Seeing is believing Philanthropy and Evidence Caroline Greenhalgh To give away money is an easy matter and in any man's power. But to decide to whom to give it and how large and when, and for what purpose and how, is neither in every man's power nor an easy matter. Aristotle WHY THE FOCUS ON HIGH NET WORTH DONORS & EVIDENCE?
Since the banking crisis of 2007/2008 and the subsequent onset of austerity manifested by public funding cuts, charities have been faced with the dual challenge of reduced funding and expanding need.
Consequently, many charities find themselves relying on philanthropists to make significant gifts to plug the funding gap. Indeed, major philanthropy has been on the rise since the financial crisis, with 2016 seeing the highest amount given since 2005. In 2016, 139 UK donors made 310 charitable donations worth one million pounds or more, with a total value of 1.56 billion (Coutts Million Pound Donor Report 2017) Over the same period, donations from the middle and lower income brackets have been declining. (Collins et al 2016) However, as the ability to make substantial donations is confined to a small number of individuals and foundations, only a very narrow segment of society will determine which charities and interventions are worth funding. Charities are increasingly relying on larger and larger donations from smaller numbers of
high-income, high-wealth donors. This is sometimes referred to as TOP HEAVY PHILANTHROPY (Collins et al 2016) WHY THE FOCUS ON HIGH NET WORTH DONORS & EVIDENCE? (2) Consequently: The way in which the wealthy practice philanthropy and If and how they utilize evidence in their decision making is a key question which needs to be explored. The findings of such research can be disseminated to charities to better enable them to develop and manage their relationships with such donors in order to access their financial support.
Why does evidence matter? Evidence matters because good intentions are not enough. The best charities are considerably more effective than just good charities when resources are limited, the way in which those resources are directed is hugely significant. Lets work through an example: The problem that needs to be addressed in this instance: Diarrhoea in Kenya Over 7 million children under-5 years of age in Kenya, die each year mainly from preventable and treatable conditions. Diarrhoea together with pneumonia and malaria remains one of the leading cause of child mortality. Millions of children could be saved each year if proven interventions were rolled out (WHO 2018). Our goal is prevention of diarrhoea.
One solution is to provide chlorine at the water pump for people to add to their water when they collect it. Another solutions is to deliver chlorine to households so people can add it there. Both of these sound pretty sensible, but: Researchers at the Massachusetts Institute of Technology have found that providing chlorine at the water source prevents more than twice as many cases of diarrhoea for a given sum of money. Put another way, a lot of children will get a potentially fatal disease if donors make the wrong call about which programme to fund. (Fiennes 2018) A Quick Note about Evidence When we talk about evidence based decisions, it is commonly taken to mean putting the best available evidence from research at the heart of policy development and implementation (Davies 2000: 366, cited in Wells 2007: 24).
However, we need to ask what we mean by the best available evidence? There are many different types of evidence and the quality of evidence varies significantly too. The type of evidence that will prove the most useful in determining the best policy to address a particular social problem, will to an extent, be determined by the nature of the question being asked (2016). For example, quantitative research may be best placed to answer questions relating to the extent to which something works (such as how many? or how much?). Qualitative research on the other hand may be better placed to answer what and why something works. https://www.insidephilanthropy.com/home/2014/12/22/evidence-based-philanthropy-gone-wrong-themyth-of-how-small.html In order to be effective, donors and non-profits need to use evidence. Evidence about:
(i) The nature of the problem. (ii) What is needed? (iii)What works? (iv)What the intended beneficiaries think of it? (v) What other organisations are already doing to tackle the problem? How do most people choose which charities to support? (1)
167,935 charities in England and Wales 16,024 linked charities Combined income of 75.51 billion Expenditure of 72.77 billion Over 80% (134,473 charities) had an annual income of less than 100,000.00 per annum More than 50% of those charities (53%) had an annual income below 10,000.00 A further 24,358 charities are registered in Scotland. (Charity Commission, 2018)
How do most people choose which charities to support? (2) Research by Breeze and Lloyd in the UK has found that social networks and social norms are key factors influencing which charities donors choose to support. This in turn means that funding may end up concentrated upon particular causes and issues whilst others are left in the shadows struggling to compete for a share of any residual funding. This is particularly the case for the 80%+ small to mid-size charities in the UK that have an income of less than 100,000 per annum and the even more so for the 71,000 charities with an annual income of less than 10,000 per annum
Barriers to Giving The Sunday Times Giving List 2017 disclosed that many of the wealthiest people in Britain are failing to give either at or close to their capacity. Many such people do want to give more but barriers to their doing so include: Insufficient time to consider the evidence; Reputational concerns - exacerbated recently by the failure of Kids Co in the UK and the Oxfam scandal and Too much choice. Facilitators to Giving
Community Foundations have an extremely valuable role to play in addressing some of the barriers to giving outlined above. Community Foundations can also ensure that funding from high net worth donors does not get polarized but instead is able to reach a diverse range of effective charities without compromising on the need for evidence or evaluation of outcomes. Community Foundations can advise donors on how their donation can have the most local impact and in so doing help them to direct their funding charities which are working effectively to address causes that they are passionate about. Community Foundations address a wide range issues and are able to target funding to hard to reach communities . The Sussex Community Foundation identifies smaller charities and community groups which often fall under the radar of philanthropists who are more likely to focus on large
scale national charities. One Final Thought Dont judge a charity by its admin costs Many people believe that charities waste money on administration, and hence that the best charities have low administration spend. This leads some charities who should know better to publicise their low admin costs, and to talk about the amount of their money which goes straight to the cause. The popular idea that money spent by charities on administration is wasted is wrong. Kids Co is an example of a charity that had very low overhead costs! Analysis by Giving Evidence has revealed that high-performing charities spend more on administration costs than weaker ones do. This analysis by Giving Evidence is the first empirical data to be published about what administration costs
indicate about charities performance. Thoughtful Philanthropy 1. Does the charity make a difference to causes you care about? a.What is their impact can they demonstrate their effectiveness and outcomes? 2. Do you share their values and vision? 3. Can they articulate their mission clearly? 4. Do they need more funding? 5. Are they better than their competitors? 6. Does the charity have good governance 7. Does the charity have strong executive leadership?
8. What is their strategy for the future? Thank You If any of you would be happy to chat to me about your philanthropy and in particular how you think about and use evidence please do come and say hello after the seminar. My contact details: Caroline Greenhalgh [email protected] carogreenhalgh[email protected] Linked In: https://www.linkedin.com/in/caroline-greenhalgh-03b57016/
Mobile: +44 (0)7717 822550 School of Social Policy University of Birmingham
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