October 03, 2008
Silver Lining in Economic Turmoil
Charity Navigator, a nonprofit watchdog group, says there may be a silver lining for donors hidden within the dark clouds of the financial meltdown and fears of an economic depression.
“The bad news in the bad economy is that vitally important services may be closed or downsized. However, the good news is that some of the worst-run organizations will no longer be competing for donations and it will be easier for donors to choose which organization to support. Also, due to mergers, more efficient organizations will be operating,” writes Ken Berger, the group’s chief executive, and Leonie Giles, a Navigator program analyst. on the group’s blog.
“This is good for donors and for the causes we care about,” they argue.
What do you think? Can a downturn in the economy thin out the number of poor-performing charities?
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I fear that it’s much more likely that both worthy and “poor-performing” organizations will be equally hard-hit. I think it’s just a fact of the nonprofit world that many groups doing important work often operate on a shoestring budget. With a crisis of this magnitude, everyone will feel the effects.
— Katie Oct 3, 02:50 PM #
The fiscal pressure on nonprofits will drive boards to take greater responsibility for the financial vitality of the organizations where they serve. This is also the time for funders to encourage best practices among boards by investing in organizations where boards focus on key organizational matters, contribute generously, and expand networks of support. http://www.fastcompany.com/blog/alice-korngold/leading-companies-good-0
— Alice Korngold Oct 3, 02:54 PM #
I believe that the economic downturn will unfortunately encourage many efficient charities to out of desperation turn to rip-off professional fundraising companies that will squander more of our charitable resources during this time of great need. It’s wishful thinking to believe that only poorly run charities will disappear.
— Daniel Borochoff Oct 3, 05:42 PM #
I agree that this is a good time for smaller charities that operate on a shoe string to look around for other nonprofits serving the same clients and see if there is way to collaborate, or possible even to merge and eliminate some duplication of services that results in overlapping and competition for limited funds from donors who are beginning to feel the economic pinch themselves.
— James Holcomb Oct 3, 05:43 PM #
This may be a time for both non profits and donors to think more creatively about ways they work together. I use maps, which you can see at http://mappingforjustice.bogspot.com , to show all of the high poverty areas in Chicago, along with locations of poorly performing schools. These are indicators of places where volunteer-based tutor/mentor programs are needed. I tie these maps to a Program Locator database, with listings of more than 240 organizations in the region who do some form of volunteer-based tutoring and/or mentoring, and an extensive library where customers (volunteers, donors, parents, program leaders) can learn to compare the different programs with each other.
In traditional philanthropy there is a competition for resources which gets more severe in times like this. However, the maps are intended to help people think of ways to assure that good programs are available to kids in all places where they are needed, not just at those places with great marketing and fund raising.
While one goal is to get the non profits to work together to increase traffic to these maps, we also focus on the other side. We can lower the costs of fund raising and marketing for non profits if we can increase the number of businesses, churches, hospitals, etc. who build learning circles, and focus groups, that engage their members’ time, talent and dollars in support of tutor/mentor programs throughout the region. In 2007 this resulted in $240,000 in grants from Lawyers Lend A Hand-LLAH (http://www.lawyerslendahand.net) to 31 different tutor/mentor organizations, which was a result of work we’ve done with this group since 1994 when their first grant was $2,000 to one organization.
Thus, thinking out of the box might lead many of us to collaborate on fund raising and marketing strategies that create more programs like LLAH, rather than compete on our own. Such collaboration can be within one city or state, or can link similar groups in many cities and states.
Instead of the money flowing up to a national leader, the aim is that the money flow down, through the map and database, to the different organizations in the neighborhoods who need these funds the most.
— Dan Bassill Oct 5, 11:56 AM #