More Bang For Your Buck: Measuring Non-Profit Success.
A new generation of foundations are leading the way in making donations more efficient, they need to become known by all.
After speaking with my mentor about more effective ways of giving, I began a journey of discovery into the world of Effective Altruism.
I believe that, with the right knowledge, skills and advice, there is a difference between charitable giving and effective altruism. Both are good but what I mean by effective altruism is that it focuses on solutions. Effective altruism in charities that I know, such as the Open Philanthropy Project and GiveWell, is driven by data and evidence of what is the most impactful action to take.
Effective altruists actively choose the solution to a problem they think should be a priority, and try to find the best way to achieve it. I see it as a way to use my skills and interests to help make the world a better place and to make this a priority in my life.
Whilst of course the non profit sector could always do with better funding, the sector nonetheless received $390 billion in donations in 2016, about 2% of GDP, it has enough funding to provide employment to 12.6 million people in America in 2019. Approximately 63 million Americans — 25 percent of the adult population — volunteer their time to charities and the 2016 national value of volunteer time is $24.14 per hour. In other words, Americans contribute $193 billion of their time to our communities. Those figures are only growing. In further entries, I will endeavour to speak about ways in which we can encourage more donations and money flowing into the non profit sector but I my early research has suggested that the funding is there somewhat; it’s the deployment of these donations in the most effective and impactful way that is the biggest issue at hand.
The “for profit” world have created a globally recognised standard for measuring success. Millions of analysts upgrade or downgrade their ratings of companies, accountants produce detailed financial reports about the effectiveness of the companies capital deployment and their share price indicates whether people want to be associated to that company and believe others will join them in this thinking too.
The “non profit” sector cannot afford those luxuries, it doesn’t have the scale that the “for profit” world has.
Whilst people campaign for the breakup of large monopolies in the “for profit” sector, monopolisation could, if applied sensibly and practically be far more effective than multiple uncoordinated efforts. With multiple places to donate to, donors rarely know where their money will be most effective and deliver the most impact or value. In the private world, there is a whole industry dedicated to effective capital deployment from venture capital funds, private equity funds, ETFs and mutual funds each of them competing for our money and competing with each other to deliver the highest return on investment.
But very few non profits have the resources or the time to measure and track against impact KPIs nor are they held accountable to do so.
“What’s more, donors and foundations can’t get reliable, consistent data to compare the performance of nonprofits. Few public databases offer information on outcomes, and what data can be found aren’t comparable across organizations. The media don’t do much independent analysis on the most and least successful nonprofits. And even specialized clusters within the sector, such as public education, youth services, and adult training, lack standard processes for reporting and auditing their performance. As a result, it’s difficult to control for variations in the populations served by different organizations and to understand whether a nonprofit has actually had a significant social impact.”
However, the Effective Altruism community is starting to become the place that examines the most potent and worthwhile global priorities spearheaded by Give Well’s list of it’s top 10 charity donation recommendations every year.
The core of effective altruism is the idea that if you have an opportunity, the amount of money that you donate can have the biggest impact. A new generation of foundations is leading the way in making donations more efficient, they need to become known by all. They are a young community, only having been around for the last 10 years and accelerated by a Ted Talk given by the founding father of Effective Altruism Peter Singer.
The podcast “Effective Altruism: An Introduction” is a fantastic place to start and across 10 episodes will provide fantastic insight into the community, principles and on going activities. It was mentioned in one episode that only 30% of efforts within the Effective Altruism community go towards Global Public Health but it is the remainder of these efforts really interest me. The EA community are exploring topics of long-termism a topic that looks at how we protect the future of humanity and enable it to keep flourishing and progressing without creating catastrophic artificial intelligence, wiping our civilisation out with biological risks such as engineered pandemics.
Another resource I would recommend that compiles together what the EA community stands for and actively encourages and promotes participations is 80,000 Hours helping people to switch to Effective Altruism focused careers.
