If you long to hear Jesus say, “good and faithful servant,” you’ve probably put significant thought into how to manage the resources God has entrusted to you. But what happens when a good steward makes a bad mistake? These insights from Brian Grasso’s painful giving experience can help you move past fear and regret, so you can evaluate charities better.
As a high school student, Brian was part of a Bible study that opened his heart to the scriptural principle of God’s radical generosity. So, he and his friends decided to put giving into practice.
They started a club to raise money to fight poverty in Jesus’ name and held countless fundraisers, from bake sales to car washes. By the end of Brian’s senior year, they had raised $61,000 for several global charities. But, eventually, he was confronted with a shocking truth about their hard-won efforts.
“A year later, I learned that half of the money we gave away, almost $30,000, went to a charity that may have been mismanaging the funds,” Brian says. “There was a $37 million-dollar class-action lawsuit against the charity, and it was unclear whether our donation had actually done anything to help alleviate global poverty. That was an extremely painful experience for me.”
“It was blood, sweat, and tears mobilizing high school students to wash cars on Saturday mornings for $10 a car. To think what you’re doing is impacting lives around the world and then find out that might not have been true was devastating.”
An investor mindset
What Brian experienced as a young giver was the impetus for the creation of his own nonprofit, Simple Charity. Their work focuses on growing a movement of Christian students fighting global poverty through college chapters across America. But their mandate also includes a deep charity-evaluation process that they use to provide philanthropic advising to help people grant with confidence.
And while Brian loves to share his insight and methods of charity evaluation, he emphasizes that every approach has its limits, and it’s important for givers to think like investors and temper their expectations.
“There are things we can do when evaluating charities to preempt some mistakes,” he says. “But there’s no magic formula, and we’re never going to do it perfectly right.”
“It’s funny. In the world of investing, you would never think, ‘Oh, one of the stocks I picked went down. I’m an unsuccessful investor, and I shouldn’t invest anymore,’” Brian says. “I think the Bible encourages us to invest our talents, and God rewards us for putting them out there, not burying them. It’s better to do something and to have some wins than not to engage at all.”
A simple approach
Brian’s team uses three primary categories to evaluate each charity:
1. Operations
These are the basic questions people typically think about when evaluating a charity. Do they have an independent board? Have they done a financial audit, especially if they have a budget over half a million dollars a year? Do they publish annual reports? Do they communicate well with donors? Are they operating well? Do they have best practices with project management internally? Are they a well-functioning organization?
“It’s important to remember that it is not enough to evaluate a charity just based on operational best practices,” Brian says. “A charity could have an independent board, efficient staff meetings, and a clear org chart, but they could be working on the wrong thing. Maybe they aren’t really helping people. That’s why the following two categories of culture and impact are huge when evaluating charities.”
2. Culture
When Brian’s team looks at an organization’s culture, they try to determine if it is mission-centered and kingdom-first. “As Peter Greer, head of HOPE International, says, ‘Logos and egos get in the way of doing good work,’” Brian says. “So, we want to make sure no one’s ego is front and center in the organization and that power is diffused throughout. That’s really important.”
Another important aspect of culture is humility and openhandedness. Are they willing to collaborate and provide a platform for other voices and charities? For example, on Giving Tuesday, HOPE International publishes a list of five other charities they recommend people give to.
Brian believes that cultural humility is also an essential component, especially if the charity is working in an international context. “We ask, ‘To what extent do local partners and leaders have authority in shaping the programs?’” he says. “We want to know that the people closest to the problem have decision-making power and authority to solve the problem.”
“If an international organization doesn’t have local leaders in positions of authority, then we just cut them out right away. We’re not going to give, because culture is really complex. If you’re working in Uganda, you should be listening to the people of Uganda, and Ugandans should be driving those solutions.”
3. Measurable impact = stories!
When Brian and his team were thinking about determining effectiveness, they had to decide what returns they wanted to see. What were the “returns” of nonprofits? The answer they came to might surprise you. Their bottom line for charity returns is stories.
“We worship a God of story,” Brian says. “And every individual’s story has incredible worth and value. There’s something divine about our stories. So, we decided a charity’s return on investment should be stories of life change: People who profess faith in Jesus, trafficking survivors who find healing and restoration, or homeless veterans who receive affordable housing. Even prevention is a story, a story of the trauma that didn’t happen.”
Brian says that when you give to an organization that’s really addressing problems, what you’re investing in is multiplying stories like that. “Through your giving, you participate in these stories of life change,” he says. “That’s part of the thrill and joy of generosity.”
For more insight, read Brian’s article, “How to think like an investor when you give,” and check out this helpful resource list.
