Charity Navigator Heals the Nation

USA Today runs a regular feature where they bring conservative columnist Cal Thomas and liberal political strategist Bob Beckel together to, well, usually bicker at each other.

This week, their topic is charitable giving, and surprisingly, they find common ground on something.

Says Bob: "And for folks who are wary of charities or don't know where to start, the website Charity Navigator (www.charitynavigator.org) is a smart starting point. You can choose your cause and make sure that your hard-earned cash is being put to good use."

Cal responds: "Excellent idea, Bob."

And just like that, the rift in the nation was healed, the red and the blue became purple.

As one of the spokesmen for this generation once lyrically evoked: "Can't we all just get along?"

Apparently we can.

My Holiday Idea to Save the World

I've been accused, more than once, of being "anti-charity." Nothing could be further from the truth. I love good charities. I think bad charities, however, should be excised from the sector, allowing more money to flow to those that do good work.

To prove how much I love good charities, I have a revolutionary giving idea for this holiday season. I'm going to attempt to start a movement, right here in this blog. Let's see if I have the ability to start what Malcolm Gladwell calls "a word of mouth epidemic." If it takes off, or tips, remember that you read it here first.

So what's my idea? According to the American Pet Products Manufacturers Association (APPMA), Americans will spend $2.6 billion on their pets this holiday season. That's billion with a B, for items ranging from drinking fountains to Nascar dog bowls to advent calendars for cats. Seriously.

Now, I know we love our pets. I am happy to share my house (note the politically-correct avoidance of the concept of "ownership") with Athena, Mia, and Abby--two cranky cats and a silly dog. And I must admit that these animals even have stockings in my home. And they usually get gifts. But, in reality, isn't this a tad silly? The dog would rather have the breakfast left-overs, and the cats always ignore their new catnip toys to play with the ribbons and boxes. I suspect we give not for them, but for ourselves.

So, how about this instead? Why don't all of us pet owners, instead of spending $2.6 billion on toys for our pets, do something worthwhile and donate the intended monies to reputable animal-related charities, so animals can be protected, fed, and sheltered? Doesn't this make a ton more sense? Doesn't this honor the holiday spirit in the way it should be? And do you really think your dog is going to miss the Hedgehog Chubby Buddy you were planning on getting him? Think about it folks. Next year, we can talk about giving to some good kids' charities, and cutting back on the PS3's for our kids. But for this year, we start small.

Click here and find yourself a good animal charity. I'm going to. I promise. Abby the Dog will never miss the Dogmatic SnackShotz Treat Launcher. And that money might actually go to saving another, less-fortunate dog's life.

Uncle Sam's Bogus Charities

If you work for the federal government or run a charity, you know about the Combined Federal Campaign. This is the government-run program where 1.3 million federal employees choose to earmark contributions, deducted from their paychecks, for specific charities. It's basically the government's version of The United Way. Last year, contributions totaled more than $268 million. The U.S. Office of Personnel Management establishes guidelines for eligible charities, publishes a huge guide for givers to choose from, and monitors the program. When I worked for the feds, I participated in CFC. Everyone does.

However, here's an article that reports on a little-noticed GAO report which shows that the United Way would be embarrassed by being compared to CFC. According to the report, done by the government's accountability office (so calm down, those of you who think I'm always picking on the administration), CFC wrote checks last year to more than 1,280 nonprofit organizations that collectively owe $36 million in back taxes. Additionally, other federal agencies gave $1.6 billion in grants to at least 170 of the delinquent charities, which account for nearly 6 percent of the approximately 22,700 charities funded by the CFC. And one of every 15 charities approved by CFC to be on the list was found to be engaged in “abusive and potentially criminal activity,” according to audits done by GAO.

According to the article on MSNBC, "the people responsible for vetting the CFC charities and managing the money that federal employees contribute every year have been scrambling to reform the system since the congressionally ordered investigation uncovered the delinquent tax problems."

Sounds good. They should be scrambling to reform the system. I hope they are. When we contacted them 4 years ago and offered to help, for free, because we knew they weren't carefully vetting their charities, they told us to go away. 3 years ago, same thing. 2 years ago. Last year. And now, this year.

How bad is it? According to the GAO, CFC's minimal screening process opened the door wide enough for a fake charity to con its way on to the authorized list. The GAO actually created a fake charity itself -- and then applied to three local CFC campaigns for money, all of which sent checks.

