October 7, 2008 | Read Time: 1 minute
Holden Karnofsky, founder of GiveWell, a grant maker that offers advice to other donors, questions a popular way that many nonprofit groups raise money by telling potential contributors exactly what their donation would pay for.
For example, Mr. Karnofsky points to a women’s group that promises that for every $45 gift it receives, it will teach an African woman basic reading skills and how to write her name.
Mr. Karnofsky writes on GiveWell’s blog that if this is literally true — that a donation directly benefits one aid recipient — “this would seem a horribly inefficient way to run projects — spending all the overhead to pay staff, set up the class, etc., and leaving one woman out because of a $45 shortfall.”
Yet if the pitch is simply a way to appeal to donors and the money actually flows instead into the charity’s general coffers, “your donation is really an unrestricted donation to a large organization; to understand your impact, you need to understand the entire organization.”
“All in all, I’m skeptical of any claim that says ‘your $1000 buys X.’ It’s a good way to make things feel tangible, but a donor truly trying to understand his or her impact should take a different approach,” he writes.
In a separate post, Mr. Karnofsky suggests that donors conduct research on a charity’s “strategy, priorities, and activities” and give unrestricted gifts, instead of ones for specific efforts.
What do you think of Mr. Karnofsky’s argument against the fund-raising pitch?
