The Next Five
On Charity Navigator's fifth birthday, Trent Stamp takes the opportunity not to look back at those years, but at the five ahead
Trent Stamp, President of Charity Navigator
April 2, 2007
On this fifth anniversary of Charity Navigator, it seems obvious that the non-profit world has changed dramatically in those five years since we launched our service and our website. On-line giving has exploded. Accountability and transparency movements have progressed. Strategic philanthropy, whatever that means, and CSR, in theory at least, have become mainstays in the business magazines. Cause-related marketing is omnipresent. None of these were more than mere afterthoughts in our industry just five short years ago.
As we celebrate our fifth birthday, I'd prefer not to look back, or to try and assess our impact and role in these new developments, but rather to focus on the years in front of us as a non-profit sector. Any idiot can look back and see where we've been (as I've done on each of our previous birthdays). This year, I want to tell you where we should be headed instead. The following is my admittedly delusional, glass-half-full exposition of what the next five years could hold for the non-profit sector. While most, if not all, of these ten predictions will never see fruition, they could, and that in itself is enough to keep me around to see what happens.
- We Will Recruit More Leaders from Outside Our Sector: I regularly read about the looming leadership crisis facing the non-profit sector, due to the impending retirement of the Baby Boomers who run most charities today. If charities aren't finding enough qualified candidates to fill their executive jobs, I believe however that it's not because there aren't enough talented people in our workforce, it's because we're not looking in the right places. A quick review of the org charts at the leading international relief charities is illustrative of where we can find great leaders, if we're creative: Thomas Tighe, a tremendous leader of a tremendous organization, Direct Relief International, had never worked for a non-profit before he took over that group, but he had been COO of the Peace Corps. John Pingree of Globus Relief came from the world of public finance. George Rupp was the President of Columbia University before joining International Rescue Committee. John Howe at Project HOPE is a medical doctor who used to run a hospital. Scott Harrison at charity: (yes, that's its name) was an event planner of all things. All are exceptional leaders, not just non-profit leaders.
- Stay-at-Home Galas Will Become the Norm: No one likes charity special events. They're a headache for charities that suddenly have to be experts in party-planning. Most high-end donors, swamped with requests for yet another silent auction and overcooked chicken dinner, say they'd prefer to stay home. Charity watchdogs hate these functions because they're inefficient. Thankfully, "non-attend events" are growing in popularity. Charities are setting a date for people to stay home and enjoy some overdue family time, instead of attending the over-priced gala. Invitations are printed and mailed, donors RSVP as if there was going to be an actual event, they send a check, and everyone wins. In 2012, let's hope most events happen only in our minds, and all proceeds go to the charity's coffers, and not the caterer's.
- We Will Stop the Charity Explosion: In the last 10 years, the number of charities in this country has increased by nearly 50%. This is an astounding and unprecedented growth never seen before in any major industry at any time in the last 100 years in America. The dirty little secret of the non-profit world is that most of the new groups are redundant and unnecessary and perpetuated by ego-driven founders. In the next five years, I hope we stem the tide, through not only educated donors refusing to support those that exist merely to support themselves, but a newfound regulatory commitment to revoke the non-profit status of those that have not served the public trust in a way deserving of the privilege.
- We Will Eliminate Politician-Laden Boards: Supreme Court Chief Justice John Roberts supposedly chairs the board of the Smithsonian. Secretary of State Condoleeza Rice is nominally on the board of the Red Cross. Zero chance exists that they are involved in overseeing these particular groups, which not coincidentally, have had oversight problems. Who is served by pretending that these officials have the time or inclination to sit in on quarterly budget meetings at the non-profits they "lead"? It's insulting to the board members who toil for no pay for other groups to send the signal that our nation's largest non-profits can be managed by names only. In five years, I know we won't rid ourselves of all celebrity-driven boards, but maybe we can remove the pretense of naming our elected leaders to boards for no other reason than to create awe by outsiders.
- Funding is Created for Charity Evaluation: This is obviously self-serving, but Charity Navigator doesn't exist without the support of our founders, John and Marion Dugan. Who are they? In all honesty, they're just a couple of regular people who had some money and believed passionately in this idea. We've received zero major foundation support and little from mainstream corporations. Charity transparency and accountability are just not priority areas for most funders, despite the fact that we will have over four million individuals visit our site this year, and most of them will be looking for unbiased and analytical information they can use to make an educated giving decision. And we're not alone. I know that others in this field struggle to find support also. It is my hope that over the next five years, foundations and corporations will recognize that non-profit ratings services are a key component of a vibrant non-profit community, and that unlike our for-profit peers (Consumer Reports, U.S. News and World Report, Morningstar, etc.) a market doesn't exist (at this time) for charging for our service. We, or others like us, need to be subsidized for providing a public service.
