This is a transcript of an interview between Eric Friedman (EF), author of Reinventing Philanthropy: A Framework for More Effective Giving, and the book’s publisher, Potomac Books (PB). Media are free to reprint quotes from it.
PB: Please give a brief description of your new book, Reinventing Philanthropy: A Framework for More Effective Giving.
EF: Reinventing Philanthropy challenges donors to maximize the impacts of their gifts and helps them think about how to meet that challenge. There are a lot of good causes, but they are not equally good. Philanthropy is underperforming its potential because donors don’t think about the trade-offs of different types of giving. Nonprofits don’t have effective solutions for many of the issues that get the most donations, but there are also some very big problems that we don’t often hear about even though philanthropy has great solutions within reach.
PB: Some might consider you an outsider because you’re not a well-known donor and aren’t affiliated with a foundation or other nonprofit. What makes you qualified to write this book?
EF: That’s a really good question. I wasn’t originally planning to write a book. I was just trying to decide what to do with my own donations. After reading many books on philanthropy, going to conferences, and talking with a lot of people who were knowledgeable about giving, I realized that very few of the experts on philanthropy thought about giving the same way I did. Their answers to my most important questions were inadequate. I didn’t expect simple answers to difficult questions, but the lack of critical thinking surprised me. Sometimes it takes an outsider to challenge established views.
PB: And what were you asking? How were the answers others provided inadequate?
EF: I was asking questions about how donors should choose the causes they support. How can they maximize the impact of their giving? What charitable causes and organizations have the greatest positive impact? I was told that it was impossible to compare the impacts of diverse causes like education, poverty alleviation, and healthcare. That I should focus on causes based on my personal interests and passions, such as identifying a disease that has affected my life, a geographic region I want to support, or a school or program that helped me. It made no sense to me that “best practice” was for the strategic direction of philanthropy to be dictated by my personal experiences, rather than assessing the needs of potential recipients and the effectiveness of programs.
PB: Are you saying that donors shouldn’t give to the causes they care about?
EF: People can do anything they want with their own money. But people who want to do the most good with their donations have to look broadly for the best giving opportunities.
PB: What else is different about your book?
EF: Reinventing Philanthropy doesn’t praise every donor. Actually, it criticizes a lot of donors. Most generous, well-intentioned donors are failing to meet their potential. They aren’t giving to the most impactful charities. Sometimes I felt like a jerk criticizing really good people, but it’s important to discuss this candidly. This may shock most of the nonprofit community, which is accustomed to blanket praise for nearly all donors.
PB: You mentioned that to maximize impact, donors usually shouldn’t focus on the areas with which they have personal connections. One of the reasons people give to causes they have personal ties to is because it makes them feel good. Does your approach remove positive emotions from giving?
EF: Absolutely not. We aren’t robots. Giving is a wonderful thing, and people who give generously should feel really good about it. The reason people feel good when they give is because it helps others. By using a more thoughtful approach, donors will have more confidence that they are helping others as much as possible, which should make them feel even better about what they’re doing. I know I feel better when I see evidence of my donations doing a lot of good.
PB: There are a few charity rating agencies. What’s wrong with donors just using them to find the best charities?
EF: Most of the big charity rating agencies are better at helping donors avoid fraudulent and wasteful charities than finding the charities that make the greatest impact. Some of the charity rating agencies give their top ratings to thousands of nonprofits, and they have highly rated organizations focusing on nearly every cause. So their ratings are watered down, expressing little conviction about what really works best. They focus a lot of attention on overhead costs, but being a high-impact charity is not just about having low overhead. What does it really mean if a charity only allocates 10% of its budget to overhead? Donors should focus on how the other 90% is being spent.
PB: Does your approach develop some sort of formula to objectively determine the best causes and organizations?
EF: No. There needs to be more thought than that. Instead, donors need to understand what questions they should ask and how they can evaluate responses. Being effective requires researching the facts and being really thoughtful about how to act on them. Reinventing Philanthropy tries to help donors think through these issues.
PB: What do you think are the most important questions donors should be asking?
