Grace Nicolette

The wonderful thing is here in the United States, most nonprofits have annual reports and also tax filings, the 990s. You can actually look into their website just to see like, how are they spending the money? And usually nonprofits are actually pretty clear on how they're spending it. As a donor, I would say, give in a way that gives a nonprofit the maximum flexibility.

We know some donors who give to a food bank, let's say, and we'll say, well, I only want it to go towards the food and not towards any of the overhead. But actually we saw specifically during COVID, That kind of flexibility for nonprofits is actually really key. When kids were out of school, yes, they needed food and they needed some tutoring and they needed some other supports.

And so nonprofits are on the front lines. And so if you can give in a way that is not restricted, that really helps them. And then if you have any questions, if you reach out to a nonprofit, most of the times they will call you back and answer your questions.

I'll use myself as an example. I think that when I first started giving and I graduated from college and had my own income, I was really excited to be able to give. And I just wrote a bunch of really tiny checks to a lot of small nonprofits. I didn't really have much of a strategy or a thought behind it. If someone asked me, I would be responsive.

And I think that there's a lot of power in that, too. But I think that particularly for larger donors, it really does make a difference to, again, as we talked about before, to sit down and write down, what do I hope will happen with my giving? What would I like to be contributing to?

And so having that strategy then can help bring to light, okay, well, here are the folks that I should be talking to. This is my lane, not some other lane. Because really, you could get pulled in infinite number of directions with many causes. There's so much need in the world. And strategy really is combining some of your resources and giving in a deeper way than just spreading it around.

Yes.

I don't have specific data on that. I mean, my sense is that what you're alluding to is that individual giving did go down for, I would say, donors who are giving smaller amounts. I think that for donors who already were giving a large proportion of their incomes or wealth that the itemizing actually still continues.

I think that especially with COVID, we saw just tremendous needs in our community. And so I think that there's sort of a challenge for those of us who might be giving on the cusp around of that 14K mark to really not be swayed by that and actually just to be as generous as we can, because it really does make a difference in the areas that we care about.

Exactly. We're one of the only countries in the world that offers that.

With the GoFundMes, I really do think a good rule of thumb is, do I know this person, right? Is there a level of trust? Trust really is the theme across both informal giving networks like GoFundMe, as well as giving to nonprofits. No one is saying you should go out and give to an untried and untested or someone you don't know or an organization that you're unfamiliar with.

We do say, do your homework. Definitely ask for the information. Ask the good questions and then give as generously as you can. And that trust piece really undergirds all of it.

maybe you set aside a small amount to do that. And that itself could be a whole strategy itself, where it's like, I would like to give to disasters in other places. I think that for me, and I think for many people, having a relationship with the communities and the causes that you care about can be a really important part of being an effective donor.

And so I would say maybe also have a giving that really connects you to your own community and causes that are close to your heart.

Exactly.

Yeah, I mean, this is geared a little bit more towards large institutional funders. Funders who are giving large amounts of money into different communities or nonprofits, it's actually really important that they listen well to what those folks need. And I think this is somewhat true also for smaller donors.

Like sometimes donors have a really clear idea of what they want to do, but there might be a disconnect between what they want to do and what is actually needed.

getting that feedback and what's so tricky about it is that communities and causes recognize that there's a power dynamic you're the one with the money and so they don't want to jeopardize the funding it might be really hard to say like actually what you're doing is not really what we need and so being the kind of donor who can be approached again that trust that we talked about earlier to say like actually i know you want to do this but can i also share about this need with you

And really learning and expanding your view of what is needed and what communities say is most important to them, I think is really key part of the journey.

And I think that the root of this is often that we see financial wealth as being the sum total of wealth generally. Actually, there's like many dimensions of wealth. So like poor communities, communities on the margins, they actually have a lot of wealth and assets, perhaps that are non-financial that we with the funds may actually lack.

And so I think we have to have a deep measure of humility when we go into communities or causes that we're somewhat distanced from and to say, actually, I have a lot to learn. I have money to give, but maybe I have something to gain too from the way they live their lives, what's important to them. It really is like a mutual kind of exchange and not just a one-way thing.

This is really the day-to-day experience of donors. I have a family member that has a rare genetic disease, and the only way that there's going to be treatment for that disease is that all the families have banded together to basically fund the research that it will take to bring about a cure. And that is true for any range of common diseases as well as rare ones.

So that's just like one small piece of it. In every community in the United States, there's community foundations. These are places where donors can come together and say, hey, actually, here are some of the needs in our community. How can we band together and address them?

That's a really powerful place that folks who might want to look more into, oh, what's going on with other people in our community? How can I join others? They should really look into that because, you know, like in business, you want to keep your business strategy to yourself because it's a competitive dynamic. In giving, you actually want to do the reverse.

