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Fallout: The Financial Crisis

Nonprofits keeping tabs on success

Marketplace Staff Jan 2, 2009
Fallout: The Financial Crisis

Nonprofits keeping tabs on success

Marketplace Staff Jan 2, 2009


Steve Chiotakis: This economic fallout is hitting pretty much everyone — unless you’re a recluse and keep your money under the mattress. You know what’s taken a particular hit? Charitable giving. And nonprofits, a lot of them, are competing for donor dollars. Sean Powers reports.

Server: Good morning everyone, welcome to Miriam’s Kitchen. This morning for breakfast . . .

Sean Powers: It’s a few minutes after 7 a.m. at the Washington, D.C. food bank Miriam’s Kitchen. About 150 people wait for a warm breakfast. Volunteers serve pancakes, chili, and fruit.

Server: And would you like grapefruit?

Guy: Yeah, uh huh, sure. Thank you, have a good day.

Miriam’s Kitchen has a budget of a million dollars a year, and a quarter of its support comes from local foundations and corporations. But as the economy tanks, some worried donors will use stricter guidelines to justify charitable giving.

Lester Salamon at Johns Hopkins University is studying how the financial crisis affects nonprofits.

Lester Salamon: The old expectation that nonprofits were simply trusted because they were nonprofits I think is giving way to increased demands that they actually demonstrate their effectiveness.

Salamon predicts that will cost them the funding they so critically need.

That’s a concern of Sara Gibson’s. She raises money for Miriam’s Kitchen. She’s noticed many donors now ask for evidence of progress. She knows how many people Miriam’s Kitchen feeds a year, but can she tell you how that changes peoples’ lives in the long run?

Sara Gibson: Well no, not at this point. That may not be possible, and it certainly is expensive.

As a result, Gibson says she’s more conservative about the donors she approaches.

Steve Gunderson with the Council on Foundations says donors should pursue other methods of evaluating progress. For example, with Miriam’s Kitchen, grant makers might want to observe and interview people the kitchen serves.

Steve Gunderson: I don’t think one model can fit all. And I think we need to be very, very careful that while we talk about increasing the impact and effectiveness of philanthropy, we don’t suggest that there is one metrics that can be used to evaluate every grant.

Gunderson says charitable givers and nonprofits should work together to identify the best models to track progress.

In Washington, I’m Sean Powers for Marketplace.

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