Wednesday, January 16, 2008


Search any philanthropy blog or do aGoogle search for GiveWell, and you will find a firestorm of comments, critiques, give-and-takes, and back-and-forth in the philanthropy blogging "community".

Apparently the co-founding executive of GiveWell -- the latest and greatest effort to rank and rate nonprofits -- was caught anonymously promoting his group through blog comments, and denigrating competitive groups such as CharityNavigator. (He apparently left anonymous comments and questions on blogs, then responded anonymously to them, and highly rating his own answer, etc.).

I am not even going to offer links to all this, because it is very redundant, difficult to digest, and you can find it yourself if you want to spend your time that way.

So why am I even bringing it up?

Because the important core questions are buried by the broiling controversy.

They are: Does it make sense to rate and rank nonprofits? If so, to what end? And what is the appropriate way to do so?

Understanding and "judging" nonprofit organizations is a more nuanced and complex effort than purely examining financial documents, establishing a formula for the correct amount spent on "overhead", etc.

On the other hand, the web does enable easier access to more information than previously available. For example, Guidestar makes the tax returns (form 990) of nonprofit readily available, where paper copies previously had to be requested on an individual basis.

The GiveWell approach apparently attempts to go beyond pure numbers, using grants as "bait" to find out as much as possible about groups, and then award grants to those they regard as the "best".

Subjectivity, Social Capital, and Proximity

The vast number of nonprofits alone means that subjectivity, social capital amongst funders and nonprofit leaders, and proximity all play important and valuable roles in deciding who gets what.
This negative side of this: Those who have the social capital win; those with less access are left out. The less equitable the socio-economic situation is, the less equitable the sector is.

The positive side of this: Social capital is a liquid asset. People and organizations can be upwardly mobile in a marketplace based on relationships, trust, etc.


In the for-profit world, it is best practice to create a brand and aura around a company, and to grow demand for a product that many not have been previously needed. Marketing strategies appeal to base human instincts (jealousy, sex appeal, desire to be wanted, etc) to fuel sales - even when a product has absolutely nothing to do with the attractive person on the billboard. This is accepted as fine, as long as customers go along for the ride, and the product or company behaviour does not betray the image.

While the capitalist system is supposedly built on the rationale choice of individual consumers, the secret hiding in plane view is that the market does everything it can do steer us away from rationality, so that we rely on instinct and feeling. Heart rules over head.

Well, my friends, I am afraid to say that nonprofits - where the heart really belongs at play - subjectivity also plays a critical role.

If we were to be completely rationale in making choices, donors and foundations would have to rank each and every possible worthy cause before deciding on about 3-5 focus areas. Instead, the personal history, values, politics and passions of donors drive them to identify issues and organizations that are meaningful to them.

Social Capital

One common saying in philanthropy: we don't fund an organization, we fund a leader. The relationships, trustworthiness, experience, politics, reputation (at large, with peers, with other funders, etc.), likability, of any given nonprofit leader can influence and sway donor and funder views.


The vast and ever-growing number and variety of organizations in the nonprofit sector, combined with the general provincial nature of philanthropic giving, means that proximity matters. Social capital tends to have a relationship with "place" of one sort or another as well.

Of course the web, air travel, the demise of long-distance rates via cell phones, and other factors help to mitigate the limited nature of place. However, organized philanthropic giving on the whole remains locally-driven by high-touch, low-tech people and processes.

Just answer this question: which fundraising strategy is more likely to be successful: sending out 100 copies of the same proposal to 100 funders (with the only change in the name and address), or meeting in-person two times each with ten funders? Why did you answer the way you did?

The vastness also means that nonprofits are always changing - new start-ups and grassroots groups are created, while great executives leave existent groups or they simply become less relevant for some reason. This is a very "liquid" field, like the earth itself, constantly shifting, evolving, changing. Try to find rate and rank sand castles. By the time you go to print, the whole scene has changed.

Given all these factors, I question the critical value of ranking and rating nonprofits.

One additional note:

Given the fact that GiveWell was created by two Wall Streeters, perhaps their poor performance will take some of the wind out of the sails of those who believe that the magic bullet solution to the nonprofit sector's human resources and leadership needs are to important management from the business world.

Thursday, January 10, 2008

Generational Change: The Undiscussed Identity-Politics of the 2008 Election?

Happy New Year, everyone! Given the interesting twists and turns of the poilitical campaign, I thought I want to focus this post on how generational matters are playing out in the election. Please note that this post is not partisan and does not endorse any candidate.

