The Three Cups of Tea scandal has highlighted many of the problems that face the nonprofit world.  More than 160 posts and articles have been written about the scandal.

Even so, one topic has received far too little attention: the wildly different scores that the Central Asia Institute, the nonprofit founded by the book’s author, Greg Mortenson, received from charity rating sites. Those big swings suggest that the rating systems we have in place today are much too weak to protect donors.

The philanthropy consultant Lucy Bernholz did take on the issue in a recent post in which she links to the American Institute of Philanthropy’s page criticizing the institute for its questionable response to requests for audited financial reports. The institute’s founder, Daniel Borochoff, also appeared on the “60 Minutes” segment that touched off the controversy.

The post also linked to Charity Navigator’s 4-star rating of the institute - which Charity Navigator amended with a donor advisory once the scandal broke.

Looking at other watchdogs, no clear trend emerges:

• The Better Business Bureau’s Wise Giving Alliance included only its standard statement “This charity did not provide requested information. As a result, the Better Business Bureau cannot determine if it meets standards.”

• On Great Nonprofits, which allows anyone to rate a nonprofit, the institute received all 4-star reviews before the scandal broke.

• GiveWell‘s site states that in 2009 it conducted a preliminary review of the institute, and it did not meet GiveWell’s criteria to merit further investigation or recommendations.

I also evaluated the institute on The Charity Rater, a system I developed to help donors, and it received a score of 19 percent out of a possible 100 percent.

What is the average person to do when two rating systems give Central Asia Institute four stars and three rating systems say that they can’t offer a rating  due to a lack of information?

The current system of rating charities is far too limited. Here are the key strengths and weaknesses of what we do today:

Crowdsourcing. Systems like Great Nonprofits allow charitable watchdogs to gather information from a wide variety of people and sources and they do not rely on information from the nonprofit, so those evaluations are only as good as the crowd.


Using information from the 990 tax form. These systems, like Charity Navigator, can evaluate lots of charities in a systematic way. But the information obtained is very limited and is often incorrect.


Requesting information from the nonprofit. Organizations like the American Institute of Philanthropy and GiveWell seek out lots of information to conduct an in-depth evaluation.  But they can’t do a thorough job if the nonprofit doesn’t cooperate.

It’s not just average donors who can’t find what they need. The Central Asia Institute received a nomination for the Nobel Prize, after all—and it got a large donation from President Obama. This high profile shows that very few people even turn to nonprofit rating sites to figure out whether an organization is reliable or transparent.

So how do we encourage—or force—more nonprofits to share more information? And how do we develop—and finance—accurate systems that do not require the participation of a nonprofit?

Discuss your ideas for the way forward in the comments section below.

The Central Asia Institute, the nonprofit started by Greg Mortenson, the author of Three Cups of Tea, has been criticized for the apparent lack of any evaluation of the work it did and the schools it constructed.

It is unclear how many schools the group built, how many of these buildings are actually used as schools, and whether the schools performed any better than existing schools.

In a “60 Minutes” exposé on the charity, which aired in April, reporters asked whether the organization had conducted any independent assessments of the effectiveness of its schools in Afghanistan. The Central Asia Institute’s governing board replied in a written statement, which “60 Minutes” posted on its Web site:

No. CAI is unaware of any organization qualified to undertake such a study. However, it is clear that the effectiveness of its schools and its programs have been independently assessed by citizens of Pakistan and Afghanistan, in that there are hundreds of requests for new schools in these countries as well as the programs CAI promotes. In addition, the Government of Pakistan has awarded Greg Mortenson the Star of Pakistan related to the promotion of education in that country. Review of test scores of the children at schools built or sponsored by CAI will reveal that the children at these CAI related schools score higher on average than students at other schools. Over the years, many independent observers have visited the schools.

This answer is immediately suspect as it claims that it has increased test scores, even though there are no data to back up the claim.

