Latest / After the Rush Podcast / How I Choose Where My Money Actually Goes

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How I Choose Where My Money Actually Goes · After the Rush Podcast

• 0:00
  SPEAKER_00: Last December,
• 0:01
  SPEAKER_00: I sat at my kitchen table with 14 appeal letters spread out in front of me like
• 0:06
  SPEAKER_00: a losing hand of solitaire,
• 0:08
  SPEAKER_00: a photograph of a child in a doorway,
• 0:11
  SPEAKER_00: a golden retriever wearing a service vest,
• 0:14
  SPEAKER_00: a note in blue ink that looked handwritten until you noticed all 14 envelopes had
• 0:19
  SPEAKER_00: the exact same handwriting.
• 0:22
  SPEAKER_00: My checkbook was open.
• 0:24
  SPEAKER_00: My pen was uncapped.
• 0:26
  SPEAKER_00: I did not write a single check for 11 days.
• 0:29
  SPEAKER_00: That stopped me because I am not someone who freezes up about money.
• 0:34
  SPEAKER_00: I have built organizational budgets in the high six figures.
• 0:39
  SPEAKER_00: I have signed off on grants that paid staff salaries and rent and the electric bill
• 0:44
  SPEAKER_00: for a nonprofit I founded myself.
• 0:47
  SPEAKER_00: I know what a balance sheet is supposed to tell you and what it's hiding.
• 0:53
  SPEAKER_00: And still,
• 0:54
  SPEAKER_00: that pile of envelopes sat there for almost two weeks because somewhere in
• 0:58
  SPEAKER_00: the last 30 years,
• 1:00
  SPEAKER_00: I had lost track of how I actually decide where my money goes when someone else is
• 1:05
  SPEAKER_00: the one asking.
• 1:07
  SPEAKER_00: This is an episode about that,
• 1:10
  SPEAKER_00: about how I choose where to give now that I've sat on both sides of that envelope,
• 1:15
  SPEAKER_00: the one asking and the one deciding,
• 1:18
  SPEAKER_00: and about what it actually means to give with integrity When integrity is
• 1:23
  SPEAKER_00: a word every appeal letter uses and almost none of them define.
• 1:32
  SPEAKER_00: Welcome to After the Rush.
• 1:34
  SPEAKER_00: I'm Catherine McDowell.
• 1:35
  SPEAKER_00: This is a show about designing the chapter after the one that made you who you are.
• 1:41
  SPEAKER_00: Told by someone who is building hers in real time.
• 1:44
  SPEAKER_00: Not someone who already finished.
• 1:46
  SPEAKER_00: If this is your first episode, you're not behind.
• 1:50
  SPEAKER_00: Start here.
• 1:51
  SPEAKER_00: Nothing before this one is required reading.
• 1:58
  SPEAKER_00: Here is what nobody explains to you about appeal letters.
• 2:01
  SPEAKER_00: I know, because for a decade I wrote them.
• 2:05
  SPEAKER_00: They are built on a very specific piece of psychology,
• 2:08
  SPEAKER_00: and it works, which is why it hasn't changed in 50 years.
• 2:13
  SPEAKER_00: A photograph,
• 2:14
  SPEAKER_00: close-up,
• 2:15
  SPEAKER_00: usually a child or an animal,
• 2:18
  SPEAKER_00: something that bypasses the part of your brain that asks questions.
• 2:22
  SPEAKER_00: A deadline that isn't really a deadline.
• 2:25
  SPEAKER_00: Your gift will be matched, but only until December 31st.
• 2:31
  SPEAKER_00: A dollar figure that sounds precise enough to be true.
• 2:36
  SPEAKER_00: Just $22 provides a week of meals.
• 2:39
  SPEAKER_00: I have written that sentence.
• 2:41
  SPEAKER_00: I have workshopped that sentence with a board of directors who argued for 40 minutes
• 2:46
  SPEAKER_00: about whether $22 sounded more trustworthy than $25.
• 2:52
  SPEAKER_00: None of that makes the organization dishonest.
• 2:55
  SPEAKER_00: I want to be clear about that,
• 2:57
  SPEAKER_00: because it would be easy for this episode to turn into a takedown,
• 3:01
  SPEAKER_00: and that's not what I'm doing.
