Also in this morning's news, this time from the New York Times, an interesting piece on evaluating non-profits. Apparently these two guys left careers at a hedge fund (where they were making six-figures) to start evaluating non-profits full time. (They still make 65,000, which is a considerable chunk of change.) Perhaps the best quote is:
Mr. Karnofsky and Mr. Hassenfeld argue that widely available existing systems for charity evaluation, which rely largely on the charities’ tax forms, known as 990s, are basically worthless because charities are given wide latitude in how they classify information. For example, some charities count fund-raising costs as money spent on programs.I know many people tend to check GuideStar and Charity Navigator, but these guys are absolutely right in questioning the idea that the percentage spent on administration costs is a horrible way to evaluation a non-profit. Yea for shaking up the status quo, and questioning non-profits. The Bill and Melinda Gates foundation has done this as well. The large dollars they offer, plus the engineering/business backgrounds, have changed the non-profit sector significantly: "Besides tackling some of the world's worst problems, by insisting on efficiency and good business practices, the Gates have helped focus a laser beam on all nonprofit organizations, demanding that they operate in with an exacting accountability to their donors and the people they serve."
Charity Navigator, a Web site that rates charities based on their tax forms and has some five million users, is Mr. Karnofsky’s particular bête noire.
“I have literally read thousands of 990s, and they tell you nothing about whether a charity helps people,” he said. “I can tell you exactly how to get a four-star rating on Charity Navigator without doing anything charitable at all.”
Trent Stamp, the president of Charity Navigator, is put off by their approach. “I truly do wish them well,” Mr. Stamp said, “but the way they’re going about it seems a bit counterproductive to me. I’m not sure why they feel the need to tear down those who are also attempting to help donors, nor why they need to tell donors who use those services that they’re stupid.”
Many in the field question how long GiveWell can survive. While 34 percent of wealthy donors who responded to a survey sponsored by the Bank of America said they wanted more information on nonprofits, almost three-quarters said they would give more if charities spent less on administration. And collecting information is costly.
Lastly, Northstar has received 20 to 24 inches of snow over the past 24 hours, with another 6" predicted today. Unfortunately, I'll be at work tomorrow as well, and then out of town this weekend for the holidays, and then I enter the blackout dates for my pass. Boo hiss to missing some of the best conditions . . .