In addition, there is no shortage of people who are qualified to evaluate its schools. The book More Than Good Intentions describes a number of research projects that provide measures of key factors that lead to student and teacher success. These projects measure the effectiveness of a number of common efforts. They include:

• Purchasing school uniforms
• Paying students to attend school
• Providing deworming pills for students
• Providing bonuses to teachers who showed up to teach
• Using cameras to record teacher attendance
• Breaking students into classes based on their skill level
• Providing small-group tutoring for struggling students

The book explains in detail how each of these programs was tested to determine if it had its intended impact. The findings can help guide nonprofit and government programs.

These and similar studies would have helped the Central Asia Institute determine which type of assistance had the greatest impact on the educational success of students. But instead of seeking research findings or conducting evaluations of their work, the organization has spent millions of dollars based on assumptions. I’d be curious to find out if there is any study out there that proves that the lack of a building is the biggest impediment to education.

The Three Cups of Tea controversy should be a wake-up call to all nonprofit governing boards. It takes far more than feel-good stories to prove results. The Central Asia Institute is not alone in being unable to prove the impact of its work. Thousands of other nonprofits would find themselves in the same position if their organizations received the same amount of scrutiny.

One of the best things that could come out of this scandal is an increased focus on understanding and measuring the impact of nonprofit projects.

Inevitably, after each disaster a reporter will ask me if enough money or perhaps too much money has been donated. My answer is always the same—some organizations will have too much money and other organizations will have too little money. Often it’s not the amount but the distribution that’s the problem.

Here’s how it works: Charitable donations are the greatest in the first few weeks after a disaster, while it’s still making news headlines.

Nonprofits know this, and many of them immediately issue appeals and create advertisements for their disaster response. But this is all done before anybody knows the extent of the disaster, the capacity of the local government and nonprofits to respond, and which other nonprofits are responding and what their capabilities are.

In other words, they raise money in a vacuum.

With each passing disaster, more and more organizations raise money. This leads to intense competition between organizations for donations. Those with the biggest name recognition and the most eye-catching advertising, or those that are on the most lists of “How you can help” or that have the best celebrity endorsers, get the most donations.

The local organizations that are in the midst of the recovery efforts and are working 24 hours a day nonstop have a much harder time raising funds. Many of these groups also have Web sites that are in foreign languages, or they are unable to accept credit-card payments.

In turn, too much money is being raised to support groups that provide things like boats or orphanages, while too little money is raised for help with legal issues or assistance to the elderly. There may be too much money raised by organizations that are incompetent and too little money raised by competent ones.

In the Haiti recovery efforts,  somewhere between 1,000 and 10,000 organizations are responding—no one knows the actual number. This makes coordination extremely difficult, increases the chances for gaps and duplication of aid, and makes it impossible to monitor the work of each organization to ensure that programs are done well and don’t do any harm.

The March 23 situation report for Japan from the U.N. Office for the Coordination of Humanitarian Affairs says that 670 nonprofits have offered their assistance to provide help following the recent earthquake and tsunami.

This probably means that all 670 of those groups have already raised money for the recovery efforts. And many of them have done this without a clear request for assistance or without identifying local groups to support.

The most recent situation report makes it very clear that Japan is going to allow only very limited international assistance.

So what are all the international charities that raised millions of dollars going to do with all of the money? Here’s a statement from Oxfam Japan:

The Japanese state has the means to reach 99 percent of the population, but there will always be some who need more specific assistance.

And here’s a quote from the president of InterAction, a Washington coalition of organizations that work overseas:

When Hurricane Katrina struck America in 2005, many of the victims of that disaster were comforted from the emotional and monetary support that came from abroad. Just as in Hurricane Katrina, there will sadly be thousands of people who will likely fall through the cracks of Japan’s social security net. Japanese civil society, with funds from U.S. and other donors, will help fill that gap. That is where the generosity of the American people and many other nations, make a difference.

So it sounds like the 670 nonprofits that have raised millions of dollars in donations for the recovery efforts will have one of three choices.

