When it comes to discussions I’ve had regarding the work of nonprofits, a statement such as this ultimately works its way into the conversation “Yes, but do you realize that only x% of the donations made to such and such nonprofit actually end up funding their programs?! They’re not effective, they’re using donations to pad their personal wallet, travel, etc? I only give my money to organizations that make good use of my donation.”

I get the sentiment of such a statement; the desire to be informed and make sure that our donations are being used in a way that advances actual social change and progress. No one want’s to be conned. The problem is that the metric so many of us turn to in order to determine an organization’s effectiveness, the % of donations spent on the nonprofit’s  programs, has major shortcomings.

I spent a year of grad school picking apart this and other metrics that are used to rate nonprofits. I  focused on one nonprofit as a case study, structuring my research in such a way that I was able to determine the ways in which the commonly used metrics accurately (or inaccurately) conveyed the effectiveness of the nonprofit’s work.

What I discovered was that the most widely used metrics fail to incorporate answers to important questions such as:

  • what kind of labor and subsequently pay is required to do the work at hand? (e.g. will short term, untrained volunteers suffice or are long term, trained & salaried personnel required (lawyers, doctors, accountants, geographers, etc)?)
  • Is the work being done long or short term? Is it dangerous work requiring costly equipment and/or staff to aid in the safety of the volunteers?
  • Is the travel to the region in which the work is occurring long or short term, expensive or inexpensive?
  • Is the nonprofit older or newer? (e.g. Race for the Cure doesn’t have to spend as large a % of their donations on raising awareness for their organization as a newer organization does)
  • Does the organization have a handful of donors (or a single donor) who covers all of their overhead, enabling the organization to say that all (or a large %) of the money being donated to the org. goes to programs, thus slightly skewing the metric?
You see, utilizing a one-size-fits-all metric to rate organizations with highly varied  missions and structures is futile. There has to be a better way.

As engaged and intelligent participants in the work of social justice, we absolutely should do our homework, asking the tough questions and gathering facts, metrics, etc. on the front end in order to make the most informed donation decisions possible. My caution is simply to keep in mind that the metrics most often used to make this decision are far from perfect; be slow to take the data you collect at face value and ask yourself questions such as those outlined above before making a final decision.