EF: Some of the major questions donors should ask about a charitable opportunity are:
- How important is the problem the organization is trying to solve?
- Does the nonprofit have the ability to help solve it?
- How cost-effective are the solutions?
- What would be the incremental impact of additional donations?
PB: How is this different from what most donors are doing now?
EF: Many donors respond to fundraising pitches designed to appeal to their emotions, but ignore evidence about what actually works and what doesn’t. They give to causes and organizations they are emotionally attached to, like the universities they attended, the types of art and cultural activities they enjoy, and the medical causes that have touched their lives. This is very different from trying to do as much good as possible. A better approach is for donors to try to understand which areas have the greatest needs and what solutions are most achievable. Donors have to figure out what the world needs, not what they personally want the world to have.
PB: How much of a difference can your approach make?
EF: As an example, although the world’s most effective charities can save a life for between $200 and $5,000, the median life-saving intervention in America costs about $2.2 million. Though these estimates are rough, the difference is staggering. The ultra-cheap ways to save lives are, for instance, providing mosquito nets to prevent malaria and expanding immunization coverage—efforts that typically don’t get funded by donors who choose where to give based on their own life experiences. Most people in America don’t spend much time thinking about these issues because we don’t often know people who have suffered from diseases like malaria. So the causes that get the most funds are very different than the ones with the most bang for the buck.
PB: What is most common mistake most donors make?
EF: That’s a really good question. The three most important decisions donors make are the geography to focus on, the charitable cause, and the nonprofit to support. Of course, these are interrelated. For the decision about geography, most donors don’t think about impact. Many American donors give to causes focused on America—they say that charity begins at home. There are a lot of needy people in this country, but the problems remaining here tend to be difficult and expensive to solve. As one of the wealthiest countries in the world, we’ve already fixed many of the problems with cheap and easy solutions. For example, we have clean water, soup kitchens, and public health programs, so Americans rarely die of things like diarrhea, malnutrition, and malaria. In poor countries, there are still millions of people dying of easily preventable diseases. Donors can get a lot more bang for the buck by giving globally. Donating internationally is not just a question of whether to help someone “here” versus “there,” but whether to provide a little help to one person here or a lot of help to ten people there.
PB: One of the most common ways Americans give to poor countries is to support disaster relief, like for the earthquake in Haiti and the Indian Ocean tsunami. What are your thoughts on that?
EF: When the horrific pictures of these disasters appear on TV, compassionate people are often driven to donate to the relief efforts. The logistical challenges in administering emergency aid are massive because local infrastructure is often destroyed, so it is extremely challenging to help those in need. Elsewhere in the world, 19,000 children die every day of preventable causes, mostly related to a lack of sanitation and basic medical care. The news media doesn’t often cover this, but the tragedies are just as real. And more important for donors, gifts to developmental charities that focus on the 19,000 are probably more effective at helping the needy than those dedicated to disaster relief. In fact, disaster relief is known to be a less efficient form of assistance than many other forms of developmental international aid. So although I applaud those who are compassionate to give to any good cause, donors who want to do the most good should consider shifting their focus from disaster relief to international development.
PB: What do you recommend for donors who want their giving to make a big impact, but aren’t able to spend a lot of time figuring out what to do?
EF: Donors who want to maximize the impact of their giving but don’t have time to research the different options should get advice from someone who does. My favorite charity evaluator is GiveWell (http://www.givewell.org). Unlike the large charity rating agencies, GiveWell doesn’t try to rate thousands of organizations—they only try to identify the very best ones. And they evaluate them primarily based on their program quality, rather than the percentage spent on overhead. They do a good job explaining their reasoning for each organization.
PB: What do you hope to achieve with this book?
EF: I hope donors will direct more of their giving to high-impact charities and unabashedly reduce donations to everyone else. Reinventing Philanthropy can make the world a better place by improving how people give.
PB: Where can readers get more information about your book?
EF: The website is http://www.reinventingphilanthropy.com. It has a lot of information about the book, and the first chapter is posted as well. The book is available at Amazon.com as well as many other booksellers.