. These Standards build on that foundation, and go a step further. Based on fundamental values - such as honesty, integrity, fairness, respect, trust, compassion, responsibility, and accountability - these Standards describe how nonprofits should act to be ethical and be accountable in their program operations, governance, human resources, financial management and fundraising. Eight (8) Guiding Principles are provided, along with fifty-four (54) Standards - more detailed performance benchmarks that will enable nonprofits to strengthen their operations.

Maryland Nonprofits is committed to these Standards and all Maryland Nonprofits' members are required to pledge their commitment to the Guiding Principles. Members are supported in their efforts to implement the Standards through training and technical assistance provided by Maryland Nonprofits, as well as through a voluntary self-regulatory program by which organizations are evaluated based on their compliance with the performance indicators. In addition, Maryland Nonprofits invites non-member nonprofits to subscribe to these Standards.

The Standards for Excellence are intended to describe how the most well managed and responsibly governed organizations should, and do, operate. They provide benchmarks to determine how well an organization is fulfilling its obligations to those who benefit from its programs, to contributors, and to the public.

(Click on the Guiding Principle title for full description.)


Nonprofits are founded for the public good and operate to accomplish a stated purpose through specific program activities. A nonprofit should have a well-defined mission, and its programs should effectively and efficiently work toward achieving that mission. Nonprofits have an obligation to ensure program effectiveness and to devote the resources of the organization to achieving its stated purpose.


Nonprofits are governed by an elected, volunteer board of directors that should consist of individuals who are committed to the mission of the organization. An effective nonprofit board should determine the mission of the organization, establish management policies and procedures, assure that adequate human resources (volunteer or paid staff) and financial resources (earned income, government contracts and grants, and charitable contributions) are available, and actively monitor the organization's financial and programmatic performance.


Nonprofit board and staff members should act in the best interest of the organization, rather than in furtherance of personal interests or the interests of third parties. A nonprofit should have policies in place, and should routinely and systematically implement those policies, to prevent actual, potential, or perceived conflicts of interest.


A nonprofit's relationship to its employees and volunteers is fundamental to its ability to achieve its mission. Volunteers occupy a special place in nonprofit organizations, serving in governance, administrative and programmatic capacities. An organization's human resource policies should address both paid employees and volunteers, and should be fair, establish clear expectations, and provide for meaningful and effective performance evaluation.


Nonprofits must practice sound financial management and comply with a diverse array of legal and regulatory requirements. A nonprofit's financial system should assure that accurate financial records are kept and that the organization's financial resources are used in furtherance of the organization's charitable purposes. Organizations should conduct periodic reviews to address regulatory and liability concerns.


Nonprofits are private corporations that operate for public purposes with public support. As such, they should provide the public with information about their mission, program activities, and finances. A nonprofit should also be accessible and responsive to members of the public who express interest in the affairs of the organization.


Charitable fundraising provides an important source of financial support for the work of most nonprofit organizations. An organization's fundraising program should be maintained on a foundation of truthfulness and responsible stewardship. Its fundraising policies should be consistent with its mission, compatible with its organizational capacity, and respectful of the interests of donors and prospective donors.


Nonprofits provide an important vehicle through which individuals organize and work together to improve their communities. Nonprofits should represent the interests of the people they serve through public education and public policy advocacy, as well as by encouraging board members, staff, volunteers and constituents to participate in the public affairs of the community.

Bill Huddleston
MPA in NonProfit Management -
George Mason University

Author of soon to be released:

A Hidden Treasure for Non-Profits,
How to tap into the CFC, America's Largest Workplace Giving Campaign


Expert on the Combined Federal Campaign (CFC,
$1 billion of unrestricted gifts to thousands of nonprofits.

Perla Ni said...

Heather, thanks for this thoughtful post. I want to respond to your question about GreatNonprofits. We don't set standards or evaluate nonprofits. We are a website that enables people - volunteers, program participants, donors and other stakeholders of nonprofits - to share their reviews of those nonprofits. It's like Amazon book reviews. We don't do any evaluating ourselves.

It has been really rewarding to see that it is the small to medium sized nonprofits who have been most active supporters of our site. Many of these see our site as an easy and expensive way for their volunteers, clients and donors to express what they think of the nonprofits' social impact. We've been told by nonprofits on our site that people read reviews about them on our site and then signed up to volunteer. It's been gratifying to see that this tool is helpful to nonprofits without creating more work for them.


Anonymous said...

I want to correct a factual error - GreatNonprofits doesn't set any standards or do any evaluations. We are a website that enables people - volunteers, clients, peers - who know specific nonprofits to share their experience about those nonprofits. Much like Amazon book reviews or any other consumer reviews site (Epnions, Zagats, TripAdvisor, Yelp, etc.) You'll see on our site stories of people who have volunteered for nonprofits and stories of people who have received services.

We know how much the help of a nonprofit can mean and also how difficult it is for nonprofits to show that their social impact. I've known nonprofits personally as a client of their services. My parents were poor and we lived five blocks from the train tracks in public housing and countless nonprofits helped us. If you look at photos of me when I was a kid, practically everything I wore came second hand from nonprofits. My cavities got filled for free at a nonprofit community dental clinic.

And that’s why GreatNonprofits is a tool for sharing stories and reviews of people -- people like me, the victims of Katrina, and hundreds of thousands of others -- who have seen the impact of nonprofits up close, and can speak personally and firsthand about it.

Perla Ni
Founder & CEO, GreatNonprofits

Heather Carpenter said...

Thanks for all your comments. I realize I put Great Nonprofits in a category with Charity Navigator when in fact it is different. Thanks Perla for the clarification.