This post was provided by Patrick Johnston, Chair of the CanadaHelps Board of Directors.
Donors to Canadian registered charities are becoming more and more discerning. They are looking for ways to ensure that their charitable giving will be effective and have a positive impact on individuals and communities, at home and abroad. The steps described below can serve as the basic building blocks for a strategy to maximize the impact and outcome of a charitable giving plan.
Advances in technology make it much easier for donors to undertake basic research about charities. For example, the charitable status of an organization can quickly be verified by visiting the website of the Canada Revenue Agency. The on-line donations portal, CanadaHelps.org, can also verify the status of a charity. But it also enables people to make donations and receive tax receipts in real time – relieving the charity of that burden. And the website CharityFocus.ca provides easy access to a rich source of information about a charity’s finances, governance and programs. These and a host of other on-line tools, make it much easier for donors to undertake basic due diligence when it comes to giving.
Focus, focus, focus
With more than 85,000 registered charities in Canada, the selection of charities to support can seem overwhelming. Experienced donors have learned, however, that rather than making a large number of smaller donations, it is much more effective – and personally satisfying – to make larger donations to a smaller group of charities.
Look beyond the numbers
Financial statements can provide useful information about a charity. But they should never be used as the only means of assessing a charity’s effectiveness. And, don’t confuse low administrative or overhead costs with charitable impact; the latter doesn’t necessarily follow from the former. In fact, donors are better advised to seek out charities that clearly explain how they have made a difference with the donations they received. If a charity can’t adequately explain how it helped to make the world a better place or improve the human condition, does it really matter that they have low administrative costs?
Seek out the “unusual” suspects
Many Canadian charities have long histories and traditions. Some are “household” names and provide a range of services worthy of support. But don’t overlook the larger number of less well known charities that are also making important contributions to society. They may be small and community based charities. Or they may be charitable “start ups” established by young, social entrepreneurs. Some “start ups” bring more innovative and creative approaches to long standing problems with the potential for huge impact. Supporting some smaller and newer charities, as well as some larger, traditional organizations, is a simple tactic that may increase the potential for charitable impact.
Canada’s charitable sector has the attributes of a kind of “marketplace”. It comprises a number of different charities having fairly similar mandates with many of them addressing big complex issues and problems. If it is true that two heads are better than one, it is equally true that two (or more) charities working together are more likely to increase the potential for impact. The smart donor will privilege or give preference to charities that show evidence of their willingness to collaborate and work with charities having similar goals and objectives.
Many Canadian charities are tackling some of the greatest challenges facing society and donors need to have realistic expectations about what can be achieved. But following the steps outlined above can provide some assurance that charitable donations will be used effectively in pursuit of the common good.