Giving Compass’ Take:
• Caroline Fiennes explains why donors need to prioritize giving better, not just giving more, to ensure impact.
• Are you giving effectively? Which donations have you made that had the most impact?
• Learn about impact-driven philanthropy.
The impact of charitable gifts doesn’t correlate to their size. This is because, on one hand, charities vary dramatically in what they achieve with a given amount of resource, and, on the other, some ways of giving are better than others. This is evident from many observations, including that:
- Whereas some programmes are highly effective, others make no difference at all, and some even exacerbate problems
- When donors divide their funds into many grants of $10,000 rather than fewer of $100,000, the costs incurred by non-profits in raising funds increases nearly six-fold
- Charities say that they would rather have $70 with no ‘restrictions’ on how they can use it than have $100 with restrictions. In other words, these restrictions destroy about half the value
- Funding from some donors creates so much work for recipient non-profits that it’s not worth having at all.
Much has been written about how charities can improve their impact: by making their programmes more effective and/or raising more funds: This paper moves the spotlight to donors, highlighting the importance of what they give to and the way they give. This complements the more established discussion about how much donors give.
Persuading donors to give better may achieve as much impact as getting them to give more. Perhaps it is cheaper and easier to persuade somebody to give in a way which doubles their effectiveness than it is to persuade them to double the amount they give. Our interests are in assembling evidence about which donor behaviours produce the best outcomes, and how donors can be guided towards them.