Lazy Charity

Ken Stern urges us to do our homework and get smart about donations:

In 2010 Hope Consulting, a San Francisco–based consultancy, undertook one of the most comprehensive surveys ever of donor habits. It found that two-thirds of all donors report doing no research at all on their charitable contributions each year, and just 5 percent do two or more hours of research. On average, Americans spend about four times as long to research television purchases (four hours) and eight times as long researching computer purchases (eight hours) than they do with more expensive investments in charities (one hour). Indeed, some of the latest research suggests that Americans may subconsciously avoid finding out the facts in fear of undermining the “warm glow” they get from giving.

Instead of doing research, Americans give out of habit: Almost 80 percent of all gifts are labeled as “100 percent loyal,” meaning most people give to the same familiar brands year after year. Donations flow to alma maters, or to a friend’s charity, or to the charity that is easiest to give to through work. That’s a big reason why the list of America’s largest charities has remained remarkably inert over the last 40 years—because they’re rewarded for familiarity rather than any measure of effectiveness or innovation.

Among his advice:

Go for a high-impact donation. This might sound like it’s from the “No Kidding” Academy of Donor Advice. But in fact only a small subset of donors—representing 16 percent of all donors and 12 percent of all donations—define themselves as “high impact,” supporting the charities that create the most social good.  The rest fall into categories such as “Repayers,” who give to their alma maters, “Personal Ties,” for people who give to their friends’ organizations, or “Casual Givers,” who give to well-known nonprofits through payroll deductions or who buy a table at a charity event. All these reasons for giving are completely unrelated to rewarding the most effective charities. Until you think and act like a high-impact donors, you’ll get less than what you pay for.