If they are allowed, they can compete to provide assistance to the 1 percent of the victims who fall through the cracks. They can try to find local organizations to support, which may mean extra layers of unnecessary bureaucracy and extra work for the local organization to please the group providing the money. Or the organizations may decide to use the money on other disasters or to cover general organizational costs. Some of these groups will be very upfront about this, and some of them will hide it in the fine print.

The system is not working. It’s far too opportunistic and does not ensure that money arrives where it is needed the most.

Personally, I’d like a centralized system for raising and distributing money. A general fund would be created that people could give to immediately instead of to individual nonprofits. It could operate much like the United Nations Central Emergency Response Fund or the Disasters Emergency Committee appeal, a collaboration of nonprofit groups.

Contributing to a centralized disaster fund would give donors a way to show solidarity with the disaster victims.

Ideally, the money could be distributed by either the government or a coordinating body to ensure that donations go to where they are most needed rather than to whoever can raise the most.

This would potentially help local organizations get the money they need and provide a measure of control over nonprofit work. It would also mean that if all the funds are not needed, they could then be used in disasters that do not get the same media coverage and the same level of financial support.

Some people will argue that the United Nations central fund is too slow or that it favors larger organizations over smaller ones. Both of these are fair criticisms. But then I ask for suggestions on how to create a better system, because this repeated scramble for donor dollars is just not working.

It’s natural to want to give immediately to Japan’s recovery efforts. With all the destruction wrought by a major earthquake, tsunami, and nuclear power plant failing, it would seem the Japanese could use all the help they can get. So my suggestion is going to seem counter-intuitive, but I agree with GiveWell’s recommendation:

“At this point we strongly recommend holding off on giving to this relief/recovery effort.”

And Brigid Slipka’s decision:

“So here’s what I’m doing: I’m taking that impetus to give and pulling out $100.  Then I’m putting it aside for a month or so.  After a bit more information is out there, I’ll figure out where and how to give.”

The reason I suggest donors wait is because Japan has thus far only allowed/requested very limited international assistance.

“The Government of Japan has received offers for assistance from 91 countries, and has accepted assistance from about 15 countries based on assessed needs, which is mostly specialized international urban search and rescue (USAR) teams and medical teams.”

If you read the fine print in most nonprofits’ appeals for this disaster, you’ll see phrases such as: “prepared to assist,” “readying a team,” “stand at the ready,” “assessing the situation.” But few have actually deployed staff. And there is the very real possibility that many of the organizations collecting donations for the recovery efforts might not be allowed to operate in Japan.

There’s a good reason for this. Just because a major disaster has occurred does not mean that the country is not capable of responding on its own. Just as Chile was able to respond to its earthquake far better than Haiti has been.

While it might seem like the more organizations helping the better, it’s not actually true. Having organizations pour in from all over the world, with different regulations, priorities, donors, and governing boards can lead to confusion, duplication and gaps in assistance, and a slower response.

After the 2004 Indonesian tsunami, the flood of aid organizations and people arriving to help was often called “the second tsunami.” It was like the Wild West, very chaotic, and no one knew what anyone else was doing, which was why I was brought in.

Trying to get organizations to coordinate and cooperate was like herding cats. Haiti faced even more problems with the large number of nonprofits operating in Haiti—1,000, 4,000, 12,000, many more than 12,000, according to different estimates.

While coordination after disasters continues to improve, some major issues and roadblocks remain. I’ve often felt that if a country has the resources to coordinate, monitor, and guide the work of hundreds of aid organizations, then it has the resources to just handle the relief efforts themselves.

Another common issue after disasters is the competition for space in airports and seaports to bring in staff and relief supplies. There can be some major problems getting goods into port and then clearing them through customs. Goods that are not properly cleared and moved away from port quickly clog the damaged ports. Limiting the number and types of organizations allowed to assist reduces problems and critical delays at the ports.

