Last week I participated in a webinar with Dan Pallotta, author of “Uncharitable” and Ken Berger, CEO of Charity Navigator, sponsored by Network for Good. You can access my presentation on GuideStar’s SlideShare channel, but I wanted to touch on a few key points for those of you who couldn’t attend or who wanted additional clarification.
Dan has written a controversial book and I don’t agree with much of it. He uses exaggeration and hyperbole far too much to make his points. And he mistakes the difference between operating in a business-like fashion with running a charity as a business. But there’s a lot that I did agree with: in particular his concern about fair compensation, the strategic use of promotion and advertising and better access to capital for nonprofits.
Pallotta complains that his organization was held up to unfair public scrutiny in its work. For many years I have talked to people about the fact that the era of assumed virtue in the nonprofit sector is over. There is greater demand for transparency and accountability, a greater demand for data on which to base giving decisions, and a greater personal engagement in philanthropy. In short: people want to know how their contributions are being used. We have to earn people’s trust every day.
Pallotta also attacks evaluating a charity on the basis of its overhead rate. Here I am in total agreement and it’s important that nonprofits resist any ratings efforts to judge them solely on the misleading overhead rates. We know that people come to their giving decisions with a variety of values and expectations, so donors want to be able to choose what evaluation criteria is important to them. Last year’s Money for Good research project showed us that donors evaluate based on a nonprofit’s legitimacy, impact, efficiency and reputation.
For 16 years, GuideStar has made a commitment to transparency and accountability. Previously on this blog I have discussed our view on nonprofit evaluation. I continue to encourage people researching a nonprofit’s effectiveness to focus on three questions:
- What do you do?
- How do you do it?
- How are you doing?
In addition, we have partnered with Independent Sector and the BBB Wise Giving Alliance on an initiative called Charting Impact to do just that – strengthening individual organizations’ ability to document their impact and to share the results of their work with many different stakeholders, thereby expanding our sector’s ability to respond to the most important issues in society. More on that to come.
At GuideStar, we pride ourselves in having 360 degree data sources on 1.5 million tax-exempt organizations and providing the full nonprofit picture to the users of our database. Our GuideStar Exchange program encourages nonprofits to provide information about their mission, programs, activities, board, management, finances, governance and policies, etc., and to personalize their organization for people through photos, videos, user reviews, etc.
In the meantime, I’d like to hear from you. What kind of evaluation barometers do you want to see about the nonprofits you care about? How can GuideStar better serve you as an evaluator?
The preceding is a guest post by Bob Ottenhoff, Chief Executive of the Center for Disaster Philanthropy. With an entrepreneurial spirit, strong technology focus, and a quest to make an impact in the world, Bob has the ability to take an organization and lead it into strong performance, sustainability, and industry leadership.