Were your eyes opened by our piece, 12 Red Flags: Is Your Favorite Charity Making An Impact? Now we’re giving you 12 Questions to Ask Before You Donate. Organizations that are the most successful at bringing in donations have a staff of marketing strategists, and they are experts reaching you with moving stories and images. Asking the questions below will help you move past those triggered responses to find out if your money is really making an impact to help the poor or marginalized.
- Does Data Show That Lives Are Actually Changing? Genuine opportunities for survivors of tragedy and abuse will show evidence of improvements (both financial and non-financial) in the lives of their participants. Results from entrepreneurship classes and job training should be clear and easy to interpret. When data is available to prove results, organizations will always present it to the public in an open way. This might look like increased sales, profits, income, jobs created, or debt eradicated. These successes will naturally result in improved quality of life for the recipients of the charity program.
When “results” are stories, rather than data, or focus on personal impacts to donors rather than beneficiaries, it’s hard to believe that the organization’s true focus is on authentic impact.
- Can You See The Power of Business At Work In The Organization? Business holds the power to change lives and outcomes for future generations. This power should be obvious in any charity marketed as a “business for good.” Are beneficiaries doing work for a return and seeing direct results in their own lives? When donations increase, do more beneficiaries get included in the program? Are sponsoring organizations expanding the reach of the charitable business or funding the same programming and recipients repeatedly?
An effective business provides for those doing the work and expands on its own to serve more people. Beneficiaries of any social enterprise should be set on a path to change their own futures. They should be given the skills and connections to liberate themselves from future charity.
- Who is the customer? Survivors of tragedies are the “customers” of charities while under their care during and after a crisis, and rightfully so. But once the crisis has passed and healing has begun, leaders should work to guide beneficiaries’ mindsets to new possibilities. Expectations have to change from endless receiving to putting others first. Survivors want compassion and understanding, but they also want to provide for themselves and their families.
A socially impactful business guides those whom they serve to become providers for their own customers or employers. A charitable business is only viable when an ethical product or service is exchanged for fair pay.
- Are Experienced Business Leaders At The Table? Experience Matters. Trusted members of the local business community should always be included in planning discussions with ministry leaders. Authentic and relevant opportunities cannot be created without the input of local leaders. They have the unique ability to share lessons learned and knowledge of current businesses. Their connections and influence are essential to bridge the gap between charity and the local marketplace.
- Is The “Business” Market-Driven? In assessing a traditional business, the assumption is clear that a company cannot be successful if it does not bring in enough money to support daily operations and growth. “Businesses for good” are typically held to a different standard. Charities are invaluable at helping survivors overcome obstacles during and after tragedies. Charitable businesses exist for the next step, the path to independence. When donations are required long-term to maintain the status quo, that “business” is really a charity. Before beginning any training programs, existing job opportunities should be identified for the graduates. Before opening a business, markets for the resulting goods or services must be assessed.
Program leaders should not promote outdated skills useful only as a hobby, or “entrepreneurship” training that develops a theoretical product or service. The question “How can we sell this?” should never be asked after money has been spent on training.
Program leaders should not promote outdated skills useful only as a hobby, or “entrepreneurship” training that develops a theoretical product or service. The question “How can we sell this?” should never be asked after money has been spent on training.
- Are loan services improving the borrowers’ quality of life? The micro-loan charity model has boomed in recent years. Claims suggest that giving around $25 US to an impoverished individual in a third world country will establish them as an entrepreneur. Just a small financial investment will somehow reset a broken situation. With little to no interest, the loan is paid back from the profits of the new business. Then, that same $25 can be used to create another entrepreneur.
This assumes that all vulnerable individuals are entrepreneurs in waiting. Is it realistic to believe that all people who are struggling already possess the skills and knowledge needed to start a successful business? When looking at a micro-lending charity, research if the well-being of clients is actually improving. The goal should be complete independence from ongoing debt with the micro lender. A few rags-to-riches stories about a handful of natural entrepreneurs do not indicate an overall successful lending program. Clearly presented data should not stop at showing the number of people being helped and the low interest rates. A successful program can only be proven by the number of former borrowers now succeeding independently.
