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Popularity contest philanthropy

October 17, 2011

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.

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4 Comments leave one →
  1. October 25, 2011 11:17 am

    Totally agree! The real problem is that neither popularity contest nor hoop-jumping for foundations is the way to identify the most effective programs. Right now for many charitable activities, the only available information to donors is possibly a rating based on their self-reporting financial information, or their (self-reported) success stories. I believe that donors could be better informed by independent evaluation of the organization’s work (e.g., a program audit). Did the organization do what it said it would do? Check. Did it achieve what it meant to achieve? Maybe. How does it compare to established norms and standards for its area?

    • October 25, 2011 2:34 pm

      Thanks for your comment. The problem with independent evaluations is that it is time consuming. Many foundations do this, but they do not ever publish the results, which leaves individual donors in the dark and forces them to try to do this on their own. That is what about GiveWell and their desire to do this work and publish the results for anyone to view and use.

  2. November 9, 2011 11:17 am

    Hi,

    I competely agree with your assessment. The general public is woefully underinformed about how to choose the most effective charitable organizations to support. I don’t see, though, how cause marketing-related giving like the Refresh Project is any worse an offender than direct giving.

    Isn’t most individual giving a popularity contest? Don’t the organizations with the sexiest causes and the flashiest marketing campaigns or the cleverest fundraising gimmicks always get the most support? This is a problem, without question – it means that resources do not flow to the highest performing organizations.

    It also means enormous pressures for organizations to comply with expectations set by people who, essentially, don’t usually know what they’re talking about. Tragic.

    But I don’t see the distinction between that and the cause marketing you’re specifically targeting with this article.

    Nadine

    • November 11, 2011 3:06 pm

      Nadine, I agree completely with your comment, there is not much different between this and individual giving. I just think that these companies are in a position to change things. I think if they started giving out money for the right reasons to the right organizations, it might lead individual donors to start asking the right questions and giving to the right groups. Much like GiveWell is doing and then sharing their results with individuals so that they can make the right decisions.

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