All Social Impact is not Good

My first full time job after graduating college was at a small nonprofit organization. Because of the deplorable caregiving practices under the reign of Ceausescu, children in Romanian orphanages were at extremely high risk of failure to thrive.

The organization I worked for funded salaries for caregivers through our child sponsorship program. We also coordinated quarterly short-term trips to Romania. The trips had a sole purpose: hug the babies.

I was the sole employee and wore many hats: sponsorship coordinator, fundraiser, bookkeeper, database manager, office manager, volunteer coordinator, event planner, travel coordinator, and personal assistant. The pay was just over minimum wage ($7.25 in Texas at the time!). I didn’t have health insurance and the work was incredibly stressful. (Just to give you a hint — my first major task was to audit the books. I determined my predecessor had embezzled thousands of dollars.)

I commuted an hour and a half each way in Dallas traffic. A full third of my pay went to gas and most meals were eaten in my car. None of this makes sense now, but I was very idealistic. I had convinced myself that the social impact, the good, I was affecting in the lives of those babies was worth my personal sacrifice, no matter what the cost.

About a year in, having a full view of our operations and the dollars that actually made it to Romania, I found myself in the throes of an occupational crisis of sorts. There was nothing underhanded afoot. Our intent was good. The organization was helping babies and their caregivers. Yet, the question of impact plagued me:

Were we really having enough impact to merit our operating expenses?

Were we doing right by the scores of elderly women on limited budgets sending $10 a month so American volunteers could go hug Romanian babies?

How much good is good enough to keep going?

Warning: if you follow this line of thinking long enough, the question you will ultimately encounter is. . .

What if a nonprofit isn’t doing good?

Like many individuals might, I had assumed if an organization was a nonprofit, the social impact would be positive.

In granting 501c3 status, the IRS does not require nonprofits to pass a values test. 501c3 status is a tax-exemption, not a moral compass.

According to the Chronicle of Philanthropy, the IRS has granted tax-exempt status to more than 60 groups designated as hate groups by the Southern Poverty Law Center. It is not up to the IRS to determine if, in fact, the mission of a nonprofit is serving the public good. Nonprofits that do more harm than good are often in the same tax category as those that provide educational programs in the public interest.

Charity Navigator and GuideStar provide insight to help donors and the general public learn more about nonprofit organizations. GuideStar is my go-to for data including mission, programs, financials, and 990s. Charity Navigator evaluates and rates nonprofits on criteria including financial health, accountability, and transparency.

There are currently 526 nonprofits on the Charity Navigator Advisory list. 43 are low risk, 240 are moderate risk, and 243 are high risk. Of those on the Advisory list, many are under investigation for fraud, self-dealing, or worse — allegations of physical or sexual abuse of minors. One of the organizations on the High Concern list, Southwest Key, has been accused of all three.

As we move into the Fourth Industrial Revolution, nonprofits will increasingly embrace technology that was once too expensive and inaccessible for them. AI, Internet-of-Things, Blockchain, and robotics are now available to organizations of all sizes and annual operating budgets.

Those of us in the nonprofit space tend to be a trusting bunch. I’m all for optimism, but we can not bury our heads in the sand and pretend all nonprofits utilizing technology will produce positive social impact or will use tech for good.

So what can be done?

Here are practical steps for technology providers:

  1. Commit to humane and ethical use of your technology and invest resources in promoting humane and ethical use.
  2. Do your research about an organization before you sign on the dotted line. There’s no substitute for due diligence.
  3. Create a framework for evaluating an organization’s eligibility for access to your products — and especially any discounts.
  4. Incorporate policies for ensuring humane and ethical use into your contracts and agreements. Be clear on what is allowed, and what’s not. Outline the procedures that will take place if a client is found to use your technology in inhumane or unethical ways.
  5. Provide internal feedback systems for your staff to report concerns in the event they become aware of allegations of untoward behavior. If a concern is reported, follow up on it.
  6. Submit suspected ethical use violations to your legal team or to an outside agency for review.

Taking these six steps will show a strong commitment to the ethical and humane use of technology. If you want your technology to be used for good, it is no longer enough to rely on a tax designation to assume positive social impact. Really get to know your clients and be about the business of ethical and humane use.