That's right. There are charities on the list approved by the federal government for government employees that don't even exist. When we offered to help each of the last few years, even we didn't think it was that bad. We just assumed, given that we knew they weren't really screening the groups, that there were lousy groups on the list. But we thought they'd at least be real.

The whole thing is unreal.

Some Tasty Tidbits

Let's get out in front of the traffic today, and offer up a few Thanksgiving leftovers, before Thanksgiving actually happens:

• A new study shows that 1 in 10 thinks charities are "honest and ethical." This is a legitimate shame--I truly believe that the vast majority of charities in this country are doing great work, and deserve our trust. But it's anything but surprising. I've been warning of this for years, and charity leaders have been yelling at me to shut up. We're one Enron-like scandal away from an entire generation of donors taking their money and going home. And as a sector, we can embrace these findings, and push for real reforms in an effort to restore public trust, or we can stick our heads in the sand, and hope it goes away. You know what I think we should do, and what I think we will do.
  
• A charity run by a celebrity was apparently run poorly. Hard to believe. After all, if a famous person vouches for the group, that should be enough for us, right?
  
• Want to impress the in-laws this Christmas by making BusinessWeek's list of the "50 Most Generous Philanthropists?" No problem, if you've given at least $157 million over the last 5 years.
  
• The Washington Post is here to announce that donors are abandoning large charities for small ones in their neighborhoods. The actual data yields that the opposite is true, but that shouldn't get in the way of a good trend story.
  
• Three years ago, the New York Public Library (a non-profit) was struggling. Today, they're swimming in cash. As a result, their CEO received a $221,000 raise. Rather than defend the increase as a worthwhile expense for a CEO worth his pay, the library has, ironically, decided to be quiet on the subject.
  
• A new study reports that New Yorkers are the most philanthropic citizens in the country. This study was commissioned by a group eager to refute another study, which showed that those in the Northeast were the most stingy. Confused? Yeah, me too.
  
• Happy Turkey Day, one and all. I hope you have as much to be thankful for as I do. Not possible, in actuality, but it's a nice thought.
  

Up and Down the Dial

I'll be on the Mike McConnell Show this morning on 700 WLW at 10 AM EST this morning. If you don't live in the Cincinnati area, you can listen online, or on XM on Channel 173.

Then, at noon EST, I'll be back on The Good Life Show with Jesse Dylan. It's available on Sirius, on channel 114.

Tune in. I won't be boring. I can't promise you, however, that it will be as interesting as yesterday's show. I had the opportunity to appear with opera star, Jessye Norman, on WNYC's Soundcheck. We were supposed to talk about charity concerts for 40 minutes. However, 5 minutes in, after I had said some very kind things about celebrity-driven galas and events (which are unfortunately often a waste of time and terribly inefficient, but I was on an NPR station and had no desire to engage in any sort of confrontational talk), Ms. Norman hung up in a huff and refused to appear on the show with me.

Don't believe me? You can find the show here. Make sure you listen for the part where I responded to host John Schaefer's question about the potential for donors to tune out certain ubiquitous celebrities, as in a "Bono Burnout" by saying that was "unlikely in his particular case, since the man is so intelligent, sincere, and well-connected and obviously knows what he's doing." This response was the final straw for Ms. Norman, who accused me of trying to tear down the great man, and disparage his character. It was like she wasn't even listening to me, but knew what I would say. And it was not what I was saying. Strange stuff.

And to think that I told you all yesterday to support the arts. And this is how I get repaid.

Your Artists Are Starving

In our 2006 Holiday Giving Guide, one of our tips for 2006 has been to to "Support Your Arts and Cultural Charities." As we write, "these organizations were the only type of non-profits to experience a substantial decline in giving in 2005. If you are passionate about the arts, consider adding a well-run cultural charity to your giving list this year."

To be perfectly frank, we offered this tip, based on our knowledge of the sector and the giving habits of a few million donors, based on what we thought was happening in the non-profit sector, not what we knew was happening. Due to the glacially-slow reporting standards in this sector, one can never be absolutely sure what's happening with giving trends for at least a year after the period ends, if your basis for prognostication is public records.

