New Philanthropy Capital Blog - News and Views

We've seen a variation of this debate in the U.S.,...

2010-01-01T19:09:46.790Z

We've seen a variation of this debate in the U.S., over the Obama Administration's proposal to limit the charitable contribution deduction for some very high earners, as a part of the financing strategy for health care reform. I've been rather appalled at the nonprofit leaders who have taken this as an assault against all that is good, because they see their privileged tax status as a right and as an always-worthy public investment, when, clearly, it is neither. My question would be, though, in the absence of really good ways to measure nonprofits' impact, how could you begin to link their tax benefits to it?

I recently came across your blog and have been rea...

2009-12-24T04:35:56.261Z

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Alena

http://grantfoundation.net

I recently came across your blog and have been rea...

2009-12-22T09:00:36.159Z

Help young people out Don't call them yobs, thugs ...

2009-12-18T09:12:04.234Z

Help young people out
Don't call them yobs, thugs or louts
Labels tend to stick

As Gladstone pointed out, an income tax exemption ...

2009-12-17T14:36:50.370Z

As Gladstone pointed out, an income tax exemption for registered charities is similar in significant respects to a grant of public funds: affording a tax exemption allows charities to keep income that otherwise would have become public funds. We thus might cast an income tax exemption as a withdrawal of (potential) public funds. The following example shows that, if we treat a charity tax exemption as we treat other expenditure of public funds, then the effectiveness of those charities enjoying tax exemption ought to be a concern of the public, just as effective expenditure in the NHS is.

Consider the NHS, for example. The NHS uses taxpayers' money to offer a service, namely a national health service. Now, I would suggest that it is the public's concern that their money is used effectively to provide the health service, whether or not they themselves are using that service (this may be because they are concerned about the possibility of using the service, but this point is of little importance). If the public agree that the nation's collected tax should be aimed at a certain end - in this case the health service - I expect it is the public's concern that the money is spent effectively.

As an aside here, it is worthwhile briefly defining "effective expenditure". If we assume that the general public approve of a certain end, in this case broadly the NHS, then by effective expenditure I mean that this agreed-upon end is met with a certain degree ("maximum" might be a bit strong) of effectiveness. That is, the same end cannot have been achieved far cheaper, or the same money cannot have been used to achieve far more of that end. For example, it would not be "effective expenditure" if the NHS were spending x pounds on a certain drug to treat a disease, where a drug with all and exactly the same effects costs far less, or where a drug which had far better effects could be bought for the same price.

Now, if we map this back onto the case at hand, it seems that, since a tax exemption is similar in the relevant respects to an expenditure of public funds, the public should have the same concern for “effective expenditure” with a tax exemption as it has with the NHS. If a charity is afforded an income tax exemption, where another charity can meet the same ends for far less expenditure, or for the same expenditure can achieve far more of that end, then this is not effective expenditure. Once again, the public ought to be concerned about the effectiveness of those charities which enjoy tax exemption just as we are concerned about the effectiveness of the expenditure of all other public funds. Are the ends that the charity aims at achieved effectively? Could those aims be achieved better elsewhere?

Whether or not the onus is thus on the charity to “demonstrate” their impact themselves is another question. Moreover, whether it follows from the public’s concern that the official “charity” status ought always to depend on demonstrated effectiveness has not been directly addressed, though my point seems to point in this direction.

Christmas? Bah, humbug! Where's the ROI on gold, F...

2009-12-17T08:50:52.315Z

Christmas? Bah, humbug!
Where's the ROI on gold,
Frankincense and myrrh?

Thoughtful funding for All charities! 'Cept us, b...

2009-12-16T17:19:08.005Z

Thoughtful funding for
All charities! 'Cept us, be
Wreckless with funds for us

Gift Aid shouldn't be considered a 'right', but ne...

2009-12-16T13:21:06.072Z

Gift Aid shouldn't be considered a 'right', but neither should the option of removing Gift Aid. Without it charities wouldn't be as able to deal with the social issues they do, and since government can't address them all alone, it's a fair exchange. A little support in recognition of the social support.

You could argue that not every charity creates a positive social impact, but then you're moving into a subjective area. Where I see a lack of value, others see crucial impact, and vice versa. The assumption of benefit here seems to work.

For me, the issue is for charities to make the most of this "gentlemen's agreement".

Speaking *personally* I'm of the view that the majority of the tax I've paid during my life has been largely squandered by successive governments, whereas I know my organisation changes lives, so every penny I can keep from the government and in my organisation is changing society for the better.

The condition on receiving Gift Aid should be a mi...

2009-12-16T10:14:54.590Z

The condition on receiving Gift Aid should be a minimum standard of transparency (or perhaps a minimum standard of impact evaluation).

Labour are strangely reluctant to use levers at their disposal to improve charities' effectiveness, especially considering how much public money goes direct to charities (let alone Gift Aid).

Measure your results To get more Christmas funding...

2009-12-15T17:38:58.907Z

Measure your results
To get more Christmas funding
Get philanthro-pissed

Charity begins At home they say, that is why I sto...

