Low Ranked Charity Not A Scam But – Skip Global Giving If You “Sleep-In” This Black Friday
It’s a great idea: A small non-profit, Global Giving, challenges Americans to avoid the long lines and return to the true “Giving Spirit” of the holidays. But is it? Is it with, what, according to Charity Navigator, the well-respected non-profit watch dog, NOT a top notch company…in fact, the lowest ranked of similar organizations! Global Giving, according to Market Watch is encouraging shoppers to give a donation instead of a gift:
To help Americans rediscover the true meaning of the holidays AND find a gift for “the person who has everything,” [Global Giving] — “the Amazon of philanthropy” — is launching the “Great American Sleep-In”: a challenge to get more Americans to spend time with their loved ones and avoid the mall traffic this “Black Friday” by giving a gift that gives back … all from the comfort of their own home…. This year, instead of spending $20 on another tie, how about providing baby bottles to mothers in Brooklyn, immunizing mothers and children in India or sending a child to school in Uganda?
The problem is, that the organization running this promotion — and don’t be fooled for a minute, this is a promotion — may not be such a great sponsor. After a bit of research, I’m not sure I want to give them my donation. This, from their own site, troubles me:
All donations go through the GlobalGiving Foundation, a registered 501(c)3 organization, which receives a nominal 10% fee. This helps cover the cost of operating the marketplace – finding and researching projects, attracting donors, and building our website.
Having spent a number of years in the non-profit world I can tell you that 10% is actually a fairly high take for operating expenses. In reality the numbers are worse: only 80.7% of their revenue goes to program expenses. That means for every dollar you donate only 80.7 cents makes its way to the programs that need it. Finally, and more tellingly, Charity Navigator, the well-respected non-profit watch dog, only gives them 3 out of 4 possible stars. A concern since achieving a 4-star isn’t incredibly hard to achieve.
According to Charity Navigator’s glossary three stars is considered “good.” However, Global Giving ranks THE LOWEST among listed “charities doing similar kinds of work.”
I wouldn’t call it a scam…more likely its simply fiscal irresponsibility. And fiscal irresponsibility can be the result of inexperienced management (the generous explanation) or indulgence on the part of management (i.e. they want unreasonably high salaries, nice offices, fancy PR agencies, etc…). I would hesitate to scream scam, but I am disturbed by the lack of vetting I see out there and I am more disturbed that organizations like The Washington Post, The New York Times and The International Herald Tribune are helping to promote an organization which is…well, simply not trying hard enough.
So, what’s a girl to do? I think we should all embrace the “Sleep In” but instead of sending our donations to GlobalGiving, send them to a higher ranked, 4-star charity doing similar work:
Direct Relief International
The Global Fund For Children
Grassroots International
There are so many really terrific 4-star non-profits out there to donate to this holiday. A good suggestion might be for everyone to “shop” at the old standby Unicef. Their Unicef’s Inspired Gifts program is awesome and they are a 4-star org!
There, now I can actually sleep well when I sleep in next Friday.
Photo by Charles Thompson. Also, this post was written with much help from MC Milker.
Thanks for your thoughtful commentary on GlobalGiving… and your reinforcement of the message that we could be spending our hard-earned dollars on something other than the post-thanksgiving shopping spree.
With that said… I think there are some shortcomings to your analysis.
1. Re: overhead. Many of the giving opportunities on GlobalGiving are not American 501c3s. That means that GG had to do an extra layer of due diligence to ensure that the projects are legitimate… and to provide that tax-deduction to American tax payers. Sure, this adds to the overhead cost… but it also offers a portfolio of projects that are entirely unique to GlobalGiving.
2. Related to that last point… projects on GG are conceived largely by the people living and working in these environments… and that are free from the bureaucracy and overhead of multi-national ngos. I won’t cite any organizations specifically… but I’ve worked in the nonprofit sector long enough to know that people can get pretty creative on what they define as “program costs.” With GlobalGiving, they’re totally transparent…
3. You can give to Oxfam and other multi-national NGOs, but will Oxfam send you video updates of the specific initiative to which you gave? Can you contact the program director directly and ask questions?
