Sunday, December 30, 2012

I couldn't do it cheaper on my own

I want to push back against an ever-present charity evaluation metric: the percent of total expenses spent on programs versus general/administrative/fundraising (G&A). Its a popular measurement tool that makes intuitive sense: If I give $100 to a charity that feeds hungry families, shouldn't I expect my $100 will feed a hungry family? If only $75 or $50 or $15 of my money fed a hungry family, then what on earth happened to the rest!? Something must have gone horribly wrong. My money was misused!!

Every major charity evaluator - Charity NavigatorGiveWellGuideStar - use percent of total expenses spent on programs as part of their ranking system. The general wisdom is, the more money spent on programs, the better - 90% or higher is the gold standard, fall below 80% and suspicions about effectiveness abound.

We know that nonprofits must have some overhead expenses. The most effective charities have some paid staff - people who actually carry out the programs like identifying families that need food, then purchasing the food, then delivering the food, then filling out some paperwork to prove the food was purchased and delivered. There are paid staff who collect and organize the paperwork, compile data from that paperwork and create reports to determine how many families were fed, then present the reports to the board of directors and the public. There are staff who solicited your donation by carefully crafting the language of emails, interviewing clients to get compelling stories to share with you, taking photographs of happy recipients to drive home the meaning your gift can have. Someone had to receive your check or credit card donation, properly account for it, send you a tax receipt, and follow-up with a thank you note so, hopefully, you will give again. And the bank or credit card processing company charged that charity some fees for your transaction. Someone had to run payroll to compensate these employees, and pay payroll taxes on their behalf. Someone had to file a tax return with the IRS and the state, and be sure the charity is in compliance with labor laws. Someone had to create and update the website. Someone had to think, hard, about the best way the organization could feed more families. And the staff need office space, computers, perhaps delivery vans and other property and equipment to help carry out their work - and all of that needs to be properly insured.

Lots of these expenses are clearly not program expenses. And that makes us uncomfortable. "I don't want to pay someone's payroll taxes. I don't want to pay for that data entry person. I'm giving money to make a difference for hungry families, so all my money should go to buying and delivering food."

But those payroll taxes and that data entry person is essential to the nonprofit. Someone has to pay for them, or the nonprofit shuts down and there are no programs to speak of.

We create a false dichotomy when we separate the expenses of a nonprofit, classifying program expenses as "good" and G&A expenses as "bad". G&A is not separate from program: it is the delivery system that allows services to reach people in need. Without the delivery system in place - the measurement, the payroll, the legal compliance - hungry families would not be fed, because the nonprofit that feeds them would not exist.

Each nonprofit will have a different delivery system - some may be cheaper than others depending on the type of services they are offering, to whom, and where. Rather than using an arbitrary percentage to determine whether the delivery of services is efficient, ask yourself: could I do it cheaper on my own? Could I get food in the hands of a hungry family for less then $25 or $50 or $85? Maybe if I know the hungry family. Maybe if they are right down the street from me. Maybe if my hourly wage is low. Then yes. I could stop by and see the family to ensure someone will be home (food left on their door-step will likely get stolen, then don't have a phone so I must visit in person), then head to the grocery store and buy $70 worth of food, drive it to the family and drive home, spending $5 on gas, and a total of one hour of my time at $25/hr. Seventy percent on my $100 directly helped the family. But what if that family wasn't home when I dropped by? What if I hit traffic? What if the local grocery store doesn't have fresh fruits or vegetables? The cost for my delivery system can quickly rise. And if the family I'm trying to help is in Kenya, it would cost me thousands of dollars to deliver any help on my own.

G&A expenses are really a societal efficiency - not a waste of charitable gifts. Individuals acting on their own to do good work face high costs. But through a nonprofit vehicle, we can pool our resources to create a streamlined delivery system that lets more of our money do good. I'm happy to pay for the existence of that system, and I think you should be too. The charity delivery system, even if it seems inefficient, is vastly more efficient than what any of us could do on our own.

