If you’re searching for a nonprofit to support, you’ll be facing a pretty crowded marketplace. According to the National Center for Charitable Statistics, there are now more than 1.5 million nonprofits operating in the United States alone. So how do you sift through all these options to find the charities that are working effectively to address the issues that really matter?
Start Asking Questions.
Once you’ve identified a potential nonprofit to support working in an area you’re passionate about, don’t be afraid to ask a few questions before giving your money away. Any nonprofit worth its salt will be more than happy to make members of their development team available for a short phone call or email exchange. And frankly, if your polite inquiries are met with any resistance, that’s a big red flag. With that in mind, here are 7 question you can ask to help determine if a nonprofit is worthy of your support:
1. Who Are You and What Do You Do?
Focused organizations should be able to provide a clear and concise explanation of their mission, goals, and programs. If it can’t, there’s a good chance it’s not working effectively to address any problems, let alone the important one you want to support.
2. How Did Your Organization Design Its Programs?
High functioning nonprofits design their programs using evidence-based research, rather than guesswork or best intentions. If the nonprofit you want to support is following a proven method, you can give confidently knowing your money will support programs making real change.
3. What’s Your Most Successful Program and Why?
Good nonprofits can describe their best programs and provide insight on why they’re working. This will also give a potential donor valuable insight into the organization’s success.
4. What Are Your Organization’s Goals?
Nonprofit programs should be working to achieve a larger goal. If an organization isn’t able to articulate what they’re working towards, it’s programs are likely unfocused and ineffective.
5. What Progress Are You Making Towards These Goals?
This question allows you to judge the organization’s overall success, but also allows you to assess how they measure success in the first place. If their accomplishments don’t seem like accomplishments at all, you might want to start looking in another direction.
6. How Does the Nonprofit Collaborate?
There are likely many other organizations working in your target nonprofit’s mission space. Do they work with any of those other organizations to accomplish their shared goal? If so, what is their collaboration strategy and has it been successful? If not, why not?
7. How Does the Nonprofit Communicate?
The best nonprofits have clear strategies for communicating with their donors and nurturing an ongoing relationship. So before you donate, consider how you’ll be brought into the organization after you’ve brought out your checkbook. Will your continued support be valued or assumed? After you’ve made your donation, will you feel included as a vital part of this important undertaking or will you be an outsider? Additionally, how does the nonprofit communicate about its finances? Are they transparent or hidden?
Ask Questions. Gain Information. Give With Confidence
Charitable donations are desperately needed throughout the United States and the world. But, that doesn’t mean you should turn your hard-earned treasure over to just any organization. Instead, you want to partner with organizations that are working efficiently and effectively toward goals that matter. Taking a few minutes to dig just a little deeper into an organization’s structure will help you give with confidence and make your money go that much further.
There’s a growing trend among CEO’s, business leaders, and investors that corporate America should be doing more to positively impact the world. Driven largely by consumer demand, what started as quirky one-for-one give-back business models have morphed into a ground-up reexamination about the role corporations play in society. The public now expects — and in some cases, demand — corporations give back the larger community in meaningful ways. And this new attitude has made its way to the highest echelons of the investment community.
Earlier this year, the founder of the world’s largest investment firm sent an open letter to the leaders of the world’s largest companies warning them that they better be good with their money, or risk losing their major investors.
In his letter, BlackRock CEO Larry Fink said:
“Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
Mr. Fink’s statement garnered a lot of attention and signaled to many that the biggest firms in the world were finally hearing the message consumers have been repeatedly sending. But even before Fink’s letter, some organizations were already riding this new wave of corporate responsibility by creating investment products comprised of what they determined to be “socially conscious” corporations.
Called impact investing, this strategy makes investments in companies, organizations, and funds that make positive and measurable social and environmental impacts, alongside a financial return. But how impactful is this type of impact investing really? As with many things in life, you have to dig a little deeper than the marketing message to uncover the truth.
In many cases, the true impact of these investment vehicles depend on how you define impact. For example, the Vanguard FTSE Social Index Fund Investor Shares (VFTSX) “tracks the investment performance of the FTSE4Good US Select Index, a benchmark of large and mid-capitalization stocks, that are screened based on social criteria such as workplace issues, environmental issues, product safety, human rights, and corporate responsibility.” While that all sounds well and good, a quick glance at the companies included in the social index fund makes you wonder what impact they’re truly making.
The fund claims to invest in companies that rank well for corporate responsibility, but Wells Fargo & Co. is among its 10 largest holdings. If you’ve paid any attention to the news over the last year, you know that Well Fargo has not acted like a good corporate citizen. In fact, they’ve served as the model for everything wrong with the big banking industry.
What is the Company’s True Purpose
The point here is not to nitpick because under scrutiny, no company is perfect. Instead, it’s to simply point out that achieving real change is going to require more than a nicely worded letter, catchy fund title, and a few narrowly-drawn investment rules. Instead, true change will require a ground-up redefinition of corporate and civic responsibility and perhaps even capitalism itself.
