Social Innovations
Obama’s Missed Opportunity to Change Charitable Giving
Last week the White House announced the charities that President Obama selected to receive the funds from his Nobel Peace Prize award. The President selected a variety of charities, mostly educational, as well as giving $250,000 to the Clinton-Bush Haiti Fund. The choices generally elicited praise, but I think the Obama White House missed a huge opportunity—you might even say Obama wasted the most valuable capital he had when making the announcement... (continue reading this blog post)
Last week the White House announced the charities that President Obama selected to receive the funds from his Nobel Peace Prize award. The President selected a variety of charities, mostly educational, as well as giving $250,000 to the Clinton-Bush Haiti Fund. The choices generally elicited praise, but I think the Obama White House missed a huge opportunity—you might even say Obama wasted the most valuable capital he had when making the announcement.
You see, while the White House announced what charities were receiving the funds and in which amounts—it told us absolutely nothing about what criteria were used to select the charities and what information was used to inform those choices. In other areas of policy (including health care, education and the Social Innovation Fund) the Obama administration has been pushing hard for evidence-based decision-making. Despite a great deal of criticism from many parties, the administration has stood its ground on its demands for evidence before it allocates funds.
What better way would there have been to demonstrate the courage of their convictions than to use the same standards for the Nobel Prize gifts? Obama could have radically changed the debate on how to allocate charitable funds—whether from individual donors or large foundations—by detailing a set of criteria for choosing charities. He could have raised the bar even higher by tying the amount allocated to each charity to the evidence base from which it was working.
Doing so would easily have changed how tens if not hundreds of millions of dollars are given in the United States. It would have set a precedent for large foundations to publicly detail their reasoning for the grants they make. It would have galvanized the growing movement for the better allocation of philanthropic capital.
As it was, the mainstream media was left examining the overhead costs of the charities selected—the worst way to evaluate charities. But absent a clear statement from the White House about how the charities were chosen, what else was there to consider?
Obama’s closed-mouthed approach to the charitable gifts means that in just a few months, practically no one will remember who received the funds. They will simply disappear into the ocean of annual giving by Americans—giving that could have been much more effective if it had a role model for wise giving based on evidence.
Tim Ogden is Editor-in-Chief of Philanthropy Action, a web journal for donors and Executive Partner at Sona Partners, a thought leadership communications firm. He has collaborated on, edited or ghostwritten more than a dozen books published by Tier One publishers and co-authored or ghostwritten several articles for Harvard Business Review. His work has appeared in Miller-McCune magazine, Alliance magazine and on Harvard Business Review online and Business Week online. He is frequently quoted in the Wall Street Journal, New York Times, Chronicle of Philanthropy, and Financial Times.
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COMMENTS
BY Mark, Generated from Facebook.com by SSIR
ON March 23, 2010 08:49 PM
Foundations and corporate philanthropists already know what criteria they use in evaluating evidence and certainly wouldn’t change their policy approach based on a few comments about Obama’s decision making process. Short of imforming the public on (one) way in which to analylze ROI for charities , I’m not sure what him delving into this might acomplish beyond making it look like he was hoping to score political points for the gift. For anyone interested in this I suggest checking out www.charitynavigator.org where the typical donor will find everything they need to become informed.
BY Samantha
ON March 23, 2010 08:50 PM
Websites like charitynavigator.org, greatnonprofits.org, givewell.net, myphilanthropedia.org, guidestar.org etc. are all great resources to find out more (objective) information about a nonprofit’s mission, spending, and impact. Do you think typical donors have anything to gain from knowing how philanthropists in the public eye (from Obama and Bill to Oprah and Angelina) choose their charities?
BY Mark, Generated from Facebook.com by SSIR
ON March 23, 2010 08:51 PM
Interesting qauestion…I would say they do, for three reasons. First, if I’m donating to any charity, I would want as much information as possible not only on impact, but also on the effective use of resources…bang for the buck so to speak. Giving can be looked at like any other consumer product or service, and the uneducated consumer gets taken.
Second, the non profit sector has lost a lot of trust with the public in view of a perceived lack of accountability. Serious donors motivated by a desire for impact can benefit from knowing what constitutes successful work. Finally, knowing what kind of stressors NPO’s have to deal with in the evidence based environment, ought to bring a new sense of respect for the difficulty of competing in this field for funds.
BY Sue, Generated from Facebook.com by SSIR
ON March 23, 2010 08:51 PM
@ Mark RE: “the non profit sector has lost a lot of trust with the public in view of a perceived lack of accountability. ” Where’s the evidence to back this statement up? I believe impact/benefit derived is required of any business—for or non profit. People welcome it when they see it, and they turn away when they don’t whether you’re Toyota or the Red Cross (following 9/11 when they took a hit from a perceived bait and switch). Nonprofits have upped the ante on communicating about accountability (not necessarily meaning they became more accountable than they were but they did respond to the donor need for more info).
@SSIR I agree that Char Nav and like resources do meet a need, offering metrics that can be of value. But I think it’s important to go beyond this, including anecdotal evidence (why Obama, on a personal level, responded to who he did; not because he needs to justify it but because it’s interesting to see how people feel and think about their philanthropy—in fact, this is one of the THE MOST INTERESTING conversations we can have in life, and why I’ve been in development work for nearly 20 years.
Mostly thought, at the end of the day, I just think it’s fantastic he used the Nobel Prize to do more good in the world.
BY Tim Ogden
ON March 24, 2010 09:56 AM
Mark—I think you’ve got it entirely backwards. The lack of information about how Obama chose the charities shows that it was all a political calculation, not a reasoned attempt to do the most good with the money.
Second, none of the most important information for evaluating charities—evidence of effectiveness—is currently available on Charity Navigator. Even Charity Navigator agrees that people should not be making choices about the charities they give to based on financial information, see: http://bit.ly/75yhQ9
The fact is that the majority of donors do not yet put serious thought into finding charities that will have the most impact—nor are they willing to fund the necessary evaluation, learning and risk-taking by charities that we need if the sector is to make a significant difference. Obama could have changed that—and he didn’t. And that means that the donations he did make are largely meaningless.