I hope it goes without saying that I think charities should spend only what they need on delivery systems, not more. I am not suggesting they ignore opportunities for improvement. Instead, I am suggesting that we, as donors, stop ignoring the fact that delivering services costs money. We should recognize that delivery systems are not free, and we should be willing to pay for them.

-Selfish Blogger

Tuesday, December 18, 2012

Why you should talk about giving

I just listened to a BBC radio interview with Toby Ord, philosopher and founder of Giving What We Can - a charity that encourages people to give away 10% of their income or more. Toby has pledged to give away a little over 50% of his.

Toby, and others from Giving What We Can, talked about the moral argument for donating much of their income. He earns close to £40,000 per annum but lives on only £18,000, including saving for retirement and his mortgage.

Most of those who called in to BBC radio during the interview were quite hostile. Callers said Giving What We Can does nothing but make people feel guilty, and that giving should only be done privately. Some accused Toby and his colleagues of coming on the radio to brag, and insisted they were lying about what they give or how much money they actually have. No one can live on £18,000 a year, one caller insisted.

I'd like to reframe this conversation.

First, the issue of guilt. Your money belongs to you. You can choose to spend your money in whatever way you see fit. Everyday, you are influenced about how to spend your money: from advertisers (buy this new flavor of coffee), from associating with peers (ooo, I like Carrie's new sweater...), and from cultural expectations (it's important to own a three bedroom house in a safe neighborhood). You can spend money according to those influences. You can also spend your money to improve the lives of others. Giving What We Can, like this blog, is hoping to influence you to do just that. Giving What We Can is just one more suggestion in a sea of suggestions about what to do with your money.

So why the hostility? Toby isn't just suggesting a way for you to spend your money. He's asking you to help solve a problem. He is asking you to save lives. If you ignore a commercial advertiser's spending suggestions, you forgo a new item. If you ignore Toby's, someone dies. Someone your money could have saved.

If that makes you feel guilty, congratulations! You have a conscience. You are not a sociopath. And if you want that guilty feeling to go away: donate a little bit of money to a highly effective charity. You'll even feel good about yourself. But don't shoot the messenger. Extreme poverty exists, whether you choose to admit it or not, and you can alleviate suffering by giving to charity, whether you choose to admit it or not.

Next, the issue of bragging. Why go on the radio to publicly state you are giving money away, if not to impress others and toot your own horn? Why, to influence peers and change cultural expectations around giving, of course! Most people do what their friends and family do, and they adopt the traditions of their community. It's why most of us wear clothes similar to our friends. It's why most engagement rings are (still) diamond. It's why most Americans (still) delight over the corpse of a bird on Thanksgiving. We are a social species. We follow the rules of our tribe. And if everyone in your peer group was talking about extreme poverty and giving money to Deworm the World, wouldn't you look into doing the same? If every leader in your community was publicly supporting Mama Hope, do you think others would follow?

There is a growing movement of compassionate people who believe giving money is only the first step to a solution: we have to encourage others to give too. And the best way to do that is to engage in conversation. Simply share information about your own giving, and how you came to the decision to support the charities you support.

I hope to join Giving What We Can by pledging 10% of my income to highly effective charities. Until then, I'm happy to be part of The Life You Can Save where I have publicly pledged 1% of my income. Take a look at all the others who have pledged. I'm in good company.

-Selfish Blogger

Tuesday, December 11, 2012

The Christmas wish list

When I was a kid, I loved putting together a Christmas wish list. My parents were pretty good about getting me what I asked for, and they made certain I'd get one big ticket item along with some toys, clothes, and sweets.

By the time I was out of college, the Christmas wish list had lost its fun. It has become an exercise in finding items with a range of prices suitable to the varying income levels of my friends and family that I wouldn't hate having around if someone actually ended up buying them for me. I enjoy living a simple lifestyle, and I really don't want more stuff. Some of my friends feel the same way, and we have enjoyed a pleasant I-won't-get-you-anything-if-you-won't-get-me-anything holiday truce for years. Some economists agree that skipping gift-giving all together is a much more efficient allocation of resources.