Problems can even arise when one organization collects donations for a sister organization. For the sake of this example, let’s call them Organization USA and Organization Japan. Donating to Organization USA is generally not the same as donating to Organization Japan, even though they’re sister nonprofits. This is because Organization USA has the responsibility to ensure that the donations it receives are spent properly. To do this, a group will often hold back 10 to 20 percent of what it collects to pay for monitoring the work of Organization Japan. Organization USA may require Organization Japan to do certain types of projects it wouldn’t otherwise do, or Organization USA may require special financial or project reporting from Organization Japan. This extra layer of bureaucracy can be very unappealing and even burdensome to Organization Japan.

It might be preferable to Organization Japan to turn down donations from Organization USA and instead just work with the money it raises on its own. So even though Organization USA is raising funds for the recovery, they may not be accepted by Organization Japan.

Right now, from all accounts, the Japanese government is doing a good job of leading the relief efforts. It’s wise to give it time to assess the needs and determine which organization can best meet those needs. Once a nonprofit has official permission to work in the country, then donors should send their money.

Also, consider donating to Japanese nonprofits. They’re just as capable as U.S. ones and it cuts out that extra layer of bureaucracy and expectations.

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Related Articles

“Aid Groups Temper Their Contribution” - The Wall Street Journal

“Asia Views—Should We Be Donating to ‘Rich’ Japan?” - AlertNet

“A Charitable Rush, With Little Direction” – The New York Times

“How Do We Help Japan?” - UN Dispatch

“How UK Charities Are Helping Quake-Hit Japan” - BBC

The following is a series of do’s and don’ts to help you make the best donation decisions after a disaster.

Do determine if the country is accepting international assistance
With all the photos and videos of destruction on the evening news, it may seem impossible that governments would not want outside assistance. However, just because there has been a disaster does not mean that the local government and local aid organizations are not capable of reaching and helping those in need. Before sending your donation find out what, if any, assistance the government is allowing. Check to see if the aid organization you’re considering donating to is offering that same type of assistance.

Do look at a variety of nonprofits before giving
There are hundreds of organizations that respond to most disasters. Take the time to evaluate a few before giving. Also, just because they have name recognition does not mean they’re best able to respond to the disaster. Look for organizations that were operating in the country before the disaster, they will be able to respond quicker and know the local culture, politics, and needs better. Giving to local organizations is great. Unfortunately, local charities that operate in foreign countries can be difficult to find and may not have a Web site. If they do have Web sites, they are often not in English.

Places to find lists of organizations involved in the recovery efforts include:

InterAction for many U.S. organizations
Reliefweb.int for organizations from many different countries
Dochas for Irish aid organizations

Do look for organizations with prior experience and expertise
There is a great deal of money given by donors after well-publicized disasters. The ease of raising money makes it tempting to respond even if an organization does not have prior experience in that area. After the 2004 tsunami, many organizations with no prior experience built boats or houses. I attended one  ceremony where the boats actually sank during the ceremony because they weren’t properly sealed. There is a steep learning curve when nonprofits move out of their normal area of work. This may lead to mistakes and wasted money. Make sure the organization has prior experience in their proposed projects.

Don’t donate to a project just because it’s “sexy”
Recovery projects that are inherently attractive to donors – such as orphanages or boats – are easier to fund but may not be what is most needed. After the 2004 tsunami orphanages were built in excess of what was really needed, I had an orphanage approach me looking for orphans to house. So much money was given to orphanages in Indonesia that some families resorted to abandoning their children at the orphanages because they could not feed and clothe them. It would have been far better if the donations had supported families so they could care for their children themselves.

Don’t earmark funds
An organization on the ground has a far better idea of what is needed the most than someone who lives half the world away. Earmarking funds may force an organization to spend money where it’s not needed and keep it from funding the projects that are needed the most. After the tsunami in Thailand, one organization had money earmarked for two truckloads of rice. By the time the group arrived in the area four months after the tsunami, shipments of rice were no longer needed. Because the money had been earmarked, the organization had to contact donors to get permission to use the money in different ways. If you trust the organization, allow it to make professional decisions on how to best use your donation, if you don’t trust them then find another organization to donate to.

