Popularity contest philanthropy

This seems to be the trend these days in philanthropy. The idea is that a company allows the general public to vote for their favorite charity/ministry/non-profit/NGO and those with the most votes get the grant money. It is very much like how American Idol works. Examples of this include JPMorgan Chase’s Chase Community giving, American Express’ Members Project, and Pepsi’s Refresh Project. I also recently came across another group called Giving of Life that specifically targets evangelical ministries.

While this sounds good, it is a bad model. The idea is that by using crowd-sourcing, the best organizations or the most effective projects will rise to the top and get the most money. However, there is no way that this model actually ensures that this happens. The only way this would work is if the general public were well informed, understood the right ways aid and development should be done, and knew if organization X was actually doing what they say they are doing in an effective manner. Most of the time, however, the general public is swayed by emotion rather than knowledge. More likely the winners will tend to be those organizations that already have a high visibility or those organizations that can most effectively mobilize their followers/donors/fan-base to vote. This is especially true for Giving of Life’s project which allows people to vote once a day for the same organization, and if you register, allows you to vote five times. This is not to say that the organizations or projects that win these grants are not deserving of them. Some of them might be, but overall this model does not ensure that.

Many foundations and groups giving out grants have applications and processes that organizations have to go through in order to determine if they should receive any money. One such organization is GiveWell. In order to get their grants, organizations must submit a very detailed application and then proceed through a very in depth process to determine their effectiveness. They also make this information free to the public, which sets them apart from other organizations. This does not happen with any of the above projects as far I know. If there is no determinant of effectiveness then this is nothing but a popularity contest.

If grant giving becomes a popularity contest then there is no pressure on the organizations vying for those grants to prove that they are doing more good than harm, that they are using best practices, and that they are using the money effectively. In fact, this is what Giving of Life has to say on this subject:

We’ve engaged with a good number of ministry leaders who say there’s an incredible amount of pressure and anxiety (sometimes self-imposed) that comes with living up to human and donor expectations. So much so, that trying to meet some elusive—or at times, marketplace—goals distract from the original vision, day-to-day execution, and ministry purpose.

The approach to this grant is as simple as they come, which makes us feel a bit different (in a refreshing way). We don’t require you to provide metrics, give excessive strategies, hire a grant writer, or fill out stacks of forms. This is your chance to skip all the expected hubbub and just shoot straight with us. What makes your ministry tick? What’s your passion? Why do you do what you do? How are you giving life to others?

I understand their desire to help organizations get the money they need to function quicker and easier than going through a formal application process. I also agree that many times donors put so many rules and regulations around the money they give out that it prevents organizations from using the money in the most effective manner. The problem is that by not doing any sort of evaluation of an organization you leave open the chance to fund ineffective, deceptive, or outright terrible organizations. To be clear, I tried contacting Giving of Life and asking them a number of questions about their model, however, they never responded back.

At the end of the day the general public just does not have the knowledge to know which organizations are using their funds in the best way possible, are engaging in the most effective work, and are doing what they actually say they are doing. This is not to say that foundations always get this right with their application processes either. The overall philanthropy arena needs to do a better job of getting the money to the best organizations.

Popularity contest philanthropy was just such an attempt, however, we need to come up with a better, more effective way.