But, as usually happens, we now know that what we think is happening is indeed happening, thanks to a big audacious (and relatively current) survey of the arts charities in California.

I went on Primetime Live last year on ABC, and basically attacked (as calmly as possible) those who have chosen in the last few years to step over hungry children on their way to the symphonies. When given the choice, of course, I'd still rather feed kids than fund operas, but I recognize that a developed society appreciates and supports its cultural groups. You have my permission to come home to the arts groups this year.

But don't forget the hungry kids too.

Your Mission is Creepy

I attended an event yesterday at the Home Depot headquarters in Atlanta. I appeared on a panel discussing "Corporate Strategic Philanthropy", which as far as I can tell, is when "corporations"are "strategic" in their "philanthropy" and don't just throw their money out the window to anyone who asks, but as funders, have very specific goals and objectives, and demand a high-level of accountability, benchmarking, and transparency from their potential funders. You know, the Charity Navigator way.

Anyhow, just to let you peek behind the curtain a tad, one of the things the funders were really worried about is "mission creep", where charities aren't a great match for the specific nature of the corporation's giving priorities, but rather than acknowledge that, and seek elsewhere for funding, they stretch what they do to try and get the grant. As a result, you get an organization that doesn't excel at delivering a particular program attempting to deliver the program, rather than playing to its strengths, and you end up with a nation of multipurpose non-profits that do everything, and none of it well.

On the flip side, I did hear a corporate giving officer, very candidly, admit that some of this is their fault. Not only have they narrowed their giving focus to a laser-like precision, so that most groups will never qualify, but once they build a good reputation with a trustworthy non-profit, they're more likely to ask that organization if they'd be willing to stretch, than bother to try and find a new charity that they haven't vetted thoroughly, and therefore carries more risk. And I don't think it's much of a corporate secret to acknowledge that large corporations hate risk, especially in their philanthropic endeavors.

The Marines Hate Jesus?

No.

No, no, no.

However, that's what a "surprised and disappointed" Michael LaRoe of the toy manufacturer one2believe would, ironically, have you believe.

In reality, they just like kids. All kinds of kids.

Here's what happened: The toy manufacturer tried to donate 4,000 talking Jesus dolls to the Charity Navigator 4-star charity, Marine Toys for Tots, and the Marines, like the grown-ups they are, turned them down. According to the group, they donate toys to kids "based on financial need and don't know anything about their background, their religious affiliations."

As a government entity, Marines "don't profess one religion over another," said the group's VP, Bill Grein. "We can't take a chance on sending a talking Jesus doll to a Jewish family or a Muslim family."

Mr. LaRoe of the toy manufacturer continued to express shock that there were kids out there that might not want this doll. Here's hoping, as misguided and myopic as he may be, that he follows through on his donation and sends these dolls to a more specific target, and finds some sympathetic and accepting Christian groups. It is a nice holiday gesture. Of course, they are just kids, and it is Christmas, so even those kids might prefer a truck or a ball, or something actually fun.

(Update, 11/17: the Marines apparently found someone who would take the dolls, and accepted them. All's well that ends well--Talking Jesus Dolls for everyone!)

Bush Administration Copies Charity Navigator?

Yesterday's USA Today had a front-page story about the federal government's attempts, led by Education Secretary Margaret Spellings, to better quantify the work of universities in this country, and to compel them to be more transparent in their activities. The goal is to compare the universities to each other through data and benchmarking, to make that information freely available to the public, and to make the schools subsequently more accountable to prospective students, and yes, taxpayers.

Leaving out any feelings I may have about the current administration and their qualifications for this job, this attempt obviously resonates with me, as it sounds an awful lot like what we've tried to do at Charity Navigator.

Said Spellings, in a quote that sounds just like the things I say every day, "If you want to buy a new car, you go online and compare a full range of models, makes and pricing options," she says. "The same transparency and ease should be the case when students and families shop for colleges, especially when one year of college can cost more than a car."

According to the article, university presidents are reacting much like charity leaders did to me 5 years ago. Patricia McGuire, president of Trinity College, doesn't like the car analogy. According to her, choosing a college is a "more like choosing a spouse — it can't be quantified."

"We don't need a federal one-size-fits-all solution," said Richard Ekman, president of the Council of Independent Colleges. "If the federal government wants to help parents, it could start by providing more money for low-income students."

