Every holiday season — from Thanksgiving Day to the New Year’s Day — Americans are at their philanthropic best: Charitable giving peaks, driven by altruism and a last chance to corral a tax exemption as the year draws to a close.
One question that might interest donors is this: Are there strategies for giving that can make the most of the effort? The answer, along with other useful advice, comes from Katherina Rosqueta, founding executive director of The Center for High Impact Philanthropy at the University of Pennsylvania. She offered her views on the Knowledge at Wharton show, which airs on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.) She discussed the key takeaways in this year’s edition of a free guide to “High Impact Year-end Giving.”
“If you want your money to go the farthest – do the most good in the world – start with what is the good you want to see happen,” said Rosqueta, who is also adjunct faculty at Penn’s School of Social Policy & Practice. “Once you have clarity there, you could take a few steps to ensure that whatever amount you want to give can go as far as it can to create that social impact.”
According to Rosqueta, this time of year sees a “disproportionate” amount of charitable gift giving by U.S. residents. She noted that a conservative estimate suggests about 25% of philanthropy in the U.S., or about $75 billion, occurs in this “season of giving.”
Rosqueta, a former consultant with McKinsey & Co., advised donors to first determine if the organization they intend to give to is legitimate. “If a nonprofit comes up under investigation or with any stories that suggest that it is not doing what it ought to, it is an immediate red flag for somebody to slow down before committing funds,” she said. Indeed, a $187-million charity fraud scandal involving four cancer charities recently reported in The Wall Street Journal would be “plenty to give donors pause,” Rosqueta said. Today, information on charitable organizations is more freely available than before, but many donors don’t even do a quick Google search.
“If you want your money to go the farthest – do the most good in the world – start with what is the good you want to see happen.”
While one concern donors may have is how much of their money reaches end-beneficiaries, the goal of some philanthropy campaigns with corporate sponsors is to raise awareness among donors, Rosqueta said. “You are looking to have that awareness translate into more funds, translating into a difference in the lives of the people you hope to help. That is the chain of logic that you are hoping for.”
Rosqueta said her center’s guide on charitable donations is only “the tip of the iceberg” of the collective knowledge on philanthropic giving. The guide offers specific recommendations for donors, but also has links to other organizations and resources.
In putting together the guide, Rosqueta’s center studies academic research, conducts site visits to nonprofits, directly contacts charitable organizations and scrutinizes their economics, among other background checks. “We do that kind of due diligence, just like a venture capitalist or an investor. We’re doing the leg work for donors so they can get to impact faster.”
The center offers donors several routes their philanthropy could take. Urban or inner-city blight is one such destination for donor monies. The refugee crisis and the influx of migrants Europe faces now are high on the list of donors this year, said Rosqueta.
The center’s guide also includes a regular section on “effective disaster response,” covering both manmade and natural disasters. It provides information about organizations that have experience in dealing with displaced people. Two such organizations the guide specifically mentions are Switzerland-based Médecins Sans Frontières, also known as Doctors Without Borders, which delivers medical care in some of the hardest-to-serve places; and Fairfield, Conn.-based Save the Children, which has a track record of helping children, particularly those traumatized by displacement.
Elsewhere, the guide notes how donations to “green and clean” vacant lots in post-industrial cities could help lower crime rates, increase property values and bring measurable gains in mental health by decreasing stress. “Simply walking by a green place could make a tremendous difference as opposed to walking by the blight and the criminal activity that was there before,” Rosqueta said. “People don’t realize that vacant lots currently comprise one-fifth of the land area in post-industrial U.S. cities. This is an opportunity to take what is a drag on so many cities and turn it into an asset.”
“We do that kind of due diligence, just like a venture capitalist or an investor. We’re doing the leg work for donors so they can get to impact faster.”
Arresting the “Summer Slide”
Providing learning opportunities for children in low-income areas is another cause Rosqueta highlighted. The so-called “achievement gap” between low-income students and their wealthier peers occurs during the summer, she noted. Low-income and vulnerable children do not have access to a lot of what their wealthier counterparts have, such as books, an available and supportive caregiver, and “the enriching opportunities that come when you go to a high quality summer camp,” she said. “So they end the school year at a certain learning level and then they lose it during the summer – that is the slide.”
With each passing year, that slide results in ever bigger gaps between low-income children and those that are better off, Rosqueta noted. Here, she singled out as an example the work being done by an organization called the Philadelphia, Pa.-based Springboard Collaborative, which works with both the children and their parents “to prevent the slide.”
Another cause Rosqueta highlighted is the prevention of neonatal mortalities in the developing world. “What is tragic is these are known, treatable and preventable conditions. We’ve long known how to increase child survival rates. The trick has been in making sure that what we know gets to the communities — children are still dying as newborns, and dying under age five.”
One solution her center points to is a home-based newborn child package, which costs $7 for each at-risk family. The package has tools including sterile blades to cut umbilical cords, and educational aids for mothers to stress the importance of immediate breastfeeding to boost immunity and strengthen the child, treating common infections and keeping newborn babies warm, among others.
“Many of us who live in the U.S. and are middle-income, assume that [all appropriate medical care] is going to happen, but for some of these communities, the lack of [resources] means that too many babies are dying too soon,” said Rosqueta. Her guide profiles an organization in India called Search (Society for Education, Action and Research in Community Health), which makes sure that the package of lifesaving interventions gets delivered, through community health workers, to mothers who cannot easily get to a hospital or a clinic.
“[Millennials] are digital natives and have grown up in a time where they have been able to expect good information and results for every aspect of their lives. They are seeking out [such] information about giving, just like they are seeking out information on a lot of things they are doing.”
Other worthy causes include combating the so-called “quiet epidemic” of drug abuse with interventions like syringe exchange programs. Rosqueta said multiple studies have shown that such programs not only save lives but also reduce rates of HIV infections. “Philanthropy can help make sure more of those programs are reaching the communities who need it,” she said. Her center’s guide has profiled Meta House, a Milwaukee, Wis.-based organization that she said has done pioneering work in helping women recovering from substance abuse and their families.
Changing Donor Attitudes
In recent years, donors have generally become more concerned about how their monies will be used, said Rosqueta. There was marked shift after the 2008 recession in how donors seek to get the most impact for their giving. “It was a shock to a lot of foundations that forced them to think [about providing] more bang for the buck.”
Another shift is evident in a new group of emerging donors — the millennials. “They are digital natives and have grown up in a time where they have been able to expect good information and results for every aspect of their lives,” said Rosqueta. “They are seeking out [such] information about giving, just like they are seeking out information on a lot of things they are doing.”