by Eric Friedman
We have an unhealthy relationship with charitable giving. Giving USA reports
that Americans donate about $300 billion
annually to nonprofits—averaging about
$1000 per person. We love the charities we
give to and feel good when we give to them.
This is a nation of do-gooders.
At the same time, philanthropy is broken
and almost everyone knows it. The causes
that receive the most donations are not
necessarily the ones that make the greatest
impact. Instead, the personal whims and
preferences of donors determine where
dollars flow regardless of need or impact.
Donors typically have confidence, which is
largely based on reputation and trust, in
the organizations to which they give. Many
donors do not know how to define a “high
performing” nonprofit, let alone how to
identify one or assess whether there are more
worthy charities. The donor community has
a reputation for responding to inspirational
anecdotes in professionally-written fund
raising material rather than asking for
meaningful evidence of performance;
simultaneously, they express concerns
about high overhead costs and program
effectiveness. Philanthropy is broken, and it
needs to be reinvented.