How to Give Your Fortune Away

You write a check to charity, but does it really make a difference? Enter the team of Penn researchers cracking the code on what kind of giving works best. (Surprise: It’s not always what you think)

GIVING, SAYS JAMES BARNES, chief relationship officer for the Malvern-based Vanguard Charitable Endowment Program—one of the world’s largest philanthropic nonprofits—is “an immensely complicated field, and it’s made so by human beings. It gets very emotional.” Sometimes what feels good isn’t what does good, and vice versa.

Ann Nolan Reese says her interest in CHIP comes from “a longing to apply the rigor of financial and economic analysis to the act of giving.” Rather than sprinkle donations around, she focuses on causes that are personally meaningful, particularly education and child welfare. “The cause is my heart,” she says, “but the organization is my head.” Reese is a founder of the nonprofit Center for Adoption Policy, which works to enable domestic and international adoptions. She has a special interest in orphans; last decade, she adopted two Romanian kids. When the Haitian earthquake hit last year, she knew how to help children there, thanks to CHIP’s research. “Different kinds of help matter at different stages,” she explains. “In the immediate wake of a disaster, the job isn’t to feed kids; it’s to find out who they are and where they are and put a bracelet on their arm.” So in Haiti, she gave to the Red Cross and Save the Children, which have expertise in first-response work. When others asked her how to help, she steered them toward CHIP’s “Haiti: How Can I Help?” report, which addresses longer-term issues: health, education, destitution. The juxtaposition of numbers and need can be jarring: $1,563 moves a woman and her family out of extreme poverty and creates a self-sustaining household; at Haiti’s Hôpital Albert Schweitzer, $2,775 saves a child’s life.

The move toward metrics has brought some surprises. “Our team is both highly trained and used to being wrong,” Rosqueta says, grinning. Everybody’s heard of Scared Straight, which introduces at-risk young people to the consequences of bad behavior by taking them to visit prisons. Nobody’s heard of another charity, the Nurse-Family Partnership, which unites first-time low-income mothers with RNs who make home visits from pregnancy until a child’s second birthday. Yet evidence from 30 years of NFP’s work shows a 59 percent reduction in arrests by the time that child turns 15, among other benefits, for a return of nearly six bucks in social benefits for every dollar spent—increased tax revenues, lower welfare costs, reduced costs for health care and other social services. And the high-brand-awareness Scared Straight? A 2003 study found that participants were up to 28 percent more likely to offend in the future than they were before going through the program. It was doing more harm than good.

The push to assess impact is causing charitable organizations to rethink how they judge their own performance. For years, donors have been told to evaluate charities using factors like overhead ratios—how much they take in versus how much they spend on staffing and administration. But CHIP’s high-net-worth donors are perfectly willing to pay for expensive leadership, because their business experience tells them that good leadership equals efficiency.

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