Why Donors Must Consider Long-Term Impact this Giving Tuesday

Fresh on the heels of Thanksgiving, the charitably intended “Giving Tuesday” was originally created as a counterweight to the consumerism between Black Friday and Cyber Monday. The intention? To consider forgoing that fabulous pair of boots or that upgraded 65 inch Smart TV for a good cause. What manufactured holidays like Giving Tuesday signal is that altruism offsets consumerism—which, newsflash, it doesn’t—because all those holiday savings don’t always get kicked back to good causes. 

But Giving Tuesday remains strong. In 2019, it generated almost $2 billion. Yet, as generous consumers seeking to have an impact, we should think more seriously about how those donations can be directed to the most effective organizations. And these organizations don’t just need help one day out of the year – they’re providing essential services to communities every day, and they need consistent support. 

So how can you become a more intentional and effective giver this year?

1. Do Your Homework

Donors who fully appreciate the importance of rising to the challenges their communities face should always support organizations that can demonstrate that they have an appreciable impact. One of the most persistent trends in the nonprofit sector is the increasing emphasis on the ability to measure outcomes. More and more grantors are demanding transparency about how effectively their funds are being used, and although nonprofits recognize how vital it is to demonstrate their impact in a concrete way, many acknowledge that they’re not capable of doing so yet. 

Donors have a responsibility to vet the organizations they support – which means taking a close look at the available information on how an organization is run, the effectiveness of its programs, and so on. This message is particularly relevant as Giving Tuesday attracts many first-time donors who may not be familiar with what they should look for in an organization. 

Understand the work the organization you are giving to does. Even if it’s a newly formed organization, go to their website. Read a little more about their work or their intent before giving. A good place to start is Charity Navigator.

2. Use the Right Measures of Effectiveness

There are more than 1.4 million nonprofits in the United States, and they all have different management teams, goals, and capacities. Donors have to be mindful in selecting which organizations align with their principles and priorities – as well as the ones that have the capabilities to execute their missions. 

When gauging an organization’s effectiveness, donors shouldn’t be taken in by the “overhead myth” – the idea that nonprofits should always keep overhead as low as possible. In an open letter, the leaders of the BBB Wise Giving Alliance, GuideStar USA, and Charity Navigator criticized the “false conception that financial ratios are a proxy for overall nonprofit performance.” Of course, financial health is an indicator of effectiveness, but financial health isn’t synonymous with low overhead – many highly effective nonprofits have large staffs, equipment, and other expenditures that help them achieve their goals. 

What matters more t is a nonprofit’s ability to track and report a set of well-defined outcomes. They should be able to articulate exactly what they want to accomplish and demonstrate clear progress toward those goals. 

3. Focus on Long-term Collective Impact

Nonprofits are taking a larger and larger role in the provision of essential services in communities around the country, which means it’s time to rethink the relationships between these organizations and local governments, businesses, other grantors, and one another. The nonprofit sector isn’t just integral to efforts to combat poverty, discrimination, and other systemic causes of inequality in the United States – it also employs more than 12 million Americans, making it one of the largest workforces in the country. 

This is why communities have to focus on forging and strengthening connections between (and within) the nonprofit sector and other groups of stakeholders. For example, nonprofits in many different cities have been joining forces and cooperating with local businesses and governments to rethink criminal justice, economic inequality, and a broad range of other issues in the aftermath of the tragic killings of George Floyd, Breonna Taylor and others (see: the work of the Minneapolis Council of Foundations, which is bringing many different stakeholders together to address systemic racism and other disparities). This mutual support is necessary to mobilize stakeholders and ensure that the nonprofit sector is receiving the support it needs to continue delivering critical services. 

Giving Tuesday is an opportunity to go beyond one-time donations and educate ourselves about all the ways nonprofits are helping communities thrive – as well as all the ways communities can come together to make those organizations as sustainable and effective as possible. If I had my way, we’d let go of this idea of allocating one day a year to think about our charitable priorities, and make a concerted effort to weave it into our everyday living. 

Sevetri Wilson is founder and CEO of Resilia. Follow her on Twitter @sevetriwilson.