(Sean Stannard-Stockton is on vacation. This is a guest post from Jacob Harold, a program officer at the William and Flora Hewlett Foundation.)
Imagine there was a perfect database of nonprofit performance information. Would donors actually use it to make decisions? With apologies to Kevin Costner, would they calmly walk out of the cornfields of ignorance into the baseball diamond of smart philanthropy?
The short answer is: some would, some wouldn’t—but either way we need to make it as easy as possible. There is no such thing as an “average donor”. Some people give only as a reaction to a personal request, some out of guilt, some out of hope, and others out of cool rationality. Most of us give in a combination of these and other impulses, beliefs, and methods. Emotional giving will always be with us, and we should be thankful for that. But there is latent demand for better information. Even if only 10% of charitable donations by individuals were influenced by better performance information, that could change the destinations of more than $20 billion in gifts each year.
For donors to use good information we must make it easy for them. The more steps a donor has to take to get access to good information, the less likely she will be to actually use it. As much as possible, we need to have the information “near” the donor at those times when they make charitable decisions. If donors make decisions about their money when they are in the office of their financial planner or on their bank’s website, these are the times we need to have performance information available for them. When I look at my bank account on www.wellsfargo.com, I see tabs for “checking,” “savings,” and “investments”. There is no “philanthropy” tab. It’s time that changed. When an wealthy individual sits down with their financial advisor, that advisor needs to have access to good information about nonprofits so they can help the donor make a good decision.
As described in the last post, there are many different potential sources of meaningful information about nonprofit performance. But whatever the source, such information will be generally unfamiliar to donors. As it is, full-time foundation staff struggle with determining which nonprofits are most effective. So it’s crucial that information be presented in an organized, manageable, user-centered manner. It would be a revolution of responsibility to empower donors to make decisions based on performance (and to empower high-performing nonprofits to have a shot in an anecdote-driven market). Such a transformation demands patience with all players involved.