Monday, November 24, 2008

Boundless Optimism, No Money

As I mentioned last week, I recently attended the annual conference of the Independent Sector. Almost 1,000 representatives of the non-profit sector attended from throughout the US. Overall, the mood was ecstatic about the prospects for the sector in relation to the new Obama administration. It is anticipated that he will have a much more receptive approach to the organizations and their concerns. Speakers talked about dramatic system change, a major historic paradigm shift, a new social contract and a fundamental transformation in the American psyche. As a result, they expect a marked increase in funding and policy impact for non-profits.

A couple of the speakers at the conference cautioned against such an overly optimistic view. A pollster noted that the shift in public attitudes was actually only a few percentage points. In summary he said that we as a nation remain fundamentally quite centrist in our views and are not looking for a radical shift in social policy. The polling evidence pointed to a desire for a change that will bring us out of our financial nightmare, but not a substantial increase in social spending by government. However, some of my colleagues are convinced that, regardless of the facts, the heavens are about to open. Of course, even if the Obama administration wanted to dramatically increase funding for charities, the money just isn't there right now.

Not surprisingly, most people in the charitable sector lean to the left in their political views. After all, that perspective tends to argue for more social spending and hence, more funding for charities. However, due to the regulatory requirements on charities, our organizations are required to remain non-partisan. Yet the underlying political orientation of most individuals in those charities is unmistakable and pierces the veil at our gatherings.

At Charity Navigator, we consider it imperative to remain neutral on such matters. I had the experience recently where, on Monday a reporter called to get our comments on a corrupt charity that was affiliated with a union. On Tuesday, a reporter from the other side of the country called to get our comments on a corrupt charity that was affiliated with a massive corporation. We were equally critical of both and could be perceived as offending both the left and the right. More accurately, we remained committed to our mission and unbiased in our responses. The sector as a whole needs to do the same.

The sector would also do well to wake up and smell the coffee about the economy. We are in for less funding, not more, regardless of one's political perspective. The sector needs to honestly discuss that reality and take steps now to address it; not wait until it falls off the financial cliff.

Friday, November 21, 2008

Monday, November 17, 2008

They don't know what we got

I have had a unique experience this past couple of weeks. I attended a conference on charities in China (the Global Philanthropy Forum) and then I attended one in the US (The Independent Sector annual conference). The contrast is amazing. In China, they are talking about the creation of a charitable sector, whereas the US has the largest and most well funded (by private contributions at least) charities in the world. In China it can take years to have an application approved to become a charity, in the US we give out the designation like candy. As noted in last week's blog, at the Global Philanthropy Forum in China they implored Charity Navigator to come and help; in the US many low rated charities would like us to just go away!

At the US conference, we had a local Congressperson talk to us about the lack of awareness among our political leaders about the size and impact of the non-profit sector. She informed us that many did not even realize that government money is used to pay for many of the services charities provide (last estimate I heard was nine percent of charities' funding comes from some governmental entity - that translates to well over one hundred billion dollars). Think about that. The largest non-profit sector in the world and some representatives of one of the most significant funders do not even know that they fund you! Pretty amazing. It is therefore not surprising that laws are often passed with no consideration of their impact on the charitable sector.

Such a lack of awareness is all the more frightening in the current economic climate. With government agencies at all levels cutting their budgets, there is a danger that critically needed programs can fall under the axe before there is time to educate legislators on the full implications of the cuts. Therefore, I believe that ongoing education of our governmental officials is needed on: 1) the role of the non-profit sector in solving critical problems in our society, 2) its tremendous size and vital role in the economy (one out of every 10 jobs in this country, for example) and 3) the critical support it receives from government for everything from community health care to low income housing to the arts and humanities. To this end, one encouraging effort that is being undertaken is the creation of a Philanthropy Caucus in both the House and the Senate. Currently these caucuses are in their early stages (about 43 representatives in the House and 5 in the Senate participate so far) but going forward this could be a critical vehicle for education on the federal level. I believe there also need to be comparable entities on the state level. Pennsylvania now has such a caucus and hopefully other states will follow suit. There is also a recommendation being made that the Executive Branch should establish a high-level office to coordinate education and oversight efforts in all federal agencies that are directed towards improving the capacity of nonprofit organizations to serve communities. This sounds like another good idea to help our political representatives to make better informed decisions as well as to maximize coordination and efficiency of charitable funding and monitoring at the federal government level in a time of fiscal challenge.

China is looking to countries like the US for guidance on how to create a charitable sector. I realize that part of the contrast noted earlier relates to the stage of development of each country, as well as our radically different systems of government. Our system allows for more voices to be heard and a complex array of checks and balances. As Churchill said, "...democracy is the worst form of government, except for all the others ..." I suppose we could make a similar pronouncement about charities in the US. "Charities are the worst vehicle to address many of society's problems, except for all the others". So in the end, it is not surprising that we still have a long way to go in educating our own society on that charitable sector. I had to go to the other side of the world to further appreciate what a precious jewel we have in our charities. I only had to travel a couple of hours away to appreciate how little our government understands that jewel.

Monday, November 10, 2008

Where the Heart Meets the Mind

When I was invited to speak at the Global Philanthropy Forum in Beijing, China, my first question to the organizer was - How did you hear of us? She replied, "Charity Navigator is famous here". She went on to explain that the Chairman of the Jet Li One Foundation (click here to watch an excerpt of my interview with her), who organized the Forum, was searching online to find a model of how to evaluate charities. She determined that "Charity Navigator is the best web site anywhere doing this kind of work".

The forum was sold out and many people had to be turned away. The participants were about one-third from the small community of charities in China, one-third from the business community and the remaining third divided between the media and government representatives. When asked to give a summary of Charity Navigator to this audience (click here to watch the video), I decided to focus on one of Charity Navigator's past tag lines - Where the Heart Meets the Mind. The response I got was quite amazing. Here are a few of the comments I received:

1. John Chen, President & CEO of Sybase a leading technology company in Asia, noted that he often uses Charity Navigator in his giving decisions (click here to watch the video).

2. Ben Pape, who is a charity leader and businessman who has consulted to the British government, asked me in the Q&A section of the presentation what Charity Navigator's plans are to come to China (click here to watch the video).

3. Graham Davies, an economist as well as a seasoned leader in the non-profit world, was a presenter later in the day. During his talk he stated that China needed organizations like Charity Navigator to come and help (click here to watch the video).

4. Brett Rierson, Managing Director of the Clinton Global Initiative Asia, stated in my interview with him that Charity Navigator is needed in Asia (click here to watch the video).

5. Representatives from a variety of other charities and corporations with operations in Asia also approached me for possible collaboration.

I have no idea if we will be doing any work in Asia; that is not my point here. Rather, it is the universal nature of our message and the need for our services worldwide. The basic message I gave that led to all of the networking that followed was this - if you want to give to a charity, you do so because your heart is touched by the mission. However, Charity Navigator is here to help you to keep a clear head as you consider donating, so that your heart is not broken in the process of giving. We will continue to fulfill that mission and go where we are invited (in and outside the US) to spread the word about how to donate wisely.

Monday, November 3, 2008

2008 Global Philanthropy Forum in Beijing

Ken is representing Charity Navigator in China at the 2008 Global Philanthropy Forum. Organized by the Red Cross Society of China Jet Li One Foundation and Boao Forum for Asia, Ken’s sent the following video highlights from his presentation on "Information Technology and Global Philanthropy."

A second Q and A is online here.

While in China, Ken participated in several interviews. One is accessible here.