This isn’t a pipe dream. A new generation of entrepreneurs and corporate leaders understand that profit and impact are not mutually exclusive. And in many cases, an authentic impact strategy can actually drive profits. This is how we built GroundSwell, with a social purpose at the core of our business model that benefits our investors, our company, and — most importantly — our nonprofit partners.
We may never realize a future where all corporations work towards making positive social impact alongside profit, but everyday we’re able to make better decisions about who we support and why. So as you’re making your own investment choices, take some time to research these so-called impact funds and their holdings. And while you’re at it, check out some local investing options. Then determine how authentic their desire is to make change and how effective you think they’ll be. Is doing good a core component of their mission or simply a shrewd marketing investment? That could mean the difference between a true impact and simple window dressing.
So what’s behind this uptick? Chuck Longfield, chief scientist for Blackbaud and senior advisor for the Blackbaud Institute, cited an unusual if not oxymoronic source for all these new donations: rage giving.
“Longfield, who authored the report, attributed very little of the 2017 surge to tax reform, citing, rather, increases in discretionary income and “rage giving.” Despite economic rebounds from years earlier, donors had more money to do with what they desired in 2017 than in years past. The divisive political nature of the country also had a role. Donors, conservative and liberal alike, engaged in “rage giving” in 2017 to support their ideals. Liberal voters have been most successful in this regard, Longfield said, citing donation increases for the American Civil Liberties Union, Planned Parenthood, and the Southern Poverty Law Center.”
These statistics are remarkable because they stand in stark contrast to donor behavior from previous years. In fact, between 2010 and 2016, households making first-time gifts to new organizations actually declined by more than 16%.
Longfield’s study goes on to discuss how nonprofits can properly nurture all these new relationships, but in our view, that’s not the real story. Lost in all this is the obvious frustration and helplessness motivating this new giving.
Sustained Change is Needed
It’s clear to even the casual observer that there’s a lot of tension and anger at play in our current political moment. And at the heart of these negative emotions is a profound sense that something is very wrong and it’s not getting better.
Now we can argue endlessly about what that something is, and if you watch cable news, you know that we certainly do. But now we’ve also started lashing out in a way. Reacting to the negatively with a flood of new money supporting the nonprofit organizations we hope can help turn the tide.
But is this an efficient use of our money? Probably not. These emotional donations tend to flow to the highest profile organizations working nationwide or around the world. Meanwhile, many smaller groups that are driving real change at the community level are being overlooked. So is there a way to harness this negativity in a more intentional way so that organizations working on the ground can accomplish sustained change? There will be soon.
GroundSwell was founded as a social purpose corporation, which means the common good is woven into our corporate DNA. We built a framework that provides philanthropic organizations a new and sustainable source of revenue, while at the same time, giving their supporters a new form of quiet activism. This socially-conscious consumerism (we like to call it purchasing with purpose) allows them to choose what their economic activity (buying stuff and paying bills) supports.
It is, perhaps, the opposite of rage giving. Instead, it’s focused, consistent, and intentional – a rising tide. Imagine what will be accomplished when millions of individuals are engaged in this way, instead of just yelling at each other on the internet. What could we accomplish if everyone put their money where their mouth is?
Would all those somethings start getting better?
We really believe they will.
Click here to learn more about the GroundSwell program.
As we’ve worked to roll-out our first card programs over the last few years, we’re often asked about our competitors. And while there are other pre-paid card companies working with affinity groups, we don’t really view them as direct competition. Why? Well our mission has always been about helping nonprofit and philanthropic organizations create sustainable revenue sources. Unfortunately, there are more of these underfunded organizations than we could possibly help. So, we’ll be thrilled if one of our so-called competitors can help another nonprofit become more successful. Because in the end, it’s an extension of our own mission. That being said, there are important differences between GroundSwell and some of the other pre-paid card companies working in the industry today.
Long Term Plans
We recently ran across this post in the Delaware Business times about Prepaidian, a company that could rightfully be called a competitor. Much like GroundSwell, Prepaidian offers branded pre-paid debit card programs and has worked with local Delaware branches of the Boys and Girl’s Club and Goodwill as well as national organization like USA Volleyball. But as the Prepaidian founders were explaining their long-term business strategy, we ran across a quote that neatly illustrated how GroundSwell is different. Here’s what Jim Shanahan, CEO and founder of Prepaidian said about their company’s long-term strategy:
“Right now, we’re seeking investor capital in the $2 million to $5 million range over the next six months to get this business scaled and dramatically expanded, leveraging our ‘first-mover advantage,’ ” said Shahahan. “Virtually all of that will go into branding, marketing and business development.”