Politicians from three of the four living generations are battling it out for the White House.

  • Senator John McCain joked that he is far from being a kid. Perhaps he fits more closely in the mold of the Greatest Generation.
  • Senator Hillary Clinton encapsulates the Baby Boomer political activist, and Governor Mike Hukabee plays light '60s tunes with his rock band.
  • Senator Barack Obama, who just made it into Generation X, is pulling on the energy of his generation and the Millennials (Generation Y) who are now students.His website even includes a group called Generation Obama.
The campaign fought between Bill Clinton and George H.W. Bush in '92 -- followed by the contest between Bob Dole and Mr. Clinton in 1996 -- signified the struggle of Baby Boomers to take ultimate political power from the hands of the Greatest Generation. Today, the challenge Obama has mounted against Mrs. Clinton symbolizes Generation X making a play for further generational change in the White House.

One must wonder, as with all things generational: How much is the "inexperience" argument about Obama, being used by the Clinton campaign, a veiled generational jab? Will Baby Boomers never trust anyone under 60?

In a political blog piece dubbed Escape from Camelot, Matt Bai notes that some Baby Boomers have compared Obama to one or another Kennedy. Granted, it is human nature to look for comparison of today's leaders with those from the past. Yet Bai describes something less healthy beneath these analogies:
I was born about three months after Robert Kennedy’s death, so I’ll probably never understand what it is about the Kennedy legend that seems to have suspended Democrats of a certain generation in a specific moment in time, as stuck in their frame of reference as an insect in amber. Every four years, it seems, since I first became aware of politics, Democrats have been trying to transform someone into a Kennedy, almost always with disappointing results...

There’s something unhealthy about all this Baby-Boomer reminiscing, because it forces Democrats always to look backward, to serve some unrealized ideal of government rather than a more modern and relevant vision of what government might become. There is a faint line between nostalgia and delusion, and with each passing year, those liberals who long for the reincarnation of their heroes seem ever closer to obliterating it.
Perhaps many political battles today witness liberals and progressives trying to complete the unfulfilled social change agenda(s) of the 1960s, and conservatives working diligently to roll-back these changes to return to the more traditional ways of the 1950s. The past ideological battles and bruises of the Baby Boomers remain their reference point for current goals and strategies.

This battle is waged within the philanthropy community as well. Individual donors and program officers, foundations, and associations have staked-out "political" positions (with a lower-case "p"), utilizing means such as grants, conferences and research publications to advocate for politically-loaded agendas such as funding the school vouchers movement on the right, or supporting community organizing in marginalized communities on the left, as examples.

In politics, philanthropy, and other spheres, Boomer politics leave emerging generations with the intertwined challenges of forming responses to the Baby Boomers (such sharing in or rejecting their nostalgia), and creating their own visions, strategies and approaches to improving society. There is much talk today about how emerging leaders bring technological savvy to political campaigns and to the philanthropic workplace. Online communities and cell phone communications didnt exist when Baby Boomers hashed out their original battles, so htese become a realm that Generation X and Y can claim as their own to some extent.

Yet a narrow focus on technology leaves two important questions unaddressed:
  • How do the emerging generations define their own visions and strategies for society?
  • And how do these new generations create a healthy relationship with the generations on whose shoulders we stand, rather than remaining in unhealthily relations with them (choosing to either defer to, or rebel from, theBaby Boomers and Greatest Generation)?
Given EPIP's mission of advancing social justice philanthropy, a third question comes to mind, borrowing from Bai's critique of Boomer politics:
  • How do we craft 'a more modern and relevant vision' of what social justice philanthropy might become, rather than serve a backward-looking, 'unrealized ideal'?
In the political arena, perhaps politicians such as Barack Obama (there are numerous Gen Xers running for political office at the local, state and federal levels) offer us a clue. He seems to be able to attract an inter-generational base of supporters. And his campaign has utilized the more holistic approach of Generation X and Y in its efforts to create something more holistic that crosses ideological, racial, and geographic barriers.

I believe it is still difficult to answer the questions I have posed. It seems to me that Generation X is still in a state of reaction to the Baby Boomer. Perhaps our Millennial friends are less "in the shadow" of the Boom, and are more able to define a new path. Or perhaps Generation X can be the bridge that brings the best legacies of previous generations to the needed innovations ahead. And who knows what the generations yet-to-come will add to the mix. Only time can tell.

I simply hope that as leaders from these diffenrent generations battle it out for control -- whether it's in politics, philanthropy, nonprofits, or elsewhere -- that we maintain healthy respect for our differences.