Four Steps to Successful Giving
November 27, 2018 By David Risher
In the next few weeks, you’ll hear from hundreds of non-profits asking for your support. They matter! Non-profits are helping address some of the world’s largest problems that haven’t been adequately addressed by market forces or by government intervention. But you might feel a bit overwhelmed. GuideStar tracks over 1.8 million tax-exempt organizations, every one of them gunning for your inbox and your attention.
After leading Amazon’s US Retail operation, I taught at the University of Washington, joined the board of a girls’ school, and chaired the board of an international school in Barcelona. In 2010, a friend and I co-founded Worldreader, a non-profit that has brought together technology, local content, and partnership to help millions read around the world. Along the way, I’ve learned something about how best to help non-profits achieve their mission.
As you sort through where and how to give this holiday seasons, here are four things to consider.
1. Look in the mirror to discover your cause.
Giving is expressive, so let it express what you care about. Don’t get too hung up on what’s popular, or what cause is grabbing headlines today. Instead, look inside yourself and perhaps back in your life to find clues about what you care deeply about. Have you always loved animals? Great — that’s a fine place to start. Do you hike every weekend you can? That’s a clue that environmental causes are meaningful to you.
For me, education and reading have made an enormous difference in my own life. As a child I spent Saturdays in a library while my mother shopped at Safeway; as an adult, I left a successful career at Microsoft to join a start-up internet bookstore called Amazon.com. At the same time, I’ve been a news-and-information junkie since the days that I would listen to the radio as I delivered newspapers in high school. My work supporting Worldreader is all about helping others fall in love with reading the way I have; my support of our local public radio station KQED takes my love of news and shares it with others.
2. Find an organization whose impact, scale, and leadership resonate with you.
You’ve got to do a little research, but don’t stress over this: it’s not hard. Spend 10 minutes on Google looking for organizations focused on your cause, and ask yourself: Which are achieving impact? Whose lives are they working to change, and are they achieving? And when I look at their leadership team, do I believe they have the skills to pull it off?
Measuring the impact of any non-profit is part art, part science. After looking over an organization’s website or annual report, you should come away with a fairly clear understanding of how they’re changing the world and what success they’ve had. In Worldreader’s case, we have a laser-like focus on unlocking people’s potential through reading — 10 million and counting — and on working with local publishers to make local stories available to as many people as we can.
Whatever you do, don’t forget to look at the people who lead the organization. Running a non-profit isn’t for the faint-of-heart. It has all of the challenges of running a for-profit organization, plus the added challenge of having to raise funds every year. As Jim Collins famously writes in “Good to Great,” organizations succeed only when they have the “right people on the bus.” That’s true no matter what organization you’re evaluating.
3. Calculate the organization’s efficiency by looking at their cost-per-impact.
Luckily, this is easy. Just look at how much the non-profit spent in its most recent fiscal year, subtract in-kind donations and expenses, and divide that by the number of people impacted in the same period. (Why subtract in-kind donations and expenses? Because you want to reward organizations that are good at getting as much for free as possible).
To give an example: Worldreader’s 2017 expenses were $9.8 million, including $2.1 million of in-kind expenses — free Kindles, reduced-price e-books, subsidized shipping, free online distribution, and so forth. That leaves $7.7 million of “cash” expenses. In the same period, we supported 2.9 million new readers — school-aged children reading on tablets, mothers reading with their new babies, and young adults finding self-help books on their phones. So in all, we spent $2.65 per reader, including everything from putting millions of digital books on tens of thousands of tablets to the expenses of training publishers to running all the back-end systems to make it all work seamlessly.
Of course, no one metric is perfect. But this one gives you a good overall feel for how far each of your dollars go towards having the impact you want.
4. How much should you give? Ask them!
Non-profit leaders are extraordinarily well-tuned to understanding their financial needs — they have to be. Look around their website for indications of what they’re looking for, but know that in most cases websites tend to be focused on smaller gifts. If you want to have a big impact, just ask them what they need.
One more thing: Imagine running a business in which you need to fundraise for your operating budget every single year. Think of the amount of time and energy that takes away from running the business. Welcome to our world. So if you want to be an impact super-hero, stretch to give more than they asked for, and consider spreading the gift over a few years. You’ll have an even bigger impact, and help the non-profit get visibility into their future finances, which in turn helps them think bigger and more creatively.
As a society, we ask our non-profits to take on some of the world’s biggest problems. And many non-profits have created extraordinary mechanisms to run financial support into positive change. Follow the steps here, and you’ll make a real difference in the world.