Don’t evaluate an organization based on the amount spent on its administrative costs
The amount an organization spends on administration offers no indication of its quality. The pressure to keep administrative costs low may lead to organizations under staffing their projects or hiring unqualified staff that may not have the skills to do their job. They may give their staff  the tools and resources needed to do their job well. Or they may focus on inherently cheaper programs even if they are not what is most needed. Additionally, project costs and administration costs are easy to manipulate.

Do ensure that the agency is legitimate before giving
Several fake charities were created after the 2004 tsunami. In Thailand a man took photos of houses under construction and then posted the pictures on his own Web site saying that it was his organization’s work. Donors should verify that the nonprofit is real before giving. Google the exact name of the organization—be careful that its hasn’t used a name that is almost identical to a well-known charity. If the organization has been in operation for a while, there should be a history of information about it on the Web, including links to newspaper articles written about the group, or meeting minutes.

Donate only through the organization’s Web site to ensure you aren’t giving money to someone sending out a sham e-mail or creating a fake Facebook page.

Don’t expect the funds to be spent immediately
After most disasters, the initial relief phase includes search and rescue, as well as providing immediate medical care, food, water, and shelter. After that, a much longer recovery and reconstruction phase begins. Organizations that feel pressure from donors to complete their work quickly may try to speed their work by cutting corners, leaving aid recipients out of the decision making process, avoiding coordinating with other organizations, or ending projects before they’re able to survive on their own. In Thailand, there were numerous instances of houses being built before the land title was cleared requiring litigation, some families faced loosing their houses a few years later. Allow the organizations adequate time to ensure they are providing help in the best way possible.

Do consider holding off some of your donations until later in the rebuilding process
Immediately after a disaster is prime fund raising time for nonprofits. As a result, appeals are issued before there’s any clear idea of what is needed or how much they can actually help. If an organization receives more money than it can use for the type of help it provides it has one of four options. It can divert the excess funds to other programs in other countries, it can provide assistance in excess of what is actually needed, it can move out of its area of expertise and do projects it’s not skilled at, or it can subcontract other agencies to work in other areas. Rebuilding after a disaster takes years, waiting a few weeks or months before donating everything you plan to give will allow you to make additional funding decisions once the situation on the ground is clearer.

Don’t take up a collection of goods to send over
After the tsunami, tons of used clothing were donated, much of it inappropriate to the climate and culture. There were winter hats, coats and gloves donated to southern Thailand and mountains of donated clothing dumped beside the road in India. Donated goods can clog ports and prevent more critical relief items from getting through. Ports can only hold and process so many goods and often the port authorities have difficulty sorting through everything arriving to get it processed. Please do not take up collections of medicine, clothing, baby formula, or food for shipment, or show up on your own to hand out money or goods. Although well intentioned, this can actually make the situation worse as it adds to the confusion, diverts resources, and may lead to aid dependency.

Don’t go over individually to volunteer
Many people want to volunteer, however unless you have a specific skill and speak the language, there is often very little you can contribute that local people could not do. Local people need the work as many of them lose their livelihoods in the disaster. Even if you have a specialized trade, your credentials may not be recognized in that country. In addition, you will likely not find an international charity able to take you on because of liability issues and the fact that you don’t have prior disaster experience and training. Small local organizations may be willing to use volunteers, but their needs are for Web site developers or grant writers. Your chances of working in the villages are small unless you speak the language and understand the culture.

Do consider donating an equal amount of money to disaster preparedness programs
Programs that help communities prepare for and respond to disasters save more lives and are more cost effective than large rescue operations after a disaster. This becomes even more important with the increasing rate of natural disasters. After each disaster, the first people to respond are neighbors, friends, family, and local disaster-response teams. Consider donating to organizations in other countries — or even your own home town — that help communities prepare for and respond to future disasters.