- Have the ministry leaders ever led a business in the area before? Leaders of business driven charities should have local business experience themselves or recruit others who do. To achieve success through a charitable business program, beneficiaries must first be given relevant insights and guidance.
Think of it this way: you are about to white water raft for the first time. You can choose between a guide who has rafted this river many times or a well-meaning guide who has only ever been on the water 1,000 miles away. While both might know a lot about rafting, only one can be trusted to safely navigate this river. Local wisdom and knowledge of specific opportunities and pitfalls are required when guiding others through new and difficult challenges.
Think of it this way: you are about to white water raft for the first time. You can choose between a guide who has rafted this river many times or a well-meaning guide who has only ever been on the water 1,000 miles away. While both might know a lot about rafting, only one can be trusted to safely navigate this river. Local wisdom and knowledge of specific opportunities and pitfalls are required when guiding others through new and difficult challenges.
- Do They Reach The Finish Line, or Only Start The Race? Entrepreneurship and business training programs typically prioritize their graduates’ ability to convert their ideas into income. However, asking a recipient of these services what they consider the finish line might differ completely from the end of the program’s scope of service. Setting an individual up with the knowledge and resources to open a business is not the same as preparing them for the obstacles that come with actually owning one. Reaching the actual finish line should be within the scope of any charitable business’s services. You can read more about our philosophy on this in our Closing the Gap article.
- Where Is the Starting Line? Training an impoverished survivor of abuse or tragedy on trendy business jargon or sophisticated methodologies is almost never effective, and rarely relevant. The basics of business must first be presented clearly, followed by mentorship from local leaders. What is important in one setting is irrelevant in another. Cultural and socioeconomic challenges have to be addressed. Leaders must recognize that no one person’s aptitudes and challenges are exactly like anyone else’s.
- Who’s Invited to the Table? Third parties should always be allowed and invited into the program. As we stated above, each individual receiving services is different, and effective leaders are open to bringing outside experts in to help as needed. An outsider’s perspective will test theories and plans beyond the protective bubble of charity.
- Do The Leaders Have Skin in the Game? In a successful business driven charity, participants are engaging in business activities with others who have something at risk. This provides a natural tension, feeding essential development. Often for the first time, participants are finding a way to honor commitments and meet a customer or employer’s expectations. Disengaged leaders don’t push for a mutually profitable outcome like those who are taking a risk themselves.
- Are Their Priorities In Order? Charity 101 starts with a strong commitment to prioritize the well-being of the participants. A successful ministry leader latches on to their selfless role and leaves their ego behind. A leader’s desire for a positive outcome for participants is more important than project ownership, control, personal credit, and opportunities for advancement. Leaders with the real finish line in mind will use any ethical collaboration and creativity available to them. The end goal is only achieving results for the beneficiary.
It is our conviction to see survivors of abuse and trauma experience tangible benefits. Those we serve have already been mistreated and have often lost trust in leadership. When they place their trust in the hands of charities and ministries who claim they can help, follow-through and authenticity are extremely important as relationships are built. We take the role of leader and teacher very seriously, especially when the future of people living on thin margins is at stake. The challenges we all face together are complex. It is a duty and obligation to God and man to care for others as we care for ourselves.
In the midst of many careless leaders in the charity and development space, we are thankful for the organizations doing good work. Our goal with this piece is to encourage you to cast a vision for what compassionate AND effective service looks like in the world of “economic empowerment.”
At Viable, with the help of donors and supporters like you, we are experiencing tremendous results, creating and facilitating authentic job opportunities for people in desperate need of income.
Our finish line is helping our beneficiaries escape not only poverty, but charity too.
Let us know if you or someone you know are facing what appear to be insurmountable obstacles. We are honored to help. If you simply want to validate what you’re currently doing or explore ways to make incremental improvements, we’re here to discuss our philosophies about liberation from charity with you. We also always welcome opportunities to learn from what you are doing in an effort to continuously improve our own work.