4. It’s a steep climb to get to the efficiencies of the private sector… but GG is getting there. Honestly, is there a better site out there for lending ease and transparency to the international giving process? If so, I haven’t seen it.
I’d suggest you give GlobalGiving a try… if you haven’t done so already. You’ll see the tremendous value that it’s providing… and understand how it’s tools making ordinary Americans the face of international aid.
Thank you for an informative topic.. it’s an interesting question. Each organization has a different model.
GlobalGiving is a combined for profit entity with a foundation. Many Futures is the for profit holding company, and their business model is predicated on taking a cut on the donation.
UniversalGiving (http://www.universalgiving.org) is another option. It allows people to give and volunteer all across the world, through prevetted projects. They don’t take a cut on the donation. People can give and volunteer; it’s designed to be a free service.
Instead, UniversalGiving helps companies manage their global philanthropy and volunteer programs across the world. Companies pay for UniversalGiving this service, and it underwrites the UniversalGiving public service, for free.
UniversalGiving is purely a nonprofit.
Sincerely, Pamela Hawley
Ashley—Thanks for your response. I am glad to have you make your case (the “we” leads me to believe that you are in some way affiliated, although its unclear how, with GlobalGiving, since you did not provide a link to you or your company…) However, in response to your post:
1. I don’t really buy that you have to do more costly due diligence than a Unicef or any of the other 1,635 4-star charities out there. I find it hard to believe that the thousands of 4-star charities are not doing as thorough due diligence as you guys.
2. As for program costs, the ratio of revenue to amount spent on programs is one of the most basic and credible standards for analyzing charities. By claiming that this is not a valid metric seems sour grapes at best.
3. Videos updates? Lots of 4-star charities provide tangible updates of programs. Think of the dossiers and letters that come from Save The Children (a 4-star charity) sponsor kids. Maybe if you all spent less on video updates, you could spend more on the programs.
4. I did not suggest that you should aim for achieving private sector goals (although I believe it can be done; check out the children’s literacy program, First Book, for a one example). Rather, I simply asserted that a 3-star effort isn’t good enough for my dollars. Again, not sure what you all are doing operationally that precludes a 4-star rating, but I have no doubt you could be doing better, as thousands of organizations around the country are.
5. To answer your question: “Honestly, is there a better site out there for lending ease and transparency to the international giving process?” My answer is, without question, YES! 106 of them (the results of a search for 4-star “International/ Development and Relief Services” at Charity Navigator.)
So, if you still think I’m coming up short, I’d love to hear why…
Pamela – Thanks for your comment and the info on GlobalGiving’s for-profit position.
Your organization, Universal Giving, sounds very interesting and like you embrace a terrific business model. Its hard to endorse an organization without some kind of third party seal of approval. I would call for any non profit that is not yet rated by Charity Navigator to publish its 990 and/or the financial calculations that Charity Navigator does. Have you considered that?
Thanks again for the comment.
Hi Jennifer – I wanted to jump in here lest you think GlobalGiving is not tuned in to this discussion. Just a few quick thoughts for you to consider.
We are always glad to see open dialogue about the options available to donors – and of course always want to clarify when GlobalGiving is involved.
Just to make sure we are all on the same page about the facts:
We receive two kinds of donations.
First, when people give through our website they choose a specific project/program run by one of over 300 unique organizations, all of which we have vetted individually. What Ashley (who is not affiliated with us but whose husband worked here over three years ago) didn’t point out is that 85-90% of the donor’s contribution, gets to the project THEY have specified, for a specific purpose…not as general operating funds. For almost all other organizations, Universal Giving and a few others excepted, donations are provided as general operating funds.
Second, we are supported by many foundations that provide operating funds – “unrestricted” grants. These funders provide us these grants to cover the cost of developing and maintaining the web platform, our outreach to and interaction with hundreds of organizations worldwide and our outreach to donors. They are essentially investing in the building of our platform, so that the vast majority of funds provided by the individual donor can go to the project they selected. For these grants the 90% does not apply, and the foundations that provide these unrestricted grants expect or intend these funds to be to cover our expenses, not to be directed to projects.
