Best way to donate? Do your research

Holden Karnofsky, co-founder of GiveWell.net


KAI RYSSDAL: Lean times mean a lot of us are trying to stretch our budgets and, given the season, trying to stretch our charitable contributions Because as great as it feels to get, it can feel even better to give.

Today, as we continue our look at philanthropy, how we can put our dollars to work more effectively. If there's less money to donate this year, should you give your time and volunteer?

Holden Karnofsky is the co-founder of GiveWell.net. That's a nonprofit charity evaluation website.

Holden, welcome to the program.

Holden Karnofsky: My pleasure.

RYSSDAL: As people look to cut back in this economy -- and philanthropy's going to be one of those areas -- does it make sense to volunteer time instead of money?

Karnofsky: I would actually make a different suggestion. I would say that if you're finding yourself this year with more time and less money than you usually have, I would encourage you to put that time into researching and really thinking hard about where you're giving rather than volunteering. I think volunteering is often adverstised as being more than it is for a very specific reason. Which is that volunteering is often about recruiting donors. And so what I would say is that there is some volunteer work that's certainly valuable, especially if you have a particular skill such as . . . let's say you're a cleft palette surgeon and you're going over to perform corrective surgeries. But a lot of time, when a charity's asking you to volunteer, what they're really trying to do is get you involved, get you excited, and the real benefit to them is the donation anyway.

RYSSDAL: All right, well let's get to the econometrics here, then. How do I know what to look for when I want to maximize the charitable return on my dollar?

Karnofsky: Right. Well, it all depends on what you're aiming for. But the general advice I give is, I would just try and go out there and really push charities to say, "All right, what's the evidence that this is changing people's lives for the better?" And a lot of times programs that sound really good in theory just don't turn out to have the impacts you would hope for in practice.

RYSSDAL: There is obviously a set of criteria that you guys look at. What are the top couple? I would imagine it's administrative overheads versus amount actually given. It's staff versus volunteers -- those sorts of things?

Karnofsky: Actually, we don't like to emphasize the administrative-overhead aspect because we think that, for one thing, it's often a distraction. It doesn't matter how much money you throw at a problem if you're not doing a good job of it, and if you're not taking the right approach. And a lot of times taking the right approach means being able to measure what you're doing and learn from it. Which often, depending on how the accountants want to do things, gets classified as overhead.

So, we actually feel that when people insist that as many pennies of my dollar as possible need to go straight to the children, what they're doing is they're leaving out a lot of the overhead that's needed to hire great people, to do self-evaluation, to figure out what really works and to do a good job.

RYSSDAL: What about newer charities that are just getting off the ground and maybe don't have the data trail that will let you figure out whether they're worth it or not?

Karnofsky: Well, in my opinion, there's a lot of those charities out there that may be doing great work. And if you are close enough to one that you've really seen it and you're very connected to it, then that may be all you need to have a lot of confidence that they're doing good.

But, you know, if you're not in that position, and you're trying to find a charity that you can have confidence in that you haven't heard much about, I think it's the wrong approach to try and guess yourself which of these new, unproven charities really has what it takes.

I think you're much better off with a bigger, more established one. And I think that oftentimes in charity there's too much discussion given to the next, big, great revolutionary idea that's going to solve the root cause of poverty and not nearly enough attention given to, "Hey, what are the things that already work and how can we do more of them?"

RYSSDAL: Holden Karnofsky is the co-founder of GiveWell.net. That's a group that studies the effectiveness of charities and advises donors about them. Holden, thanks a lot.

Karnofsky: Yeah. My pleasure.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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The most critical volunteer position in a nonprofit is Board member. As in for profit businesses, the Board's job is to hold the organization accountable.

It's important to know about any non-profit organization your investing in. A big, well known nonprofit can be just as ineffective and unworthy of support as a little known start up.

Thanks for doing a series on philanthropy.

Holden Karnofsky's comments on measuring impact were right on--as the for-profit world has shown, analytics are key to measuring ROI and constantly iterating a product or service forward. Donors and funders (and volunteers) of social programs should demand metrics while supporting these activities in the same breath.

However, Karnofsky's comments on volunteerism are very disappointing. Providing time and skills is often more beneficial than giving money, and volunteering can help supporters better understand the work of the nonprofits (and thus make wiser investments). I must admit that I’m a bit biased as I lead a web-based nonprofit program called MicroMentor (http://www.micromentor.org). We make it easy for skilled business volunteers to mentor and advise lower-income entrepreneurs, who, in turn, build local businesses and provide local jobs (especially important in times like these). By channeling the expertise of volunteers to where it is most needed, we can have a much larger impact than if we were to provide this assistance directly. There are many other great skills-based volunteer opportunities out there as well, such as the Taproot Foundation and SCORE.

I would encourage Marketplace listeners to give back in whatever way suits them best.

I agree it is important that Non Profits be evaluated with regards to how effective they achieve their goals. But I believe that Mr. Karnofsky's new non profit web site is bankrupt in a number of ways. First, to discourage volunteering is just ah ... stupid. It is not simple about money or having good ratios of return. That act of volunteering is helpful to both the recipient as well as the receiver.

I was greatly disappointed and slightly angered by Holden Karnofsky's comments discouraging people to volunteer. As a volunteer manager for an arts organization, I was appalled at his claim that charities often advertise volunteer opportunities as a means of tricking people into becoming donors. In our current economic climate, jobs are being cut, and volunteers are needed more than ever. Monetary donations are of course valuable, but that does not mean the human contribution is any less important- does Mr. Karnofsky think the “meals on wheels” deliver themselves?
Americans are becoming very selective about where they donate their money, and non-profits like mine often fall last. Please, don’t do us any more favors by telling people on national radio not to help us in the way they themselves see most fit.

I find Karnofsky's response to the question, "Does it make sense to volunteer time instead of money?" deeply disturbing. The small non-profit I work for relies heavily on our thousands of volunteers to accomplish our mission. There is simply no way we could hire enough people to do what our volunteers accomplish. I know the same is true of food banks, homeless shelters, environmental organizations and other ngos across the country. If you have more time than money, please volunteer. You will make a real difference. If you later feel moved to make a donation, you will know exactly what your money is going to.


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