“With that kind of investment, and the successful launch and expansion it will fuel, this company will be ready for acquisition by one of the big national or global financial services companies in three to five years at something in the $100 million range, perhaps more, according to what industry leaders tell us,” said Shanahan.
Did you catch that? Cut through all the startup speak about leveraging first-mover advantage and you’ll see that Shanahan plans to sell his company to a big national bank or global financial services company in three to five years. Prepaidian isn’t a long-term endeavor. It’s a short-term play that comes with a big personal payoff for its founders.
So What’s the Difference?
Of course, founders have every right to do what they please with their businesses. But this strategy does reveal a critical difference between his company and GroundSwell. For our organization, our stated social purpose isn’t a marketing gimmick or a method to realize a huge financial payoff. Instead, giving back is baked into our company’s DNA. Our founders started GroundSwell not as a means to get rich, but out of a sincere desire to change the world. And we’re doing that by leveraging the tools the big banks have used for years to pad their profits and enrich their shareholders. The same big banks that the Prepaidian founders hope will acquire them sometime in the very near future. Do you think a company owned by a big bank will be more concerned with their nonprofit partner’s success or its own bottom line? If history is any indication, the answer is already clear.
So as you continue to follow the growing pre-paid affinity marketing card industry, remember that not all companies are created equal. Some are using their giveback model as nothing more than a convenient marketing tool. While others – like GroundSwell – are deeply concerned with amplifying the good that’s already happening in the world by helping nonprofit and philanthropic organization be more successful in their work. And we plan on continuing our work for many years to come.
The Rohingya are the World’s Most Persecuted Minority
Have you heard of the Rohingya? If you’re like most Americans, probably not, and that’s understandable. There are so many loud voices competing for our attention everyday, that the quiet voices are often drowned out. And unfortunately, the voice of refugees is too often silent.
The Rohingya are an ethnic Muslim population in Myanmar that many consider to be, “the world’s most persecuted minority.” Nearly the entire Rohingya population live in Rahkine, the country’s western coastal state. Despite living in Myanmar for centuries, the Rohingya are not recognized as one of the country’s official ethnic groups and have been denied citizenship for decades. They enjoy little protection and must get the government’s permission before leaving their home state.
After an outbreak of violence in late 2016, the government conducted a brutal crackdown against the Rohingya by destroying homes and villages and killing an unknown number of people. Government troops stand accused of numerous human rights abuses in the process, and some are accusing Myanmar of conducting an ethnic cleansing campaign. To escape the violence, nearly 500,000 Rohingya have fled to refugee camps in neighboring Bangladesh. By some estimates, 60% of Rohingya villages within Myanmar are completely abandoned. This is a desperate group of stateless people who need the world’s help.
How Do I Learn More?
The podcast Pod Save the World recently aired an episode dedicated to the Rohingya crisis where the host – former President Obama National Security Spokesman Tommy Vietor – interviewed The Nexus Fund Executive Director Sally Smith and New York Times columnist Nick Kristof. Together they provide a succinct overview of the Rohingya’s plight and offer a few suggestions for how people can help. Click the link below to listen:
“The Pie Isn’t Big Enough”
At the end of the episode (22 minute mark), Smith outlines three ways the average person can take action to help the Rohingya. The first is knowledge, which is simply learning about what the Rohingya are facing. Second is social, which means sharing your knowledge with your circle so that awareness increases. And the third is time and money. While most people can’t fly to Bangladesh to volunteer, money is desperately needed to help feed this huge group of refugees. But so far, that isn’t happening. Smith refers to the Rohingya as an “orphan cause” as there are currently no full time donors giving to this issue, because as she says, “the pie isn’t big enough.” In other words, there isn’t enough money to go around.
This is Why We Exist
Smith didn’t know it, but her closing statement perfectly articulates GroundSwell’s mission. We don’t direct existing money to nonprofits or redirect funds from one cause to another. Instead, we generate brand new sources of money that will fund the kind of people and organizations that would help the Rohingya. Our mission is to harness the collective power of commerce to add extra good into the world. And that’s something we desperately needs. If you can afford to give money, we hope you’ll choose to support Rohingya relief efforts. Here are a few links to organizations currently working in the region:
Every time we swipe our plastic cards, a small fee is charged. It’s not much – just a few pennies – but when those fees get multiplied millions of times over, every single day, those pennies really begin to add up. In fact last year alone, credit and debit card purchases generated more than 60 billion dollars in transaction fees. So where did that huge pot of money go? Most of it went right back to the big banks that issued those cards. GroundSwell was founded on the idea that those fees could be used to make the world a better place.
Every time a GroundSwell card is swiped, we collect part of the transaction fee. But instead of keeping those dollars to pad our bottom line, we share them with the people and organizations who are doing real good in the world. Our cards can fund clean water initiatives, wildlife preservation programs, food distribution initiatives, or any effort working towards a greater good. To learn how your organization can get involved in the GroundSwell movement, contact us today and we’ll start doing good together.