Supporting A Cause: 5 Things to Evaluate When Choosing Humanitarian Donations
Your charitable contributions can help change the world, but make sure give strategically. Our guide below can help you investigate, research, and assess the humanitarian organizations you support — helping you move from a good donor to a transformational giver.
Understand Your Ethics, Values, and Goals
Before you begin researching humanitarian organizations, reflect on your own life. Ask yourself questions such as:
What are my personal values?
What ethical beliefs and principles do I want to guide my giving?
What do I want my charitable investments to accomplish?
What are my short- and- long-term philanthropic goals?
Why research begins with reflection
According to NonProfit Source, 69% of the U.S. population gives to charity, and these givers support an average of 4.5 organizations each. It can be easy to pass money around without really evaluating the good it can do. After all, most charities make giving easy, and the thank-you letters, rightfully so, can make you feel good.
But strategic giving can create even more of an impact for the Kingdom of God!
The National Christian Foundation has identified four areas you can strategically reflect on when approaching your giving:
Legacy: What will your gift accomplish after you are gone?
Family: How can your family or church change the world together?
Passions: What does it mean to give with kingdom impact in mind?
Wealth & Resources: How can your giving do the most good?
David Wills, President Emeritus of the National Christian Foundation, says giving begins with God. When we make God the center of our generosity, He provides answers to the questions we ask. He already has…
The Bible gives general guidance on giving. For example, Acts 1:8 tells the disciples to spread the Good News in Jerusalem (where you go regularly), Judea & Samaria (places you don't usually go), and the ends of the earth (as far as you can go.) The same should be true of our giving — it should impact the places we frequent, the places we never go, and those places far from home.
There are several other parts of the Bible that can also direct our thoughts about giving. For example…
1 John 3:16-17 talks about giving to other Christians in need.
Deuteronomy 10:18-19 admonishes us to share with orphans and widows.
Matthew 25:34-40 instructs us to care about people who are hungry, thirsty, strangers, naked, sick, or in prison.
Galatians 6:6 encourages us to support pastors and teachers.
I Timothy 5:4, 8, and 16 discuss the critical importance of caring for our immediate family.
1 Corinthians 16:1-4 reveals an early church that gave generously to people in need who lived far away.
Once you've reviewed the Biblical foundation for giving, ask yourself and God: What is He calling you to do with your giving? Where will your money do the most good?
Evaluate Outcomes and Impacts
Organizations typically assess their effectiveness using two metrics — outcomes and impacts. In the context of a humanitarian organization, outcomes and impacts are distinct but connected concepts that help evaluate the effectiveness and success of an initiative.
Outcomes
Definition: Outcomes refer to a program or intervention's immediate or intermediate results. These are changes that occur as a direct result of the organization's activities.
Example: If a humanitarian organization provides clean water in a community, the outcome could be the reduction of waterborne diseases or improved overall health.
Impacts
Definition: Impacts are broader and more far-reaching changes that result from a combination of outcomes. They represent the long-term effects or consequences of the organization's efforts.
Example: Building on the previous example, the impact of providing clean water might be an overall improvement in the community's quality of life, economic productivity, and social well-being over an extended period.
Outcomes are the direct, measurable changes that occur due to specific activities. At the same time, impacts are the more profound and sustained changes that occur over time, often influenced by various outcomes.
When evaluating a humanitarian organization, understanding both outcomes and impacts can be helpful for assessing its initiatives' overall effectiveness, sustainability, and transformative power in addressing the underlying issues and contributing to positive, lasting change in the communities it serves.
What impact do you want to create with your philanthropic choices?
Examine Accountability and Governance
After you identify the impact you want to create, it's time to search for organizations that can help you meet your goals.
What are the five hallmarks of an effective nonprofit organization?
An effective organization pursues a clear mission and purpose.
An effective organization has the resources, technology, and staff to achieve its mission.
An effective organization is generally audited annually and publishes regular financial statements.