2009-12-14T12:49:27.501Z

Charity begins
At home they say, that is why
I stole the gift aid

I was taught haiku Five seven five blah blah blah ...

2009-12-14T12:47:37.396Z

I was taught haiku
Five seven five blah blah blah
Oxford, naturally

Of those who say I Should give so much more I've ...

2009-12-12T08:18:04.033Z

Of those who say I
Should give so much more I've had
My philanthropy

Give until it hurts; Do as you would be done by; A...

2009-12-11T17:57:41.437Z

Give until it hurts;
Do as you would be done by;
And the world is cured!
.....
Share and share alike;
Contribute to charity...
No more platitudes.
.....
Lend me your ear...
Walk another mile with me;
Be my friend in need.
....
Do good while you can –
Charity begins at home
The world’s your oyster.

Tanja Cilia

Measuring impact Without counterfactual Not identi...

2009-12-11T16:34:16.052Z

Measuring impact
Without counterfactual
Not identified

(after Keisuke Hirano)

Rihanna put it Best. Stand under my umbrell A Ella...

2009-12-11T13:24:23.639Z

Rihanna put it
Best. Stand under my umbrell
A Ella Ella

It is very important to make sure that the amounts...

2009-12-10T05:00:47.472Z

It is very important to make sure that the amounts set aside for charity really reaches the needy and the ones for whom it has been set.

While evaluation by external consultants certainly...

2009-12-03T09:51:44.115Z

While evaluation by external consultants certainly plays a role, we believe charities themselves need to be developing strong self-evaluation, to provide simply good management information. So I echo your concern - it's still very much an open question whether our proposed network would include those within charities (my perspective is that it should).

On customers and choice, I'm not sure how well the analogy holds. Those who need charities' help often aren't in a position to choose, either because alternative options aren't available, or because they're not aware of them. So maybe you're right - clients need to be given more choice. But how?

Interesting to read the report from the Conference...

2009-12-02T18:31:00.415Z

Interesting to read the report from the Conference on establishing an Association of Non Profit Analysts.

Only concern is that this very much plays into the idea that evaluation is best done by detached, intelligent 'experts'.

In the rest of the world it is customers who 'evaluate' an organisation with every choice about every purchase that they make.

That isn't to say that a market model can simply be grafted into the charity sector. Nor that evaluation shouldn't be improved.

But the most important thing might be to focus on giving clients more choice.

Eleanor - you are absolutely right. On that list o...

2009-11-25T09:33:43.515Z

Eleanor - you are absolutely right. On that list of fake charities are, in my view, some of the most effective charities around. For some charities, putting time and energy into raising large sums of money through public donation is sensible (animals, children, cancer charities) but for others (charities working with drug users or refugees) frequently not. Where's the virtue in receiving money from the public when you can't show how it is being used to help beneficiaries? If you can't prove that what you do makes a difference, then you are fake - that should be the definition, not one based on source of funding. Keep up the good work.

Jeremy Swain

YES!

2009-11-18T21:54:28.302Z

YES!

Yes the message needs to come through, loud and cl...

2009-11-18T17:34:47.621Z

Yes the message needs to come through, loud and clear. That being said , the chronically destitute is one problem, poor youth is quite another. More benefit to the individual and society will be derived if a youngster can read at age 5 rather than at age 50.

I'm not sure that you can say the fall in major gi...

2009-11-13T13:15:12.476Z

I'm not sure that you can say the fall in major giving is totally unexpected given the fall in wealth.

If anything, i would see the evidence of falling rates of major donations as argueing that the financial crisis has been an unexpected "shock" to the permanent income of the very rich.

If this is the case, then the wealthy could still be giving the same proportion of their permanent income as before, it is just that they now have less to go around.

To get donations back up to pre-crisis levels, charities can hope for a better than expected economic recovery, or work harder to get a larger slice of a smaller pie.

Thanks for this - I work in major giving at a larg...

2009-11-12T12:23:35.406Z

Thanks for this - I work in major giving at a large charity and I have to say I find the insistence that major giving isn't being impacted by the recession pretty hard to swallow.

I think most people I know 'on the ground' will tell you that it really is - one of the major things we've struggled with is project closures due to the recession. Our income will be considerably down this year because donors giving at a higher level aren't keen to redirect their donations to another area, I also think they want to make absolutely sure we're a safe pair of hands before they invest any more in us.

We know that things are really tough in the major giving world, and articles telling us it isn't 'that bad' just make it even harder.

Here's hoping for a bumper Christmas!

While certainly SROI doesn't capture perfectly all...

2009-11-11T21:02:05.229Z

While certainly SROI doesn't capture perfectly all the "well-being", it's important to consider how nonprofits and charities can tailor their measurements of SROI to be more effective. Educate!, a non profit working in Uganda to create a model of education to empower Africa's next generation of leaders, measures SROI based on the impact students have on their communities and acknowledges that it's precise, but not necessarily accurate as it cannot always measure the full social impact of students. Acknowledging that it is not accurate, however, Educate! can still benefit from SROI metrics by modifying our programs based on feedback from SROI.