Funding social change with giving offsets

I’ve long been fascinated by the simple concept of carbon offsets. A carbon offset is an arrangement where corporations “offset” their polluting by purchasing carbon credits that fund the development of renewable energy.

Without getting into the policy particulars of carbon offsets, the concept is straight forward and intuitive. Carbon offsets got me thinking about offsets more generally. Corporations, and individuals, do a lot more than just pollute the planet. Why isn’t there some sort of giving offset for everything?

While I was compiling my list of nonprofits to donate to for my year end giving I ran an experiment to see what an individual donor giving offset might look like.

Building a giving offset

For my personal finances I use the popular account aggregation service Mint. Since my finances are consolidated in Mint I figured it would be convenient to base my giving offset calculations using a transaction history exported from its website.

To automate the process of logging in and extracting transactions from Mint I used the excellent Python library mintapi. Mint conveniently categorizes all financial transactions, so I mapped each Mint category to a cause. For example, pet related transactions were assigned to animal related causes, education expenses were assigned to education causes, restaurant purchases were mapped to hunger, etc.

Based on the mapping of Mint categories to giving offsets, the system I built recommended I allocate my charitable giving for 2015 according to the following chart.

Given the current mapping and my personal spending habits, by far the largest offset recommendation is in the “Poverty and homelessness” category followed by “Food and hunger”. Readers of Full Contact Philanthropy might rightly wonder whether the current mapping is “fair”, or whether it instead reflects my own bias toward investing in poverty related issues. I don’t know the answer to this question, but my guess there’s a fair amount of bias (isn’t there in everything?).

Since Mint data extracts include one’s entire transaction history, not just the most recent year, I also ran the giving offset recommendations over the last few years as shown below.

As you can see from the above graph, there’s a fair amount of change in my giving offset recommendations from 2011 through today. Around 2013 suggested giving to animal causes grew considerably, reflecting vet bills one of my chihuahuas has been racking up the last few years. And yes, I took the giving offset’s advice and added animal related causes to my giving portfolio.

What now?

I’m not sure a giving offset is a good idea. I’m also not sure it’s a bad idea. I think in some ways I’ve only recently fully accepted and moved on from the closure of my last company Idealistics. This acceptance has resulted in a flurry of ideas and activity around those ideas (reflected partly in more writing on this site). The giving offset is one of those ideas.

However, I am committed to trying out various new ideas and putting those ideas out in public rather than keeping them to myself. I generally like the idea of charitable giving reflecting the life one leads and trying to offset selfish spending by re-investing in the world. I have some thoughts on how one might approach a more robust version of a giving offset, but I’m hardly married to the idea. What do you think?

Martin Luther King Day and philanthropic inactivism

I joined the social sector because I care deeply about social justice. Somewhere along the way my vocation became my job. Where I used to stay up late thinking about the millions of people in the United States with less opportunity than me simply for where they were born or the color of their skin, and the billions around the world living unimaginably on less than $2 per day, I now stay up late worrying about saving for my future and how I will provide for my family.

Social justice crusader indeed.

Everyone has to live, and everyone has ambition. On Martin Luther King day I am reminded not to let my desire to live a good life overpower my desire for everyone to live a good life.

While I firmly believe our society looks to the philanthropic sector as some sort of moral compass (seriously, everyone assumes I must be a noble person for working at a nonprofit), I don’t think we do much with it.

Passionate people join the social sector because they see the world as it is, and have a vision for how it can be better. While individually there are lots of different visions, collectively we don’t really have any vision at all, resulting in a philanthropic community that while assumed to have the moral high-ground ultimately does not stand for anything.

I think there are plenty of folks who don’t find this reality problematic. It seems a strange consensus that philanthropy and politics do not mix. Yet it is our politics, and more specifically our collective values, that creates the maladies we aim to address.

Martin Luther King was a civil rights pioneer not for creating a nonprofit that provided social services to help African Americans live a little better, but by challenging the laws and social values that subjugated a significant portion of our community. Social interventions like homeless shelters, food pantries, and tutoring programs are fundamentally responses to injustice. While these programs are wrapped in apolitical blankets, they are plainly and intuitively critiques of the system we live in.

Yet as a sector we don’t consolidate and articulate those critiques, and it is all for self serving reasons. Large corporations that perpetuate income inequality and pollute the planet also give in large amounts to nonprofits, and setup foundations that fund our work (and our lives). Politicians that support draconian immigration laws that breakup families also hold the keys to preserving the charitable deduction.

You don’t bite the hand that feeds you, so the saying goes, and the philanthropic sector certainly abides. But maybe we are hungry for the wrong thing.

Maybe we in the social sector can get more from Martin Luther King’s legacy than a paid vacation.

Why nonprofits lie about impact

I was listening to a podcast with Dan Ariely, professor of psychology and behavioral economics at Duke University, about “Why Everybody Lies”. The discussion was really interesting, but what I found especially compelling from a philanthropic lense was a portion of the discussion where Professor Ariely discusses an experiment where people’s lies affected how much money could be given to charity.

The basic point was that people are more likely to lie when the lie benefits a cause.