• 3:03
  SPEAKER_00: Fundraising is hard,
• 3:05
  SPEAKER_00: unglamorous work,
• 3:07
  SPEAKER_00: and the people who do it are almost always underpaid for how much they carry.
• 3:11
  SPEAKER_00: I was one of them.
• 3:13
  SPEAKER_00: I know what it costs to keep the lights on for a mission you believe in
• 3:17
  SPEAKER_00: And I know how many nights you spend writing a version of the same letter,
• 3:21
  SPEAKER_00: trying to find the sentence that gets someone to stop scrolling and actually reach
• 3:25
  SPEAKER_00: for a pen.
• 3:27
  SPEAKER_00: But knowing how the letter is built changes how you read it.
• 3:31
  SPEAKER_00: And most of us have never been taught to read it any differently than we did
• 3:35
  SPEAKER_00: the first time, at 25, when a photograph of a child was enough.
• 3:41
  SPEAKER_00: So the pattern most people fall into,
• 3:44
  SPEAKER_00: the one I fell into for years without noticing, is what I'd call mail-pile giving.
• 3:50
  SPEAKER_00: You give to whoever asked most recently,
• 3:53
  SPEAKER_00: or most movingly, or right before a tax deadline you'd mostly forgotten about.
• 3:59
  SPEAKER_00: It isn't reckless.
• 4:00
  SPEAKER_00: It's just reactive.
• 4:02
  SPEAKER_00: And reactive giving at scale over a lifetime adds up to a giving history
• 4:08
  SPEAKER_00: That reflects who is good at asking,
• 4:11
  SPEAKER_00: rather than what you actually believe deserves your money.
• 4:15
  SPEAKER_00: I did the math on myself once, a few years ago, out of curiosity more than concern.
• 4:21
  SPEAKER_00: I pulled a year of bank statements and counted every charitable gift I'd made.
• 4:26
  SPEAKER_00: 18 organizations.
• 4:28
  SPEAKER_00: Most gifts were under $100.
• 4:31
  SPEAKER_00: I could tell you what pulled at me in the moment for maybe 6 of the 18.
• 4:37
  SPEAKER_00: The other 12 I genuinely could not have named at a dinner party
• 4:41
  SPEAKER_00: if you'd asked me what they did or why I'd chosen them.
• 4:45
  SPEAKER_00: That's not generosity.
• 4:47
  SPEAKER_00: That's static.
• 4:48
  SPEAKER_00: It's the financial equivalent of a junk drawer.
• 4:51
  SPEAKER_00: And I had built it one thoughtful sounding envelope at a time.
• 4:58
  SPEAKER_00: For a long time,
• 4:59
  SPEAKER_00: if you wanted to know whether a nonprofit was legitimate,
• 5:02
  SPEAKER_00: someone would tell you to check the overhead ratio.
• 5:06
  SPEAKER_00: What percentage of the budget goes to programs versus what percentage goes
• 5:10
  SPEAKER_00: to salaries, rent, and fundraising itself?
• 5:14
  SPEAKER_00: Low overhead meant good.
• 5:16
  SPEAKER_00: High overhead meant something to be suspicious of.
• 5:20
  SPEAKER_00: I believed this too for years before I sat on the other side of it.
• 5:26
  SPEAKER_00: Here's what I want to be careful about,
• 5:28
  SPEAKER_00: because this is the kind of claim that's easy to overstate.
• 5:32
  SPEAKER_00: In June of 2013,
• 5:33
  SPEAKER_00: the three biggest charity watchdog organizations in the country,
• 5:38
  SPEAKER_00: GuideStar,
• 5:39
  SPEAKER_00: Charity Navigator,
• 5:41
  SPEAKER_00: and the BBB Wise Giving Alliance,
• 5:44
  SPEAKER_00: the very groups whose reputations were built on rating that number,
• 5:49
  SPEAKER_00: published something together called the Overhead Myth.
• 5:53
  SPEAKER_00: It wasn't a study with a dramatic headline result.
• 5:56
  SPEAKER_00: It was closer to a correction.
