Charity by the Numbers, Not the Need

Ideas and Issues

pleasegiveNew Orleans    Buried in the flotsam of comments on Facebook’s Zuckerberg and his commitment to transfer potentially $45 billion into an investment vehicle that allowed him to make gifts, political donations, and direct investments or in other words letting him continue to spend his money anyway he pleases, is the continuing fashion of giving as less a gift, than an investment expecting a return. Columnists for The Wall Street Journal are unsurprisingly front and center applauding this movement. Jason Zweig favorably quotes John List, a University of Chicago economist, saying that donations should be managed the same way you would manage an investment portfolio. List says, “…you need to treat this sector exactly the way you would when selecting funds in your 401(k) or analyzing a company’s annual report.” We are now examining the beating heart of the one-percent!

So the philanthropic “investor,” following head, not heart, would consult sources that vet social change and nonprofits by the metrics and annual reports. They suggest Innovations for Poverty Action touting the standard that “whatever you can measure you should measure,” and we may presume, give accordingly. The International Aid Transparency Initiative is touted which claims to publish the costs and effectiveness of 350 charities. GiveWell in San Francisco is mentioned for its research of charities “to determine whether their programs are effective and posts its due-diligence reviews” on their website. Professor List, ever the Debbie Downer, horns in again with the scold that “probably less than 10%” count the beans closely enough to see if stuff is working.

Looking at the boards of many of these outfits, it is shocking to see how few have any real experience in the field building organizations, running projects, and trying to make stuff happen. In the tech and finance world perhaps the old adage that those who can’t do, teach, has become those who can’t do, measure.

And, what do you get by crunching the numbers? Not happiness, I can assure you.

I faithfully read and subscribe to High Country News on a weekly basis. It’s a newspaper that specializes in covering issues and developments in the Western states, and it does an excellent job of it, and has for forty-five years. It’s a 501c3. I’ve had close friends and comrades who have served on its board so not only do I trust its mission and work, I respect its governance and its numbers.

Following the fad of metrics, transparency, and accountability, just as the Journal, Wall Street, and Silicon Valley would advocate, High Country News recently sent to all subscribers its 2015 annual report, probably in hopes of boosting end of the year gifts. The profit-and-loss statement though was sobering. They recorded $2.7 million in revenue and spent slightly less than that, so that’s good news. Subscription and advertising revenue only made up 38% of the total income while 39% of the expense was taken up by fundraising costs, ad costs, subscription acquisition, admin and overhead. Grants and contributions in the research fund were 59% of the revenue and production and editorial content, the actual writing of the newspaper that convinces people like me to subscribe, were 61% of the cost. Throw into the mix another statement that the average print subscriber is over 50 years of age and on-line readers average age is pushing that, and this critical social enterprise is not only in trouble, but only sustainable at about one-third of its current operational size. So, sure we measured, and we found the work excellent, but the situation stone cold depressing.

What would the one-percenters do? If it was a Silicon Valley app, the hypocrites would plow in money even if it had no income at all – for years! If it were a Wall Street play, millions more might invest in the hope of a sale or a new product moving money from one pocket to another and skimming off the change. If High Country News was buying and selling real estate in the West, the one-percenters might flock to buy in, but not to hear about what it takes to protect and support the West.

Can a gift be reduced to a simple measure of dollars and cents? No way! We have to support what we need, love, and believe it, regardless of the numbers!