An effective organization has a continuous improvement plan and implements it.
An effective organization operates under a transparent, organized, and empowered board that meets regularly.
What are Transparent Governance Structures?
Transparent governance structures are crucial when choosing where to allocate your humanitarian donations. Look into an organization's decision-making processes, board composition, and governance framework.
Ensure that the organization adheres to ethical standards. One good strategy is to search for non-profits that hold membership in the BBB's Wise Giving Alliance or the Evangelical Council for Financial Accountability. Also, you can review resources from Charity Navigator and CharityWatch to determine if your prospective organization is healthy, accountable, and transparent.
How does the Organization Handle Donor Funds?
Equally important is the handling of donor funds. Prioritize organizations that demonstrate responsible financial management. This involves having an idea of their budgeting, spending efficiency, and allocation of resources.
Look for clear and comprehensive financial reports that detail the impact of donations. This transparency ensures accountability and provides donors with a clear understanding of the tangible outcomes resulting from their contributions. By prioritizing organizations with transparent governance and responsible financial practices, you contribute to a culture of accountability and ethical conduct within the humanitarian sector.
Assess Long-Term Commitment and Planning
It's generally a good sign if the organization has been around for awhile , and their impact has grown more profound as the years pass. What factors contribute to organizational longevity?
Look for signs of financial, structural, and donor sustainability.
Financial Sustainability: A responsible nonprofit organization will generally have a financial sustainability plan to help fund the mission through economic downturns.
Key Question: Does this organization have at least 3-6 months of operating reserves set aside to see them through the lean times?
Structural Sustainability: It can be risky if an organization relies on a single individual, family, or other organization for leadership, governance, funding, or support.
Key Question: Does the organization have real oversight and accountability from an objective and empowered board of directors?
Donor Sustainability: Committed nonprofits need a plan to keep their current donors and add new ones.
Key Questions: What is your organization's donor retention strategy? How are they recruiting new givers? Is their strategy effective and efficient?
Discover How the Organization Navigates the Ethical Challenges of Humanitarian Aid
Doing good is more challenging than it looks. While giving money or establishing a program may be simple, addressing complex social problems comes with a bevy of potential ethical pitfalls.
The law of Unintended Consequences
Doing good can quickly go bad. By failing to execute their ideas thoughtfully, many development programs have inadvertently trapped vulnerable people in poor health, education, and infrastructure. No matter how enthusiastic or exciting an organization seems, they must do their job well — focusing on effective strategies that treat people respectfully.
Evaluating the Potential Adverse Effects of Aid
Effective charities maximize the good they do and minimize the harm they create. Many of the best Christian organizations offer resources to help their donors better understand poverty and efforts to alleviate it.
Two books you can might consider reading are Toxic Charity: How Churches and Charities Hurt Those They Help, And How to Reverse It, and Walking with the Poor: Principles and Practices of Transformational Development. You may also find a class or participate in a small group at your church about how to help without hurting.
Helping with the Right Mindset
Giving feels good, but it can have a dark side. Givers have a position of power, prestige, and privilege relative to receivers. When you're always the giver — never the receiver — it can also leave you feeling overwhelmed, burdened, or frustrated.
In the book When Helping Hurts, How to Alleviate Poverty Without Hurting the Poor . . . and Yourself, Christian writers Steve Corbett and Brian Fikkert wrote, “Until we embrace our mutual brokenness, our work with low-income people is likely to do more harm than good. I sometimes unintentionally reduce poor people to objects that I use to fulfill my own need to accomplish something. I am not okay, and you are not okay. But Jesus can fix us both.”
Conclusion
Make sure to stay educated about the causes and organizations you support. Educate yourself and others by reading, taking classes, volunteering, and staying informed about evolving issues. You may also help your favorite nonprofits by spreading the word about their mission and helping generate new donors and dollars for their cause.
If you would like to talk with a wealth management professional about giving effectively, efficiently, and generously, call Cooke Wealth Management. We would love to speak with you!