Interesting report from the US. First, it’s an amazing initiative. Second, we learn how to identify ‘bad’ charities from the fundraising channels they use. Finally, it gives interesting benchmarks such as that ideally only up to 35% of funds raised should be spent on overhead, not more.
Why this resonates with me is because I supported several charities before which turned out to be mismanaged organisations. The lesson I learned was to look at a charity’s financial documentation and business practices (such as fundraising channels used or how much of $1/ £1/ €1 goes to overhead) before committing any resources to them – time or money. However the problem is that for an individual donor finding and analysing this information is not easy. And why should they? You have to be very fired up about the cause to do it. The rest of us will continue to face a (high) risk of our donations being misused.
Which is why I feel like pulling my hair out when I hear about the ‘challenge of fundraising’. People do not give not because they are greedy, but because there is no transparency in the third sector. The larger and more respected the charity, like Unicef, the higher our, individual donors’ trust, yet it’s highly probable that (much) less of your dollar/ pound/ euro goes to the cause itself. The smaller the charity, the more the distrust factor. Hence the giving dilemma.
It’s not rocket science however. There are very few charities which get it right. To overcome the giving dilemma, your organisation should focus on building trust, being honest and transparent. For example, why not display easy to read and understand financial data and specifically how much from each $1/ £1/ €1 donated goes to the actual cause on your web site? I would go as far as explain on a very high level what overhead expenses there are. Actually do not just give data, create easy infographics and provide insight behind the data. Reassure donors by specifying top fundraising channels. Do the data digging for them so they don’t have to.
So often I arrive at the charity’s web site and it’s all quite standard – some cases, some projects, a couple of sad looking photos, lots of information about charity and trustees but! no information on the above. How do you want to get my money if I have no idea how you plan to spend it?
And here is another simple idea – a regular newsletter. Most charities still send it out twice a year. If I landed on your web site and I am not ready to donate, but ok to give you an opportunity to build a relationship with me, how can I do it if you will only communicate to me twice a year? In the age of Mailchimp, regular is weekly. Or monthly.
So there you go. Be honest, open, transparent to build trust. And communicate frequently and regularly about what you do. The only charity I have seen do this is Greenpeace. I keep looking…