Don’t support any adoptions or evacuations of orphans
After each disaster, there are attempts to adopt or evacuate orphans. However, many of these “orphans” have parents or other living relatives desperate to care for them. Priority should be placed on efforts to reunite children with their relatives. Evacuating the orphans from the country or putting them up for adoption may forever separate them from their family.

Don’t assume there is a body overseeing and regulating the aid
Most people assume that some entity, probably the United Nations, oversees international aid to ensure that it’s well done and getting where it is most needed. In reality the UN has no direct control over nonprofits, which makes it difficult to coordinate the relief efforts and ensure all the aid provided is appropriate an well done. Two attempts to create a regulatory body have failed. Without this, it is up to the government hit by the disaster to monitor and control the flood of assistance into their country. This can be impossible for many local governments. The best way to stop ineffectual or bad aid is to only donate to organizations that you are certain are competent and skilled at their work.

Do take the time to make informed decisions
Take the time to understand the situation and make educated decisions. There are many resources here to help you do that. Your decision as to which nonprofits receive your donations matters.

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Related posts

HOW YOU CAN HELP – Dochas Network

Sometimes, you need to do something

Children in Emergencies: Applying what we already know to the crisis in Haiti

Chile may not need or want foreign assistance

Why are there so many natural disasters lately?

Posts linked to in this blog

If this were your child – Haiti orphans

Does funding orphanages create orphans?

Don’t earmark you donations

The Burn Rate

Don’t go to Haiti

Don’t choose a charity to donate to for Haiti based on administration costs

6 questions you should ask before sending donated goods overseas

Four reasons to NOT donate baby formula overseas

Donating medicine to Haiti

Guideline #2 for volunteering overseas

Guideline #4 for volunteering overseas

The Problem with Stop and Droppers

Following my recent post, the Robert Wood Johnson Foundation sent me a copy of its anthology, “To Improve Health and Health Care.” The first four chapters are devoted to failure and learning from our mistakes. The foundation also publishes this information on its Web site so that everyone has access to what it has learned.

I’ve enjoyed the candor in the foundation’s self-evaluation.

The authors even admit that they haven’t yet perfected the process: “The foundation is striving to develop a culture whereby the staff and board learn from the results of its programs, both positive and negative, though foundation staff members candidly confess that there is a long way to go.”

The first of the four chapters discusses the root cause of program failure, which always boiled down to one of three problems:

1. Strategic design flaws
2. Difficult environmental context
3. Faulty execution

The foundation then provides five lessons from its failed projects:

1. Manage your expectations.
2. Clarify objectives and strategies.
3. Focus on goals but remain strategically flexible.
4. Monitor and assess programs.
5. Deal with programs that don’t meet expectations.

I encourage anyone who is interested in this topic to read more. After all, as the Robert Wood Johnson Foundation says in its book, “We have chosen to avoid the word ‘failure’ since even programs that do not work as expected can provide valuable lessons and directions for the future. … Failure occurs when lessons are not learned or communicated to others.”

Admitting failure is the first step, learning from it is even more important.

I know that aid workers and nonprofit fund raisers have different jobs and different professional needs. And I know that only a small fraction of nonprofits work internationally. But shouldn’t there be at least a little overlap between the fund raisers and the field staff? In theory we all have the same end goal in mind, so a greater mutual understanding might help reduce some of the problems that regularly occur.

Richenda Ghebrial-Ibrahim, who works with social media for World Vision, wrote a post on her blog Thinking Out Loud that eloquently explained “Why Fundraisers Should Read Development Blogs,” and she’s given me permission to cross-post parts of it here.

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Why Fundraisers Should Read Development Blogs

I have a confession to make: Although I am a fundraiser/marketer/communicator I am also a development groupie. “A what?” you ask. Well … I spend my free time reading the books and blogs of development practitioners; some are experts. Which is why Linda Raftree’s recent post on “Why Aid and Development Workers Should Be Reading Blogs” [adapted from Dave Algoso's post "A Grad Student's Guide to the International Development Blogosphere] has compelled me to write this post; as the circle of beneficiaries is not limited to development workers [and grad students] alone.