This uniqueness of our business model is hard to capture in a standardized, numbers-driven calculation like that done by Charity Navigator.
Finally, Charity Navigator is one way to evaluate organizations, and there are others on the horizon. You might have seen this Washington Post Piece today. We applaud these efforts that seek to get underneath the top-level numbers and understand the nuances of different types of organizations. Since Charity Navigator is the most visible now, I am curious why a 3 star charity navigator rating qualifies as “low ranked…” in your book. When I look at Charity Navigator, there are some pretty highly regarded NGOs listed with three stars – Grameen Foundation, Global Fund for Children and Donors Choose to name a few. We are happy to be in their company!
Interestingly, all of these orgs have fairly atypical models, so it’s possible that the Charity Navigator methodology might not be capturing the nuances of their financials.
Happy to continue the discussion if your readers are interested
Donna @
GlobalGiving
Hi Jennifer. I hope you’re not giving to UNICEF. Notwithstanding its 4 star rating, put your money elsewhere.
Thanks for weighing in Donna. You make some excellent points. And it is completely acceptable to use non-individual funding for overhead. Also, your 3-star rating IS good. I guess my issues stem from the way you promote yourselves. I received your press release about the Sleep-In promotion. Lots of press releases come across our desks and I am concerned that people write about activities without vetting the organizations behind them. Like not mentioning that what you are doing is a promotion of your gift program, form which you take a 10% cut. You, like all organizations that ask for donations, need to be researched before your press releases are published and you need to disclose policies like a 10% fee.
All businesses and marketing folks, especially nonprofits, need to be HONEST about what they are selling. When you do something great you should shout about it. But you should not use it to misrepresent, mislead or divert. As consumers who care about real philanthropy, we need to resist this type of soft selling because this kind of Charitywash diminishes the value of legitimate philanthropic successes and ultimately results in consumer complacency.
I also take issue with your published statement that a 10% take in “nominal.” It really isn’t. Also, 85-90% of a donor’s contribution making it to the cause, may be considered good, but its not very good.
You also seem fairly disinterested in becoming a better organization. For example, I haven’t heard you say we’re trying to improve our performance or we’ve made this kind of progress toward the goal of achieving a 4-star rating. You seem perfectly content to be a 3-star organization and even lump yourself with other “highly rated NGOs.” But actually, the three you mentioned are not excellent organizations. For example, I personally have donated to Donor’s Choose in the past and was not at all impressed with them. I agree that their model is atypical, but that did not seem to be an advantage to me. Rather, it seemed to make them less effective.
Finally, to your point that “it’s possible that the Charity Navigator methodology might not be capturing the nuances” of your operations, that is an excellent observation. But, 3rd party ratings serve a market function. The information they provide serves to benchmark and then regulate, through a push system, the behavior of the organizations they rate. I think its just as likely that atypically run organizations are ignoring best practices and management standards in their operations. Does the rating not capture an atypical organizations performance properly or do atypical organizations simply perform less efficiently?
So, I continue to believe that there is a lot of misinformation and unvetted support for nonprofits. Your press release just crossed my desk on the wrong day. But, consumers deserve transparency. And any way you slice it, 3-stars is good but its not very good or even excellent.
Well, it’s not really our style to get into a point/counterpoint online…and since we’re in the same area we’d be happy to talk through any of these things with you face to face. I’m sure we have common perspectives on most aspects of what would be good for the industry…and while we may have to agree to disagree on some points, let me assure you that we are constantly striving to “become a better organization.” It’s one of the reasons I personally am here. Last but not least, how about giving Donors Choose another try? You might be pleasantly surprised.
Happy Holidays.
David, you don’t like Unicef? Why? But whatever you’re reasons, this is a good example of doing due diligence on nonprofits. Whatever it is that David doesn’t like, maybe I could have uncovered and not given a media recommendation. Looks like I should practice what I preach a bit better. Now, what was it about Unicef you didn’t like?
Donna, I assume that was the end of your public response, but isn’t the point of blogging to talk through things online?