Monday, February 24, 2014

The Problem With 'Charity Ratings'

We all want someone to tell us the best way to do things.

What to eat, where to shop, who to listen to, what to drive, what to play. That's why sites like TripAdvisor and magazines like Which? are so popular.

It's also why businesses like Charity Navigator and Guidestar exist (and why we're about to see them start launching in Ireland, a year later than I predicted) - charities are complicated beasts, it's hard to know where to donate. It's a hassle to do research. And so we want someone to tell us this charity is good, this charity is bad, and this charity is better than both of them.

The problem of course is that it's not that simple.

Just because you spend 90% on salaries doesn't mean you're not making a huge difference. Just because 99% of your income goes 'directly to those that need it' doesn't mean you're actually helping. You might have cured cancer, but if you don't have a website to publish your accounts then should you be written off?

You might judge Pepsi on it's taste as opposed to its CEO's salary. You might judge Apple on how cool their stuff is (as opposed to whether their factory staff are killing themselves or not). But the end 'product' of a charity is a bit less tangible and so it's convenient to cling to whatever simple figures we can find.

And the biggest mistake that's always made when 'judging' a charity is looking at last year and last year alone. What about the years before that, and what about the next 10 years? You might not 'waste' any money on fundraising, admin or wages...but then you might not exist next year.

William MacAskill put it best: "What we can learn from one of the worst charities in the world". As he beautifully argues, even if you tick all the boxes and get top ratings, it doesn't mean you're actually making the world a better place. You might even be making it worse.

More than that, these sites can be really damaging to great organisations. Right now we find ourselves trying to unravel the Overhead Myth that was perpetuated and encouraged by the very organisations that are now debunking it.

If we're going to have a charity rating website it needs to cover impact, transparency, finance and more (cue another blog post: The Perfect Rating Website).

But even then it will probably never be complete.

It's the same reason there's no 'best person to date' and no 'best business'. And no website telling you what company to invest in (I've said it before: donating to a charity is like investing in a business).

Would you invest in a business because they made a profit in the only year you looked at? Would you invest in a business because they have the cheapest staff? Would you invest in a business just because they're transparent? Just because it's right for me, is it right for you?

And undermining everything is the simple fact that we're driven by emotion...which is what makes us humans so interesting.

I can't help it - even though it's completely irrational. I'll keep donating to charities that make me cry. And I'll dream of investing in my kitten hotel and restaurant ('The Catz-Rarlton").

1 comment:

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