If you're just doing it in a silo, you're probably not being very effective. You want to go out and see what are other people doing? Who can I join? What's my lane? I would really encourage donors to consider that.

It's so funny because this is an area that I'm actually personally trying to challenge myself with right now. And this is my job is that I have always waited until the end of the year to do my giving. And partially that's driven by tax reasons. But really, it's also there's no real reason why that's true. It's a habit. Maybe some of us, we have bonuses at the end of the year, that kind of thing.

You're right. Nonprofits are so reliant on that end of December opportunity. at least in the United States, kind of giving that it really is kind of feast or famine compared to the rest of the year. One of the things I'm trying to do is actually challenge myself not to wait until December.

And, you know, you may want to talk to nonprofits that you support because sometimes around Giving Tuesday, they have matches or they have other kind of interesting fundraising dynamics that may make your dollar go further. If you actually just email the nonprofit and say, hey, I kind of don't want to wait. Like, do you have anything like that now?

I guarantee you they will tell you what's open and available to you. And so they will welcome the earlier gift. Oftentimes I make that gift the very last few days of the year, but then the check doesn't arrive until the next year. You know, like that kind of thing. So it's like, why do I do this to myself?

I personally am also trying to just do it way earlier.

That is so important to nonprofits, that kind of ongoing operational support is really key.

that in the beginning, it's actually somewhat challenging to kind of get started. And maybe a lot of the listeners that you have are actually already giving in really thoughtful ways. I find that sometimes the real transformation of a donor actually happens after they start to give. It really is such a journey. And I hate that word because it's so trite, but it is a journey.

It is so different than being in business or medicine or law or any other field. And That part of you that's a donor, there's a whole set of skills and a whole set of blessings, actually, of just really cool things that can happen. Making space and recognizing that it is a journey and seeking to learn is really powerful and actually will make your money go much, much farther.

Thanks for having me.

I think that effectiveness really has many dimensions. One major dimension is, is the money that you are giving having its intended effect? Is it being well used by the nonprofit that you're giving it to?

And I think that here is an area where, without realizing it, donors actually pick up a lot of quote-unquote conventional wisdom that actually may not serve their goals very well in giving effectively. You want to be as generous as possible to nonprofits. You want to do your homework in advance. and then give so that you can kind of unleash the nonprofits to do their best work.

That means, you know, if you can, research nonprofits in advance. It's hard to make a really big gift to a group that you don't know very much about and you don't know whether their goals and strategies align with yours.

But the biggest one that we see is that donors really over focus on overhead administrative cost ratios of nonprofits. There's a sense in which nonprofits should have some sort of percentage of their operating costs that should be as low as possible. we think about it, I know where that comes from, but actually it doesn't really serve a nonprofit well, right?

You want to make sure a nonprofit has all the resources that it needs to attract the best talent, to have up-to-date systems, to be able to do their best work. And it's really hard to also just have one metric across multiple nonprofits, right? Like if you're comparing a school versus like a animal shelter, those numbers are going to be really different. So instead of

Looking at that one thing, because I think donors are often looking for like profit for a business. What is that one thing that I can look at that can just tell me whether a nonprofit is good or not? And I think that it requires a lot more nuance and a lot more education to say, no, there actually isn't one thing you have to really fully understand.

That's right. Every holiday season, I see a meme going around on social media with different nonprofit CEOs' pay levels. And the lowest CEO salary of this one organization was purported to be $13,000. And that was supposed to be a good thing. And I look at that and I'm like... How does someone survive on that? Exactly. Like, I'm not sure that that person is able to survive.

And I'm not sure that organization's attracting the best talent.

This is really the biggest question. And sometimes it's actually the hardest place to start. It's for someone to actually sit down and write down, what are my goals? And one of the challenges here is also just right-sizing your goals with how much money you can give. It's very tough to say, like, well, I would like to eradicate homelessness in my town, but I'm giving $1,000 a year.

That's not in line with the scope of the issue. Part of it is looking at how much do you want to give and what areas really touch your heart and your head first. Start close to you. Like, what are causes that mean a lot to you and your family? How were you helped along the way? And start from there. Like, find what's interesting and ask questions, talk to people, that kind of thing.

I think all are needed. You know, there really has been a big debate within philanthropy about whether or not you should always give, for instance, overseas. A lot of folks in the effective altruism movement would say that cost per life saved, dollar per life saved would actually be the most important metric. We don't believe that. And I don't believe that personally. I think that all are needed.

I think that if we believed that, we would never give into our own neighborhoods. We would never give to things that address like beauty and justice around us. And so I think it's an and and not one or the other.