• 5:59
  SPEAKER_00: They said,
• 5:59
  SPEAKER_00: in effect,
• 6:00
  SPEAKER_00: that overhead ratio alone is a poor way to judge whether
• 6:04
  SPEAKER_00: a nonprofit is doing its job well,
• 6:07
  SPEAKER_00: because overhead includes the training,
• 6:10
  SPEAKER_00: the planning, the evaluation, and the systems that make the actual program work.
• 6:16
  SPEAKER_00: Starve an organization of that, and you don't get a leaner charity.
• 6:21
  SPEAKER_00: You get a charity that can't tell if what it's doing is working.
• 6:26
  SPEAKER_00: I had a version of this play out in my own nonprofit.
• 6:29
  SPEAKER_00: We ran a financial literacy program for women coming out of situations
• 6:33
  SPEAKER_00: with no credit history,
• 6:35
  SPEAKER_00: sometimes no bank account, sometimes nothing but a lease they couldn't read.
• 6:39
  SPEAKER_00: It worked.
• 6:41
  SPEAKER_00: Not perfectly.
• 6:42
  SPEAKER_00: Nothing does.
• 6:43
  SPEAKER_00: But it worked well enough that we could show you outcomes, not just feelings.
• 6:48
  SPEAKER_00: And one year,
• 6:50
  SPEAKER_00: a donor who had given us a meaningful gift for three years running pulled out,
• 6:55
  SPEAKER_00: not because a client had a bad experience,
• 6:58
  SPEAKER_00: not because the money was mismanaged,
• 7:01
  SPEAKER_00: because she'd looked at our Form 990 and seen
• 7:04
  SPEAKER_00: that our administrative costs had ticked up two percentage points from the year
• 7:09
  SPEAKER_00: before and decided that meant we'd gotten sloppy.
• 7:14
  SPEAKER_00: What had actually happened is that we'd hired a part-time evaluator,
• 7:18
  SPEAKER_00: someone whose entire job was to make sure
• 7:21
  SPEAKER_00: the program was doing what we said it was doing.
• 7:24
  SPEAKER_00: The number that scared her off was the number that meant we were finally checking our own work.
• 7:30
  SPEAKER_00: I did not get her back that year.
• 7:32
  SPEAKER_00: I did get a much better data collection system out of it,
• 7:35
  SPEAKER_00: so I suppose there's a version of this story where everybody wins,
• 7:38
  SPEAKER_00: several years later, after I stopped being annoyed.
• 7:42
  SPEAKER_00: Here's the part I think is actually useful, beyond my own story.
• 7:47
  SPEAKER_00: A Form 990 is public.
• 7:51
  SPEAKER_00: Any nonprofit that isn't a church has to file one,
• 7:55
  SPEAKER_00: and any donor can pull one up in a few minutes, usually free.
• 8:00
  SPEAKER_00: Through a couple of well-known nonprofit databases.
• 8:04
  SPEAKER_00: Most people never look.
• 8:06
  SPEAKER_00: I understand why.
• 8:08
  SPEAKER_00: It reads like a tax form, because it is one.
• 8:12
  SPEAKER_00: But you don't need to understand every line.
• 8:15
  SPEAKER_00: You need three things off the front page.
• 8:18
  SPEAKER_00: How much the top staff are paid,
• 8:21
  SPEAKER_00: relative to the size of the budget,
• 8:23
  SPEAKER_00: which tells you whether compensation is reasonable or alarming in either direction.
• 8:29
  SPEAKER_00: Whether the organization describes specific program accomplishments
• 8:34
  SPEAKER_00: in its own words,
• 8:35
  SPEAKER_00: in the section built for exactly that,
• 8:38
  SPEAKER_00: or whether it left that section thin,
• 8:40
  SPEAKER_00: and whether the same few names have controlled the board for a decade,
• 8:44
  SPEAKER_00: which isn't automatically a problem, but is worth noticing.
• 8:49
  SPEAKER_00: None of that requires a finance background.
• 8:52
  SPEAKER_00: It requires 10 minutes and the willingness to actually read past the cover page.
• 9:01
  SPEAKER_00: So if overhead percentage isn't the number, what is?
• 9:06
  SPEAKER_00: I want to be honest that there isn't one clean number.
• 9:09
  SPEAKER_00: Anyone who tells you there's a single metric that separates a good nonprofit from
• 9:14
  SPEAKER_00: a bad one is selling you something,
• 9:17
  SPEAKER_00: usually a rating system, with their own logo on it.
