Just wanted to quickly highlight this report from Keystone on online philanthropy markets. The author, David Bonbright, quickly gets to the nub of the argument: the markets are only going to drive change when there is robust and comparable evaluation of project outcomes.
But I'm afraid the idea that these markets will collaborate to produce common evaluation standards is rather fanciful. It seems more likely that one of the more enterprising websites will develop its own evaluative approach and then capture market share. Whatever, happens, let's hope it happens soon.
In response to the report, Perla Ni of GreatNonProfits.org wrote a shameful piece in the Financial Times, arguing against the use of measures of charitable effectiveness. Amazingly, her argument seems to rest on the idea that "presenting potential donors with metrics suppresses donations", as if that were therefore a reason to resist them. Did you ever think such self-serving collusion could be possible?
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Are these organizations truly accountable to anyone? Take globalgiving.org as an example: $3.9M in revenue but only $1.6M was passed through to the grass root organizations and they show $511K in program expenses for tools, analysis, and evaluation of the projects before disseminating the $1.6M? After giving out the $1.6M and paying overhead, they still show a surplus of $1.2M which was then loaned to a for-profit sister company (Many Futures Inc) which shares key executives with the nonprofit? They are sitting on $4.4M in reserves, all of which appears to have been loaned to Many Futures Inc … why not just give the money to the grass root organizations? Why does a nonprofit loan money to a for-profit?
I’m no financial expert but something appears puzzling at globalgiving.org.
Here’s their 990 from last year; tell me if I’m wrong: http://www.guidestar.org/FinDocuments/2007/300/108/2007-300108263-038cfd51-9.pdf
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