This is of course, as Spellings rightfully points out, the famous "leave us alone and give us more money" argument.

I've heard both of these, and a million more. But the presidents need to adjust their thinking and recognize that data, while not a "be-all, end-all" measurement of anything, can be helpful, and allow us to compare apples to apples in a way that can be mutually beneficial to both schools and students, much like it has done for donors and charities alike.

I commend Secretary Spellings for her effort. I wonder, however, why her administration thinks this movement--for more data, more accountability, and more transparency--is desperately needed in the academic world, but one they've resisted in the charitable world, even though one could make a rational argument that the people interested in investing in private universities, the prospective students, are far more likely to take the time to research the institutions before handing over hundreds of thousands of dollars, than those who give their money to charity.

Mid-Western Anger

Here's the proof that I was in St. Louis for the past two days, an article from the St. Louis Post-Dispatch chronicling my visit. Based on my quotes, I sound like a very cranky man, or annoyed to be in St. Louis. Neither is true. I'm a very happy man, who sometimes becomes saddened when he sees opportunists and scammers who abuse the public trust, and St. Louis was a lovely place.

All the News...

I'm in St. Louis until tomorrow, speaking at the Champions for Children Summit tomorrow morning. On the flight out, I had the chance to read the New York Times special, once-a-year "Giving" section.

Unfortunately, we are not mentioned in any of the articles this year, for the first time in a while. One year, we were quoted or cited in four of the articles in the section, which began to border on the absurd. We are mentioned, however, by a couple of groups in the ads they took out, which while flattering, is a little strange, as I'm not sure I'm a big fan of organizations using their donor money to take out full-page ads in a periodical undoubtedly not read by most of their donors or the people they serve. But it's nice that they're proud of their rating, and willing to tell the world about it.

As I was reading the Times section on Giving, I couldn't shake the perception that I was reading, in one section (F, to be exact), exhibit A in everything that is right and wrong about the New York Times today.

On the one hand, it is a singular piece of scholarship, unmatched in the field (contrast it with today's story in Slate, where the editors there seem to have aspired to find the 13 most vapid intellectuals alive and challenged them to try and think of ways to have the least impact possible, given $1 million to give to a hypothetical charity), and devotes hundreds of thousands of carefully-selected gravitas-infused words to the non-profit world, and not a single mention is made of the negative, prejudiced, and hyperbolic stories of charitable fraud and abuse that usually serve as grist for the mainstream journalistic mill.

On the other hand, given the opportunity not only to summarize a vibrant and complicated community that protects our most vulnerable citizens from poverty and despair, but to educate and inform donors who will, in the next 5 weeks, give $100 billion to American charities, they decided to dedicate entire articles to such eclectic and effete issues as children working with kittens, celebrity galas, community credit unions, raising guide dogs, and getting bargains at thrift shops.

The greatest newspaper in the world. And then at the same time, they seem to go out of their way to announce that they're going to cover not what impacts most people, but what they at the Times seem to think is important, even if the only other people in America who think it's relevant are 4 people on the upper east side of Manhattan.

Hang Up the Phone, Example #496

We tell people all the time NEVER to make a charitable donation over the phone. And plenty of people who make their living in the telemarketing field then use their weapon of choice, the phone, to call me up and call me a heretic who hates everything about America.

And that's fine. I recognize that there are 2 or 3 people in America who call on behalf of charities, and do it with honor and integrity (ok, maybe 2 people), but I think the risks are simply too big for most donors and it's easier to make a blanket rule that no one should give over the phone. In many cases, the person calling is trying to scam you, and in the few cases where the caller represents a legitimate charity, the caller is usally a professional telemarketer who is contracted to make the calls on behalf of the non-profit, and for their work, gets to keep 50 to 95 cents on the dollar.

And of course, sometimes the caller is just a plain old criminal who is using the goodness of people's hearts to prey on them and rip them off, with no money actually getting to charities on the back end. This is called "stealing."

John Hargrove of Ohio is today's example of this. Mr. Hargrove, using a phone list he cultivated over the last 25 years, preyed on people sympathetic to veterans and solicited over the phone on behalf of "Veterans Source," "Veterans Network," and "Veterans Outreach" and had all of the checks sent to a private mailbox.