For friends and family who insist on keeping the obligatory tradition to spend money on loved ones I've found an alternative to the wish list: the fundraising page.

Set a goal to raise money for they worthy cause of your choice, and direct your friends and relatives to spend their money on something useful - like moving a family in Kenya into the middle class - instead of on another ill-fitting sweater. Shift your gifts to someone who could really use a little something extra, and enjoy the warm feeling of making someone else's life better.

Your loved-ones may be more receptive to learning about the struggles of others around the holidays - it's a great time for outreach. Set-up your fundraising page and spread the word about what you want for Christmas. This year, I've set up a page with The Adventure Project. In addition to doing great work, their message is upbeat and presented in digestible graphics with short, punchy descriptions. Perfect for enticing giving from those who may not be familiar with the struggles of families in extreme poverty.

If the fundraising page may not go over well in your family, think of other approaches to moving money spent on gifts to money spent on charity. My best friend and I created our own tradition for birthdays and holidays after reading The Life You Can Save. We donate to a charity in the other's name and also give each other an affordable item under $10.

-Selfish Blogger

Saturday, December 8, 2012

Some thoughts on baby-making

I've been wanting to post about something for a long time: children. Or rather, making new children. I haven't posted until now because my thoughts on the matter are unconventional, and I didn't want to hurt the feelings of my close (usually pregnant) friends. I had to wait until all the babies were born. I think I've found a special moment in my life (20 months later) where my facebook page is sans pregnant bellies. So this might be my only shot to say something that others may find horribly offensive (I'm sorry!) without insulting my loved ones too (I hope!).

Ok, here goes... I think making babies is selfish.


I'm sorry!!!

I know. You're thinking "Selfish!? That's the complete opposite of what it means to be a parent. Being a parent is the most self-less thing you could possibly do. It means always putting yourself last. It means making huge, painful, personal sacrifices for another person. It means loving someone else so completely, that your own needs don't matter. How on earth can you think parenthood is selfish?!"

Well, I don't. I don't think parenthood is selfish. I think making babies is selfish. And these are two very different things.

Before I continue, let me just say I love my friends' children. Turns out, awesome people raise awesome kids. I'm glad I will get to know these kids over time and watch them grow and be present in their lives. I'm happy they exist! Nothing I'm going to say is meant to be retroactive. I'm talking all about future choices, not past choice. I love the kids I've met: I love you Emily and Roy and Elenore and Maya and Dade and Jacob! I love the kids I haven't met yet. That's right, I'm facebook stalking you with love Dex and Katie Sue. If you are reading this, and you have children, I want the absolute best for them and for you. I mean it.

So let's continue.

There is a lot of need in the world. A lot. Every existing person has needs that must be met if they are to enjoy a happy life: food and water, education, healthcare, basic shelter, access to culture and community, meaningful work. Every time a new person is created, a little more need is added to our world of finite resources. With so many people already in need - little boys and girls without anyone to care for them - why do we feel entitled to create more need?

In the face of 13,000,000 children who have lost both their parents, and countless more who have been abandoned or sold, is it fair that our basic instinct to reproduce goes unquestioned and unchallenged?

I haven't come across a compelling moral argument for creating a new child instead of adopting an existing child.* The reasons I hear for creating a bio-baby (that's what I call a child who inherited 50% of your genes/your partner's genes through traditional methods, in-vitro, surrogacy, or another method) fall into two categories:

(1) Genes are important
(2) Adoption is hard

In category (1), I hear things like "I want my child to look like me", "My family will die out if I don't reproduce", and "I don't want to risk getting a child with physical or behavioral problems." On the surface, these sound sort of reasonable. Then I picture sitting down with a 4 year old girl who has no family, who desperately hopes to come home with me, and saying "I'm sorry sweetie, but you don't look like me so you have to stay here" or "you might be a real problem in school some day, and I just can't take that chance." I don't even know how you'd explain the importance of keeping your specific genetic line alive, but these are really selfish reasons to leave that little girl behind.