Fundraisers: I know what you’re thinking: “I have enough on my plate. Deadlines. Targets. Pressure. Emails … How can I squeeze this in?” I encourage you to make time, even if it means shuffling your Facebook time to blogs. It will make you better at your job. Here’s why:

You will better understand your “product.” Every good marketer understands that to best promote your product, you need to understand what you are selling. Although I hate using these terms (it demeans and simplifies the work and people we partner with), development blogs can teach you an endless amount about your “product.” Eliminating poverty is not easy or fast. It’s not something you will learn in a day/month/year. The context is ever-changing, complex and unpredictable. There is significant theory, applications/case studies to learn from and, similar to social media, you need to follow the experts and trends to stay relevant. Even though I have been mentored by aid veterans for years, I learn something new every day that compels me to re-think what I am doing and challenges me.

At World Vision Australia, new staff complete a class entitled Why Is That Child Poor?, an overview of poverty alleviation through lessons from aid and development experts. It’s an excellent course, but in two days the quantity of information can be overwhelming, especially to a novice. Reading development blogs is a natural extension to a course like this. You continually learn and process information that will help you to best understand your “product” and to keep your strategies relevant to the context you’re raising funds for.

Donors want more. Those compelled to truly make a difference have (mostly) become apathetic to the elevator speech about “simple” solutions to poverty. Donors are hungry for more information and want to know where their dollar-a-day is going. I have daily conversations with donors on this topic. So far, we have only scratched the surface in explaining sustainable community development and disaster relief. Development blogs are a treasure chest of information that explains both.

Additionally, our lack of explanations of the complexities of development has driven some donors away from community development (a “hand up”) and toward direct benefits (a “hand out”). Case in point: undesignated funds. Many donors are skeptical and resistant to give to this type of funding because it appears to lack accountability. Many [international nongovernmental organizations] have completely failed to explain the value, impact, and flexibility of this type of funding. Instead, donors give elsewhere because they know exactly where their money is going rather than deciding where it can be used best. And why wouldn’t you!? Use development blogs to better understand the complexities of development. Then use your marketing brilliance to share these insights with your info-hungry donors.

You’ll stay current in your own field. Many prominent development bloggers cross lines between community development and new-media communications. They give commentary on a multitude of marketing campaigns, communication techniques, donor promises, and emerging [international nongovernmental organizations]. I find it far easier to understand what my peers are doing via these blogs than through my own means. It was through these bloggers that I first heard of 1MillionShirts and of Save the Children’s The Lottery of Life campaign. Even if you don’t agree with some of the commentary, it’s wonderful to have access to consolidated information on the latest marketing campaigns.

Disclaimer: expect cynicism. These are not warm, fuzzy blogs. They are more critical toward fund-raising efforts than they are praising. Personally, I believe this is because many of the campaigns they critique are ones that trivialize their work and the people they aim to help. That said, do not allow their critical stance to discourage you from engaging with the writers directly. I have found all bloggers to be approachable, considerate, and affirming. Whenever I have had questions (even ones I thought were stupid), they have been an incredible resource and I value these relationships immensely.

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If Richenda and I have convinced you to try reading a few development blogs, you can find great lists of blogs in the links posted above, and you’ll see many overlaps with Owen Barder’s list.

This is the third in a series of audio interviews I’ve recorded with help from Utah Public Radio with experts who are examining the recovery and reconstruction efforts in Haiti one year after the devastating earthquake.

Today’s podcast features an interview with Nigel Fisher, the humanitarian coordinator for the United Nations in Haiti. Mr. Fisher discussed efforts by government and nonprofits to coordinate their relief efforts following the earthquake and the challenges relief agencies will face in Haiti in the future.

The podcast also includes a discussion via Skype with Karl Jean-Louis, the executive director of Haiti Aid Watchdog, who discussed the challenges of holding aid organizations accountable.

