The One Thing You Need to Know Before You Donate to Charity

This post is part of a collection of blog posts responding to the question “What is the one thing you need to know before donating to charity this holiday season?” posed by Nathaniel Whittemore on the Social Entrepreneurship blog on

Before donating to any charity you should be able to answer two simple questions 1) “What is this nonprofit’s strategy for affecting the cause they are working on?” and 2) “How is this nonprofit different from other nonprofits working on the same cause?” It might seem like I’m setting the bar really low with these questions. But I believe that if most people asked themselves these two questions, the nonprofit sector would be radically transformed.

Let’s take each question in turn:

  • “What is this nonprofit’s strategy for affecting the cause they are working on?”: Most people give to charity because they support the cause the nonprofit is focused on. So people give to Goodwill because they want to help people who are financially disadvantaged. Or they give to the Sierra Club because they care about the environment. Answering this question makes the donor reflect on the fact that their gift will support an organization, not be magical transformed into “support for the cause.” If you can answer this question, you’ll know what the organization is actually trying to do.
  • “How is this nonprofit different from other nonprofits working on the same cause?” All good nonprofits should be able to offer a good pitch for why they have an attractive strategy for affecting their cause. So the second question you need to ask focuses on what makes this nonprofit different. For instance, both the Greenpeace and the Environmental Defense Fund focus on the cause of protecting the environment. But while the Environmental Defense Fund seeks market-based solutions and partners with corporations, Greenpeace works towards “exposing the dirty secrets of corporate polluters like Exxon” and organizes protests. By asking a couple of nonprofits working on a given cause how they are different from each other, you will begin to figure out which nonprofit you want to support.

In an ideal world, a donor wouldn’t just get the answers to these questions. They would also validate whether the strategies being offered by each nonprofit actually works and determine if each nonprofit was achieving its goals. But unfortunately, most donors today do not have the capacity to validate how effective a nonprofit actual is or track their progress towards goals. But donors do have the capacity to change the way they make donations from a process that focuses on The Cause to one that focuses on The Organization to whom they are actually writing the check.

Philanthropy is about supporting organizations. Every nonprofit in the country is an organization that offers to take your donation of time or money and transform it into a specific type of impact on the cause you care about. So before you make another donation, ask yourself what strategy the nonprofit you are considering actually deploys and how its strategy is different from other nonprofits.


  1. Matt says:

    “But unfortunately, most donors today do not have the capacity to validate how effective a nonprofit actual is…” Out of curiosity, are you speaking to the capacity of individuals (i.e., simply not knowledgeable enough, nor interested in becoming knowledgeable enough) or the tools available to individuals that enable them to successfully assess the viability of a strategy?

  2. Good question Matt. Primarily I was referring to access to tools and professional research. I find it unlikely that individual donors can properly evaluate a nonprofit on their own, just as individual investors are not able to effectively evaluate a stock to buy unless they have access to standardized data, professional research, industry and market level commentary, as well as books and other educational material on stock picking.

    This isn’t a slight to donors’ intelligence. It is just unreasonable to believe that non-professionals could readily evaluate organizational effectiveness and program impact without a robust industry to assist them.

  3. In today’s very uncertain economic times, I think that another key factor, in addition to the “correct strategy” question, which is a good question – “Is this non-profit still able to attract the resources it needs to be successful?”

    There are plenty of examples of this in terms of just general corporate support, and I really feel sorry for the people that trusted their funds to Bernie Madoff, and the non-profits that have already had to close because of that fact.

    I forget the author, but the phrase from the book about networking comes back == “Dig your well before your thirsty.” So in the non-profit version, is it diversified enough, and have enough small donors that it can survive the loss of some of its big corporate ones?


    Bill Huddleston
    Advocate for workplace giving — “the Johnny Appleseed method of fundraising” — it takes time, but if you plant enough seedlings, it will help fund your non-profit for years.

  4. John C. McGee says:

    Sean some very interesting points, however you appear to make some significant assumptions in stating what should be available to the public. Those assumptions are centered the charitable/non-profit organizations ability to produce those metrics and make sufficient information available to donors.
    If you examine small, local organizations you might question whether many of them can produce the analysis necessary to have available for donors the answers to your questions. There may even be questions as to whether they understand the need to produce this information or make it available to the public. Even with legislation and tax forms that necessitate or facilitate public disclosure of information, some organizations do not understand the need let alone the requirement to make such disclosures.
    If you examine national/international organizations with chapters or affiliates, you assume a consistent effort between the expressed goals of the national/international organizations and the entities in the field. Therefore, if one wants to make a donation to a local affiliate of an organization that files a consolidated tax return, how would they find the information?
    What I have found interesting in the on-going debate about the need and methodology of rating non-profit organization is the underlying assumption that all organizations have the skill and knowledge to produce the metrics necessary to meet the rating criteria. I do not believe that is valid.
    Granted you acknowledge “in an ideal world” these things should happen. Second there appears to be an assumption that a ‘charity’ and a non-profit are interchangeable concepts? Considering the world-wide debate on this issue, I am not convinced they are.
    I do agree that if all non-profits of whatever stripe could answer the questions you posed and make that information available in a form that donors could easily access, donor-non-profit relations would change significantly. What I think you left out of your comments was a statement of how the relationship between donor and organization is a partnership that flourishes on trust and transparency driven in part by the questions you started your comments with.

  5. Thanks John. While I realize that not all nonprofits can answer these questions, I do think that donors should only give to those that can. The questions I posed do not require a quantitative answer. They are questions about strategy and competitive advantage. I don’t see any reason why a capably managed nonprofit couldn’t answer these questions on the spot without reference to detailed data.

    I do agree completely regarding transparency and trust. That’s a topic that I’ve written a lot about.

    Regarding nonprofit vs charity. These words are interchangeable in the US. However, I have written in the past about whether the names make sense.