As the title of this post suggests, the behavioral finding highlighted in the study got me thinking about why nonprofits seem inclined to inflate their program impact claims. I used to more simplistically think that such fudging was the simple calculus that more claim to impact means more money for me. After listening to this podcast, my guess is there is impact inflation is more invovled, as the weight of the cause likely outweighs the knowledge (tacit or otherwise) that impact claims are not quite as they appear.

If nonprofits are right that their impact is large (even if not as large as they claim), then perhaps the subtle dishonesty is not so bad. But what if a nonprofit’s exaggerated claim makes a donor give more to one organization than another that in actuality is more impactful? Worse yet, what if a nonprofit actually does harm while claiming impact?

There are some in the international development space calling for cash transfers to act as a baseline metric that all other interventions should be compared against, an idea I have mulled domestically as well. If it is true that nonprofits inflate their impact metrics, then cash transfers as a comparison point gets necessarily devalued.

The challenge here of course is not just the dishonesty of inflating impact metrics, but the moralizing inherent in all of us that allows us to override fact for what we think is a more just fiction. The risk is that if we allow our rationality to get hijacked by our moralizing, we ironically run the risk of making worse the issues we deem important enough to lie for in the first place.

Nonprofits do not blog, but they should

I based GaveTo, the side project I’ve been working on to help me and other donors keep updated on our charitable gifts, in part on the assumption that nonprofits blog. This was a bad assumption.

Since I’m rolling GaveTo out in a slow elongated beta, I’m asking beta testers (signup to be one!) to recommend nonprofits they give to that they want added to the GaveTo database. While the nonprofits I give to are prolific bloggers, I wrongly assumed this was largely true of all nonprofits. Like any good beta testers, the GaveTo beta testers have suggested a ton of nonprofits that do not blog at all, calling into question one of the GaveTo founding assumptions.

For GaveTo the obvious implication is that I need to rethink some elements of the system, as it really is designed around the beliefs that nonprofits publish blog feeds as Atom or RSS.

GaveTo will survive, but the more distressing issue to me is that nonprofits do not blog. Although they don’t blog, that doesn’t mean nonprofits don’t produce content. They do, and lots of it. But the content is siloed into social media platforms like Twitter and Facebook which have a history of developer hostility. This matters for two reasons.

First, despite their names, social networks are private platforms, meaning the platform provider and not the nonprofit owns the content. As these platforms grow they become increasingly more insular, making the content produced less open and available for use outside the platform. This precludes any innovative use of content beyond the platform provider selling advertisements against it.

Second, and perhaps worse yet, social networks by and large encourage publishing of stupid content (hello cat gifs). Nonprofits have tons of interesting things to say about what they are doing, the problems they are solving, and what works and what does not. Nonprofits should blog about the substance of their work, even though social networks don’t always reward headier content.

There are some nonprofits bucking this trend, publishing thoughtful content and reaping the donor dollars and mindshare of informed donors.

Social networks are fine for trivial bits of donor clickbait, but that doesn’t mean nonprofits should stop catering to more engaged donors. Blogging is the perfect platform for nonprofits to reach savvy donors who want to really learn about what a nonprofit does. Too bad nonprofits don’t blog.

Philanthropy does not stand for anything

Donald Trump might become President of the United States, and the charitable sector doesn’t give a fuck. That’s the gist of a dead on post titled “In the Time of Trump, Philanthropy Must Find Its Voice” by Maxwell King, CEO of the Pittsburgh Foundation.

Mr. King warns:

What Donald Trump represents is a threat to the very idea of community. The normal discourse of politics can produce a sharing of ideas and perspectives that leads to common ground and facilitates communal action. Historically in this country, this common ground has been the basis for solving our most persistent problems.

The nonprofit sector exists to stand with those marginalized by society. We are supposed to stand with the poor and to fight for those new to our country. Where the free-market creates inequality we task ourselves with empowering everyone with equal opportunity.

In short, we stand for something. There are nonprofit anti-poverty groups but no pro-poverty groups. There are nonprofit anti-defamation leagues but no pro-defamation leagues. Nonprofits are different from businesses in that by our very nature we take a stand.

Yet philanthropy as a whole, the nonprofit sector as an industry, has not taken a stand on the unprecedented hate that Trump represents. Instead, our representatives in Washington D.C. like Independent Sector are too concerned with preserving the charitable deduction to lead the sector in addressing an issue of actual national importance.

The Charity Defense Council claims to “fight for the people who fight for the people”. Yet despite the philanthropic sector’s considerable clout and resources, the only recommendation we have for the country at this historic juncture is to make sure rich people can get maximum deductions for naming gifts to their alma maters. Who are we fighting for again?

The Republican party is a mess. Whether you’re a Democrat or a non-Trump supporting Republican, it is in your personal best interest to help the Republican party right itself. Indeed, it is in the country’s best interest that Donald Trump not just fail to win the presidency, but that he not secure the nomination of one of our country’s two major political parties.

I’m well aware of both the legal limitations and the sector’s cultural inclinations to stay apolitical. But Trump’s candidacy is unique in that he threatens the entirety of our sector’s body of work, and more importantly the lives and well-being of those we purport to serve.

If philanthropy stood for anything, we would stand united against Trump. The country looks to philanthropy as its moral compass, let’s pick a direction and point.