Not that it matters given that Mr. Hargrove was having the checks mailed directly to himself and cashing them for his own gain, but none of these organizations even exist. The number of victims that fell for Mr. Hargrove's bogus solicitations will be, according to the cops, "staggering."

People, please research your charities, give with your heads as well as your hearts, and remember that friends don't let friends give over the phone.

My phone lines are now open.

The People Have Spoken

Thank you for doing as I requested by voting on Tuesday. I know you never would have done it had I not asked you. There was no other reason to do it, obviously.

Leslie Lenkowsky of Indiana University has a nice piece over on the Chronicle of Philanthropy's site about what these elections will mean for the non-profit world. While I don't agree with much of it (I'm not sure the Council on Foundations is going to be suddenly marginalized because it's run by a former Republican congressman, nor do I think Rick Santorum's defeat will mean the death knell for the Office of Faith-Based and Community Initiatives), it's a thoughtful and far-reaching piece and shows that even in our protected and insular non-profit community, elections have consequences.

What will 2006 mean for our charities? And more importantly (to me), what will it mean for donors? Leslie has some ideas, but I think I'll wait and see.

Your Election Day Reading Materials

Print these two articles out from MarketWatch and take them with you to read while you're waiting in line at the polls.

The articles have nothing to do with politics or who you should vote for. The first is all you need to know to make your charitable giving decisions this holiday season. The second is all you need to know about what has happened in the charitable world in the last 12 months.

These are good reads, and we're prominently featured obviously, but I don't actually care if you take them with you to the polling place or not. That was just one of those clever literary tricks used by us professional bloggers to remind you to vote. So, do it. Please.

Fox in the Habitat Hen House

When people don't like what we do here at Charity Navigator, we are often referred to derisively as a "self-appointed watchdog." This is supposed to point out that we're sticking our noses into other people's business without permission, and therefore, I suppose, imposing our values on a charity without its permission.

This is, in a word, "stupid."

I read recently that pretty much all relevant watchdogs are "self-appointed." That's kind of the point. Anyone think the Independent Sector would hire us to keep an eye on things?

In my opinion, this argument shows the immaturity of the sector in that we have to try and tear down anyone that dares to try and figure out which charities are worthy of support.

And more importantly, would you rather have us appoint ourselves to the position, or should we just leave it up to charities? They're all trustworthy, right? They take this "watchdogging" thing seriously, right?

Actually, you might think the opposite if you read this morning's Post-Tribune of Indiana. It seems that Patricia Bobo, who is currently accused of stealing more than a hundred thousand dollars from a public housing authority in Gary, Indiana, decided to take a break from the stress from her upcoming criminal trial, and work for Habitat for Humanity International, in Georgia.

What was Ms. Bobo's job at Habitat? Was she pitching in by hammering nails?

No, she had been hired by Habitat to scrutinize their books and make sure their spending was in compliance with the laws of the land.

Habitat's response was that it is "comfortable with its background check process."

I suppose it's a "self-appointed background check process."

Is Your Foundation Smart or Just Rich?

Tom Vander Ark announced yesterday that he is resigning at the end of the year. Who's he, you might ask?

For the last seven years, Mr. Vander Ark might have been the most important person in the world in the field of public education. He has been the executive director of the Gates Foundation's education initiatives, and in that role, he oversaw the dispensation of about $3 billion in grants to students and schools.

I have no idea if Mr. Vander Ark was any good at his job. I learned long ago, in a previous career, that whole scale education reform was outside my skill set. But I was struck by something Mr. Vander Ark said upon his resignation.

"I don't think anybody ought to run a big grant program forever," he said. "You start to lose touch with the field, and you confuse grantee interest with acceptance of your ideas. I think it's healthy to go back into the field where your ideas are market-tested."

I couldn't agree more. But next time you get a chance, check out the tenure of program officers at your favorite foundation. You'll find that Mr. Vander Ark's philosophy is not the norm.

Three other tidbits: 1) I spent the last 2 days visiting a charity in Salt Lake City, Utah. According to NewTithing Group, Utah has the most generous citizens in the United States, giving the largest percentage of their incomes away each year. 2) Check out the English equivalent of Charity Navigator (in spirit only--we have no formal relationship). I think it's smart, and cool. Good luck, gang. 3) For my friends in Arizona (or on the internet), I'll be on KTAR at 7:55 EST tomorrow morning.