• 9:21
  SPEAKER_00: What I can tell you is what I actually ask now,
• 9:24
  SPEAKER_00: the questions I bring from the side of the desk where the decisions get made.
• 9:29
  SPEAKER_00: First, can they tell me a specific story with a number attached to it,
• 9:34
  SPEAKER_00: not, we served 3,000 families.
• 9:39
  SPEAKER_00: A specific story.
• 9:42
  SPEAKER_00: How many people finished the program, what changed for them, and how they know.
• 9:48
  SPEAKER_00: If a program officer can't give you one real example without checking a script,
• 9:54
  SPEAKER_00: that tells you something about how closely anyone is actually watching the work.
• 9:59
  SPEAKER_00: Second, what happens when the money runs out?
• 10:03
  SPEAKER_00: Every program has a version of this.
• 10:05
  SPEAKER_00: Ask what the plan is for year three,
• 10:08
  SPEAKER_00: for the grant that ends, for the founder who eventually leaves.
• 10:13
  SPEAKER_00: Organizations that have thought about their own fragility tend to be more honest
• 10:18
  SPEAKER_00: about their own limitations.
• 10:20
  SPEAKER_00: And I trust honesty about limitations more than I trust confidence.
• 10:26
  SPEAKER_00: Third, and this one took me the longest to learn to ask,
• 10:30
  SPEAKER_00: who is in the room when decisions get made?
• 10:34
  SPEAKER_00: Not just the board list on the website.
• 10:36
  SPEAKER_00: Who is actually at the table when the organization decides what success looks like?
• 10:42
  SPEAKER_00: An organization serving a community that has no one from that community in
• 10:48
  SPEAKER_00: a decision-making seat is a different kind of organization than one that does,
• 10:53
  SPEAKER_00: even if the mission statement reads the same.
• 10:56
  SPEAKER_00: None of these questions take more than one phone call to ask.
• 11:00
  SPEAKER_00: That's the part people don't expect.
• 11:03
  SPEAKER_00: You don't need an accounting degree.
• 11:06
  SPEAKER_00: You need to be willing to ask a direct question and actually listen to the answer,
• 11:12
  SPEAKER_00: including the parts of the answer that are uncomfortable.
• 11:19
  SPEAKER_00: I went from 18 organizations to five.
• 11:22
  SPEAKER_00: That's not a rule I'd hand anyone.
• 11:24
  SPEAKER_00: It's just what happened once I started asking the questions instead of responding to
• 11:29
  SPEAKER_00: the envelopes.
• 11:31
  SPEAKER_00: The five I give to now, I could describe each one's work to you in detail.
• 11:36
  SPEAKER_00: Because I've asked,
• 11:38
  SPEAKER_00: and because in two cases I've toured, the actual building where the work happens.
• 11:45
  SPEAKER_00: I know one program director by name and have her direct line, not the general office number.
• 11:51
  SPEAKER_00: I've watched one organization's outcome shift over three years of giving,
• 11:56
  SPEAKER_00: which you cannot do if you give once and move to the next envelope
• 12:01
  SPEAKER_00: the following December.
• 12:03
  SPEAKER_00: Depth, it turns out, requires staying somewhere long enough to see whether it changes.
• 12:10
  SPEAKER_00: I still get the appeal letters.
• 12:12
  SPEAKER_00: All 18 organizations, plus a few dozen I've never given to at all, still have my address.
• 12:19
  SPEAKER_00: I don't feel guilty throwing most of them away now, which surprised me.
• 12:24
  SPEAKER_00: I used to feel that every unanswered envelope was a small failure of character.
• 12:29
  SPEAKER_00: It isn't.
• 12:31
  SPEAKER_00: It's just mail.
• 12:32
  SPEAKER_00: The failure of character,
• 12:34
  SPEAKER_00: if there is one,
• 12:35
  SPEAKER_00: would be writing checks I never think about again
• 12:37
  SPEAKER_00: to organizations I couldn't describe,
• 12:40
  SPEAKER_00: purely so the guilt would stop for one afternoon.
• 12:47
  SPEAKER_00: I want to name something because I can feel where this episode wants to go,
• 12:52
  SPEAKER_00: and I don't trust the direction.
