“No one has ever become poor by giving.” (Anne Frank – The Diary of Anne Frank)
We have a world demeaned and distressed by injustice, inequity, and inequality. It ranges from despotism and slavery through to poverty and homelessness, overcrowding to isolation, education for only the rich to no education at all. Despite the richness and diversity of our resources and increasing excellence of our technology, millions of people die every year of preventable causes –often relatively simple ones, such as lack of clean water supply, nutritional food sources or hygiene facilities.
Fortunately, there are many human beings who are concerned about these inequities and their, often horrific, consequences. Those people have formed organisations that aim to change or, at least, alleviate the situation in which victims of these events find themselves. Somewhat ironically, the massive increase in the number of charities over recent decades has created another set of problems that can and do affect how well aid can be provided to those in need.
This article will discuss the general perceptions of people to aid and charity organisations and some of the issues raised by the development of what might fairly be called a “charity industry”. A second article will examine a relatively new type of organisation that exists to evaluate the operation and effectiveness of charities.
Two types of organisation predominate in the charity sphere. Governments often set up, fund and manage aid agencies or provide subsidies and incentives to non-government agencies. Most non-government agencies and charities are funded by voluntary donations from the general public, business and sometimes a relatively minimal contribution by state or local government.
These organisations vary enormously in scale. At one end are the very large organisations and aid agencies. These comprise those funded and managed directly by governments or through government contributions to international agencies such as the United Nations and its various divisions. In addition, there are many non-government charities that operate on a national and international scale. Examples of large non-government charities are the Red Cross, the Salvation Army, World Vision and such.
At the other end of the scale there are many much smaller organisations and groups, often working locally to provide soup kitchens, overnight accommodation, aid packs, clothing, free clinical services and more. These groups will often be staffed solely by volunteers and even funded by those who provide the services. Other small organisations may focus on specific issues, such as Cancer, Diabetes, Mental Disability, Homelessness or Drug rehabilitation.
A third and not insignificant source of action and funding to combat the massive range of human problems is philanthropy. Indeed, it was largely through the actions of wealthy philanthropists that the charity movement – as we would recognise it today – was born in or around the middle of the 18th Century. The Bill and Melinda Gates Foundation is just one modern example of this type of philanthropic organisation. There are many others.
From the beginning of charitable movements, there have been considerable differences of opinion within government and within the population, as to whether “charity” or responsibility for the poor, should be provided by the state or by private contribution. That debate continues, though today it is generally accepted that there is a need for support to come from both sectors.
Whether aid and assistance to the needy and disadvantaged is provided by the state or through a charitable organisation, there is varied opinion among the public as to which recipients or issues are most deserving. It is also not uncommon for donors or potential donors to be sceptical of the likely effectiveness of some programs or even to suspect that funds may be misappropriated by corrupt officials or deliberate misrepresentation by a charity. Rebutting such perceptions is made more difficult because many charities are not transparent about the level of donations received or the ways in which they are spent, let alone whether they actually accomplish what was intended. Indeed, many programs have had no specific performance measures attached. Even if well motivated, a program with no specific goals or measures to determine effectiveness, is unlikely to evoke confidence of donors. Such programs are also far more open to abuse because of the lack of definition and monitoring.
Another commonly voiced concern is that of whether donations actually reach those people or programs that they are intended to help and what percentage of them provides direct assistance as opposed to being used for salaries, administrative, publicity and other costs. The recent call for a review into the US Red Cross regarding its use of $500 million raised for relief in Haiti following the 2010 earthquake, is an example of what can fuel public scepticism about giving.
It is valid for the public to have these concerns for recent decades have seen considerable growth in the numbers of aid and charitable organisations. Often there are many organisations working on identical issues. Some argue that this situation causes unnecessary duplication in administrative areas, facilities and staffing. They argue that this dilutes the effectiveness fundraising and also reduces the actual amounts available after other expenses to fund actual programs. Supporters of the diversity argue that it allows more specific focusing of aid and that, in any case, many charities do contribute to jointly funded programs.
The general consensus of charitable organisations is that their independence and diversity should be maintained. Although governments have generally not forced charities with a similar focus to merge, there has been a tightening of laws relating to the establishment of charities and their eligibility for tax concessions and the like. These actions have slowed the creation of new charities over the last two decades. Despite this tightening of legislation and increased transparency and monitoring of charity income and expenditure; many people remain concerned, as to the how, where and on what, of the use of donations.
A positive side to the increased scrutiny of charitable giving has been that it has stimulated discussion around giving and the evaluation of its effectiveness. Another result has been increased emphasis on “Effective Altruism”, which focuses on evidence based measurement of effectiveness and the direction of funds to those projects that achieve the most tangible effect (change or improvement) for the least cost. In the vernacular, it favours delivering the “most bang for the buck”. Effective altruism is certainly a valid and powerful concept, however some may argue that the extensive use of business principles and techniques, whilst effective at raising funds, also lends validity to commercial, profit focused techniques or practices that contribute to the very inequity that charities attempt to alleviate.
“Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness.” (Martin Luther King Jnr.)
Another, perhaps less contentious aspect of Effective Altruism is that it aims to promote an altruistic approach to life and work. It encourages people, particularly the young, to take an approach to their careers that, instead of focusing on financial reward, advancement or status, focuses on doing good. Effective Altruism encourages people to consider the rewards of working in roles that give to the community, either locally or overseas. The philosophy underlying this approach is that the intrinsic reward of giving offsets lower salaries and fewer benefits received by the workers. In undertaking such roles, at least for part of their career, those who follow this path gain better understanding of the World and the vast differences and inequities among and within populations. They also receive the benefit of training and field experience from their employers. The employers, in turn, gain from the enthusiasm and fresh eyes that the employees bring and because salary and associated costs are lower. There is thus a mutual exchange between employer and employee that, whilst providing benefit for each of them, also achieves a common focus on improved and more cost effective delivery of aid to those who need it. – A win, win and win, situation!
All of the factors discussed above have contributed to a much changed landscape in relation to charities and their operations. This is particularly true where those charities are aimed at alleviating endemic disadvantage, poverty, and relief from the longer term impacts of natural disaster or human conflicts.
A number of organisations now monitor and evaluate the administration of charities and their programs. The evaluation criteria and methodologies used by these organisations vary and there is debate about exactly which criteria are most important. Some charities still resist transparency but as more donors and potential donors learn of and turn to these “rating” agencies, those that don’t make information available are likely to receive reduced support. Charity Navigator , Give Well and Charity Evaluation Services are examples of organisations that evaluate and rate charities. There are many others.
The second part of this article will examine how these organisations undertake their ratings and the sorts of issues that their methodologies and criteria raise. In effect, I will attempt to evaluate the evaluators. – Watch this space …
“While we do our good works let us not forget that the real solution lies in a world in which charity will have become unnecessary.” (Chinua Achebe. Anthills of the Savannah.)