Misconception No. 4: Low administrative costs are a good indicator of the quality of the organization

According to Money for Good, the amount spent on administration costs is the number one item that donors look for when deciding whether or not to give. The problems caused by the incessant need to keep overhead at a minimum are well laid out in the Stanford Social Innovation Review’s article “The Nonprofit Starvation Cycle.”

This misconception is probably the hardest one to break for two reasons. First, many charity rating systems use overhead costs as one of the primary factors in determining nonprofit scores.

I hope with the pending release of Charity Navigator 2.0, which uses indicators of effectiveness and results, more rating systems will decrease their emphasis on administration costs in determining nonprofit scores. Administrative costs are used because the Form 990, the informational tax form charities submit to the Internal Revenue Service, is the only paperwork that nonprofits are required to submit annually, thus it is the only standardized information available on charities.

Second, nonprofit groups actively reinforce the misconceptions when their Web sites tout their low administrative costs. Most have spending pie charts or administrative-expense percentages placed prominently on their home page. If charities want donors to stop putting so much emphasis on administrative costs, they need to stop using it as a marketing tool.

The misperception about the importance of administrative costs is another factor leading to the proliferation of new nonprofits and people flying to another country to help directly. Giving money or used clothing to your friend, neighbor, or church to fly to another country and hand out his or herself appears to be far more effective than donating to an established charity.

What message is your organization’s Web site giving donors?

Instead of focusing on low administrative costs, share information on the importance of those costs. Here’s a great quote from the joint statement issued last year by several charity watchdogs:

“While the idea of sending money ‘straight to the beneficiaries’ is tempting, nonprofit experts agree that judging charities by how much of their money goes to ‘programs’ is counterproductive. ‘Achieving a low overhead ratio drives many charities to behaviors that make them less effective and means more, not less, wasted dollars,’ says Paul Brest, President of the Hewlett Foundation, and co-author of Money Well Spent.”

Another good resource to share with donors is the Stanford Social Innovation Review article, “The Nonprofit Starvation Cycle.”

What sort of information does your organization share with supporters about its overhead costs? Share your approach in the comments space below.

Misconception No. 3:  Nonprofits don’t have any operating standards to follow

In recent years, a lot of good tools and guidelines have been developed to help nonprofits improve their practices and their professionalism. Here are just a few of them:

• The Sphere Project. Launched in 1997 by a group of humanitarian nonprofit organizations and the International Red Cross and Red Crescent Movement, the Sphere Project is a set of standards to guide nonprofits as they respond to disasters.
• Good Enough Guide. A product of the Emergency Capacity Building Project, the Good Enough Guide contains guidelines on how to be accountable to local people and measure program impact in emergency situations. It includes tools to help charities assess the needs in those instances.
• People in Aid Code of Good Practices. People in Aid was created by humanitarian and development organizations to improve management and human-resources practices.
• HAP – I (Humanitarian Accountability Partnership International). HAP has its roots in the joint evaluation of the Rwanda genocide, which highlighted the need for greater accountability by humanitarian organizations. HAP-I is an international self-regulatory body focused on improved accountability practices.
• InterAction Private Voluntary Organization (PVO) Standards. InterAction is an alliance of U.S.-based international charities that serve poor people in the developing world. The PVO Standards define the financial, operational, and ethical code of conduct for its members.

While many organizations use these tools and follow these guidelines, they rarely refer to them on their Web sites. This adds to the general attitude by donors that anything goes, and it puts good organizations in direct competition with fly-by-night charities. It also decreases the quality of aid as each new organization will end up making the same mistakes because they’re unaware of existing resources and standards.

The Nurse-Family Partnership does a great job of providing its donors with research, evaluations, and information on public policy. Links to all of these are featured prominently on the home page, making them readily accessible to even casual donors.

Does your organization tell its supporters about the standards it follows in carrying out its work? Tell about it in the comments space below.