Category (2) I know very little about, but I know there are real, systemic problems that make adoption an emotional and financial burden, and sometimes impossible. I'm grateful that some college friends started a blog called Orphans and Widows to share their journey into the system. And I am so humbled by their compassionate, self-less reasons for working to adopt. Hopefully I'll know a lot more about adoption-process-problems, real or perceived, by following their progress.

But even if adoption is impossible, it comes back to the same thing: creating a new child creates new needs. Those needs take resources. Those resources could have been used to meet existing needs. If you can't adopt, then use the money you would have spent on a child to support organizations helping orphans or organizations working to prevent unwanted pregnancies.

I'm not suggesting the desire to have a child and build a biological family is bad or wrong. Rather, this desire should be considered and evaluated against the needs of the wider world. All our decisions should be made this way. What type of home you will have,  the cost of living in the places you want to settle, the career path you choose all determine how much help you are able to offer to others, and what resources you will have to offer that help.

I've made the incredibly selfish choice to live in Los Angeles - a city with a terribly high cost of living that practically requires I drive a car daily. That choice means I have fewer resources to give to those in need, and my carbon footprint is higher than it need be.

We all make selfish choices, and even if we ultimately continue to make them, I think it is only fair we recognize them for what they are.

-Selfish Blogger

*That doesn't mean they don't exist - please share.

Extra money

I've yet to come across a person, no matter how wealthy, who thinks "I have so much extra money sitting around, I just don't know what to do with it all." We live a lifestyle according to our means (and sometimes beyond our means). An increase in income means an increase in spending - more dinners out, nicer clothes, a more expensive car, a larger living space in a wealthier part of town. We have wish lists of the luxuries we'll buy, the vacations we'll take, once we get more money. We always want more, so we spend what we make. While our wish list things are nice to have, they are far from necessities. And more to the point: you could spend that money to save lives instead of marginally improving yours.

June Walbert over at USAA has some simple ways to save $1,000 a month (and it doesn't mean moving to a small apartment or getting rid of your car). Her article is written in the context of saving money for an emergency fund, but the concepts apply to saving money to reach your philanthropic goals. What will you do with the money you save?

-Selfish Blogger

Friday, December 7, 2012

One of my heros

If you saw the PBS special Half the Sky then you already know about Edna Adan. She is one of my heros. And I hope in my life I can do somewhere near as much good as she is doing.

She's given up on a quiet retirement to build and run a hospital in Somaliland after years of civil war. How truly self-less!

You can support her work through The Fistula Foundation.

-Selfish Blogger

Tuesday, December 4, 2012

SNAP Challenge

Cory Booker, the mayor of Newark, N.J., has taken on the SNAP ChallengeSNAP (Supplemental Nutrition Assistance Program), commonly known as food stamps, now reaches over 40 million Americans - about 15% of the country.

Dan Goldberg of the Star-Ledger reportsThe average monthly food stamp benefit was $133.26 per person in New Jersey in fiscal year 2011, according to the U.S. Department of Agriculture. That's a little over $33 per week, or $4 per day.

Mayor Booker will be feeding himself for the next week on only $4 per day, and he'll be tweeting about his experience the whole time. Follow his story at #SNAPChallenge or #CoryBooker

I believe these types of headline-grabbing-challenges are hugely important. Not only do they raise awareness around issues of hunger and poverty, but for the individuals participating, they instill a deep sense of compassion and empathy.

We are fortunate to live in a country with a safety-net that, at the very least, prevents starvation. Thanks to programs like SNAP, poor Americans deal with a very different kind of hunger than the poor in the developing world, where death from starvation or malnutrition are very real threats.

Mayor Booker will be living below a comparatively comfortable poverty line. Even more difficult is to live below the global poverty line of $1.25 per day (and yes, that $1.25 per day = the purchasing power of $1.25 in the US). 

If you'd like to take on the SNAP Challenge yourself, there's a handy-dandy toolkit to get you up and running. You can also find a  lengthy history of food stamps in the USA here.

If you'd like to take on a tougher challenge - 5 days on $1.25 per day - head over to Live Below the Line to pre-register for the 2013 challenge.

-Selfish Blogger