Now more than ever, focus on impact: Expert advice to guide your end of year giving.
By: Michael Thatcher
Tags: Impact, Charity Navigator, Charity, Nonprofit, Philanthropy

In 2015, I surprised many by leaving a flourishing career in the tech sector to lead a nonprofit organization dedicated to facilitating impactful philanthropy. My experience in tech and a lifelong involvement with charitable causes had convinced me that data held the key to smarter, more impactful giving. I still believe this to be true.

My mission, both professional and personal, is to encourage donors to harness the power of data to make the best investments possible in the causes their hearts are called to support. In this era of extreme need and economic disarray, giving with impact has never been more important.

Combining heart and science, here are my top three pieces of advice to guide your charitable decision-making during this most unusual of giving seasons:

1. Give with passion

The coronavirus pandemic has had an uneven effect on the nonprofit sector and the causes and constituencies it serves. Organizations responding directly to the pandemic, including food banks and homeless shelters, have reported record levels of funding as Americans step up to support those hit hardest by the pandemic–but that’s not the whole story. Overall, the philanthropic sector is experiencing a painful contraction as organizations whose missions are less central to the current climate suffer from severe losses in revenue.

My advice to donors conflicted about where to channel their funds this giving season is this: Follow your passion. If the plight of those impacted most severely by the COVID-19 pandemic is your most pressing concern, donate to groups that are working to alleviate the pain. If the racial justice movement that coalesced this summer has inspired you, that’s where your funds should go. As for the causes that have long been close to your heart–the environment, the performing arts, education–they need your funds, too–desperately. In a time when you may have less to give to the causes that are meaningful to you, stay true to the ones you love.

2. Follow the data

Following your passion doesn’t mean giving indiscriminately to organizations whose missions align with your values. Not all nonprofits are equally effective–and with studies showing that only a third of donors research an organization before making a donation, you could well be throwing away your hard-earned money with nothing much to show for it in the way of real impact.

Thanks to our increased ability to access digital nonprofit data at scale, we now have more information than ever with which to evaluate a nonprofit’s effectiveness. And the tools that aggregate and distill this data for donors are increasingly sophisticated.

Earlier this summer, Charity Navigator (the organization I currently lead) added 150,000 new nonprofits–many of them smaller and more recently established than those we have traditionally rated–to our nonprofit assessment platform. We also acquired the ratings startup ImpactMatters, which developed a straightforward methodology that allows an apples to apples comparison of nonprofit impact–that is, the amount of good achieved per dollar spent. For example, want to know which food bank in your city is most cost effective at distributing meals to those facing food insecurity? This methodology will tell you.

A group photo of the Charity Navigator team in 2019.

Charity Navigator is not the only organization working to promote intelligent giving: Givewell, Candid, and BBB Wise Giving Alliance all provide useful information to prospective donors.

3. Ask the right questions

Related to the point above, I encourage all donors to ask the right questions when considering a contribution. Rather than asking “where is my money being spent?” try asking, “what has my money accomplished?” Think of your gift as an investment, which you track over time.

To determine whether a particular organization is a sound investment, look for how it articulates its impact–quantifying outcomes and sharing stories from beneficiaries, for example. If the difference the organization is making isn’t readily available or easily understood, you may want to consider supporting a different organization in the same cause area.

I hope that these steps will help you feel confident in your giving decisions in this challenging time, and when many have less money to give to the issues they care about. Remember, charitable giving is an investment one makes in an organization and a cause. It’s easier than ever to ensure that the return on one’s investment is high. So, this giving season: follow your heart, use your head, and make a difference.

Michael Thatcher is the President & CEO of Charity Navigator, the world’s largest nonprofit assessment platform. He was previously Microsoft’s Public Sector Chief Technology Officer (CTO) responsible for technology policy initiatives and engagements with government and academic leaders in the Middle-East, Africa, and Asia.