- The Media Will Learn to Celebrate Good Charities: I would hazard that 75% of the stories that cite Charity Navigator as a source are negative exposes of particular charities. And yet, over 60% of the charities we evaluate receive ratings of three or four stars. If you read only our media coverage, you'd think we were hopeless pessimists. But it's not true. We want to celebrate good charities, but newspapers couldn't care less. Sure, we publish lists like " 10 Charities That Are Hoarding Your Money" but we also list ones such as " 10 Charities Worth Watching" or " 10 Slam-Dunk Charities." No media outlets care about the latter. It is my hope that in the next five years, we start receiving as many media inquiries about charities that honor their mission and the people they serve as we do about accountants who steal from the petty cash drawer.
- List-Selling Organizations Will Become the Exception, Not the Norm: In the non-profit world, charities now consider the selling and trading of donor names and addresses to be a standard operating practice. And the #1 complaint we hear from donors, especially the elderly, is that they make a small gift to a charity and never hear from that particular group again, but subsequently spend the rest of their natural lives trying to dig out from the endless mail solicitations in their box each day. These frustrated donors try to find a way to stop the appeals and are shocked to learn that a charity they contributed to sold or traded their name to countless others and that stopping the appeals now is virtually impossible. If, as many charities would have us believe, donors really don't mind this practice and actually enjoy being exposed to new groups, why not require donors to check a box stating that they would indeed like for you to sell or trade their name to others? In the next five years, charities that respect their donors and demonstrate that respect by protecting their identities will see it pay off in increased donations.
- Transparency in Cause-Related Marketing Takes Off: From the "Pinking of America" during Breast Cancer Awareness Month to the ubiquitous Project RED, it's clear that cause-related marketing will not wane anytime soon. Corporations use it as a product differentiator, charities like it because they can raise awareness of their cause, if not a ton of money, and consumers enjoy it, because everyone likes to shop and then feel like they're making a difference through their purchases. We cannot stop this movement, nor do I think we should. But I hope that charities and corporations alike can do a better job of being more transparent and accountable in their cause-related marketing campaigns. "A portion of the proceeds from this purchase goes to charity" won't be sufficient. Consumers will ask how much goes to which particular charity, and what they specifically plan on doing with it. If this happens, good corporations will partner with reputable charities and consumers, while never reaching the point where they can truly shop their way to responsible philanthropy, will know that their purchase is actually leading to a realized social benefit.
- Anonymous Donors Stop Because They're Satisfied: The online portal (and Charity Navigator partner) Network For Good states that 20% of the people who use their service do it anonymously. While this is convenient for donors, I think this should scare the hell out of those non-profits that do it the right way, and have respect for the people who make their work possible. The rise of anonymous online giving keeps reputable charities from ever having the opportunity to cultivate donors as the donors age and get wealthier. Deciding to give anonymously is a warning. Donors are revoking the right of the charities to know who they, the donors, are. Don't kid yourself into believing that most donors are choosing this route as a result of some sort of higher calling; they're doing it because they're sick of being treated like pieces of meat by the charities. Five years from now, we'll know if charities have done a better job of protecting and honoring their donors if the anonymous giving movement has slowed. But if charities continue to sell donor names, solicit them constantly, and remain elusive on the details of how they spent the donor money, anonymous giving will become the norm, not the exception.
- Do-Not-Call Legislation Is Extended to Non-Profits: People hate the intrusiveness of being interrupted at home. The nearly 65 million Americans who have signed up for the federal do-not-call list stand as a testament to this fact. Unfortunately for those who value their peace and privacy, nonprofit organizations (like the politicians who passed the law) have been exempt from the do-not-call legislation. Even worse than the invasion of privacy is the fact that most of these calls are being made by professional fundraisers who pocket anywhere from 65 to 95 cents on the dollar of every contribution they raise. Donors are misled into believing that they are giving to a worthy cause when, in reality, most of their contribution is ending up in the pocket of a telemarketer. Hopefully, five years from now, our legislators will take the necessary steps to make donors as safe from these calls as they currently are from the vendors who once tried to sell them chimney sweeping services.
I spend a lot of my time identifying what is wrong with the non-profit world. Most people identify me as a critic. But that's not accurate either. Like many in the non-profit world, I am an advocate. And I advocate on behalf of America's donors and the people that our nation's charities serve. The stakes are too high, for both of these groups, for our charities to fail them. And today, after five years of having the privilege of leading Charity Navigator, I remain hopeful that our charities will not fail. They have work to do, but so do we all. I pledge to stay in the fight, to do all within my power and position, to hold our charities accountable and demand that they honor the people they solicit and serve. And I ask you to join me. We're in this together, and we have the power of hope to carry us forward.