Opinion: Donors Should Help Best Charities Do Better

Donors should support the best charities, enabling nonprofit organizations to hire top employees, take risks, and innovate, according to an opinion piece in the Financial Times by Sean Stannard-Stockton, director of tactical philanthropy at Ensemble Capital Management.

“The gift of money is only the first step in a chain of events that might achieve the elusive goal of creating social impact,” writes Mr. Stannard-Stockton.

In drawing contrasts between how investors approach investing in for-profit groups versus nonprofit organizations, he criticizes donors’ reluctance to finance overhead costs or to support groups that pay competitive salaries to charity employees. Citing public outcry when nonprofit employees receive high salaries, as well as Congressional investigations and criticism in the news media, Mr. Stannard-Stockton says this attitude hinders the nonprofit world’s ability to be successful.

“We need to believe that nonprofit leaders know best how to achieve their mission, and just as investors do not tell companies how to spend their investment dollars, make the majority of our donations for general operating support,” Mr. Stannard-Stockton advocates.