• 12:54
  SPEAKER_00: It would be easy to turn this into a story about becoming a philanthropist.
• 12:59
  SPEAKER_00: Reinventing yourself in this chapter as someone with a giving strategy and
• 13:04
  SPEAKER_00: a foundation and a wing named after you somewhere.
• 13:08
  SPEAKER_00: I'm not building that.
• 13:10
  SPEAKER_00: I'd guess you're not either.
• 13:14
  SPEAKER_00: And I think the reinvention version of this conversation,
• 13:18
  SPEAKER_00: the one that shows up in glossy retirement magazines,
• 13:21
  SPEAKER_00: does something a little dishonest.
• 13:24
  SPEAKER_00: It suggests you need to become a different kind of person to give well.
• 13:28
  SPEAKER_00: Learn a new vocabulary.
• 13:30
  SPEAKER_00: Adopt a new identity.
• 13:32
  SPEAKER_00: Philanthropist with a capital P.
• 13:36
  SPEAKER_00: I don't think that's true,
• 13:38
  SPEAKER_00: and I think it's actually a little insulting to what you already know.
• 13:43
  SPEAKER_00: I know how to read a budget.
• 13:44
  SPEAKER_00: I spent years doing it professionally.
• 13:47
  SPEAKER_00: I know what a proposal is supposed to promise and what it usually can't deliver,
• 13:52
  SPEAKER_00: because I wrote plenty of those promises myself and watched which ones held up.
• 13:58
  SPEAKER_00: I know how to ask a board a hard question without making it personal,
• 14:02
  SPEAKER_00: because I sat on both sides of that table, too.
• 14:06
  SPEAKER_00: I am not reinventing myself into a donor.
• 14:09
  SPEAKER_00: I am designing a giving practice out of the person I already spent 40 years becoming.
• 14:15
  SPEAKER_00: That's a smaller task than reinvention, and it's a truer one.
• 14:20
  SPEAKER_00: You don't need a new self to give well.
• 14:22
  SPEAKER_00: You need to bring the self you already built to the checkbook,
• 14:26
  SPEAKER_00: on purpose, instead of leaving it in the mail pile with the pen still uncapped.
• 14:35
  SPEAKER_00: Here's what I'd actually suggest, and it's small enough to do this week.
• 14:40
  SPEAKER_00: Pick one organization already sitting somewhere in your life.
• 14:44
  SPEAKER_00: Not from the pile of envelopes.
• 14:46
  SPEAKER_00: One you've already touched, even briefly.
• 14:50
  SPEAKER_00: The food pantry near your church.
• 14:52
  SPEAKER_00: The community college where a scholarship fund carries your granddaughter's name on
• 14:56
  SPEAKER_00: a plaque somewhere.
• 14:58
  SPEAKER_00: The shelter where your daughter volunteers on Saturday mornings.
• 15:02
  SPEAKER_00: Call them.
• 15:03
  SPEAKER_00: Not to give yet.
• 15:05
  SPEAKER_00: Just call and ask the person who answers one question.
• 15:10
  SPEAKER_00: What did you use the last gift you received for?
• 15:14
  SPEAKER_00: And how do you know it worked?
• 15:16
  SPEAKER_00: Listen to how they answer,
• 15:18
  SPEAKER_00: whether they have a real story ready or whether they reach for a brochure.
• 15:23
  SPEAKER_00: That's data, too, and it's better data than anything printed on an envelope.
• 15:29
  SPEAKER_00: I still have that stack from last December somewhere in a kitchen drawer.
• 15:33
  SPEAKER_00: Fourteen envelopes, most of them unopened past the first paragraph.
• 15:39
  SPEAKER_00: There will probably be a new stack this year,
• 15:42
  SPEAKER_00: but there's one envelope I already know I'm going to open first because I made
• 15:47
  SPEAKER_00: the call ahead of time and I already know what they'll say.
• 15:51
  SPEAKER_00: That, more than any percentage on any form, is the giving I've actually come to believe in.
• 16:01
  SPEAKER_00: That's this episode of After the Rush.
• 16:04
  SPEAKER_00: If it was useful,
• 16:05
  SPEAKER_00: the most helpful thing you can do is share it with the one person you thought of
• 16:09
  SPEAKER_00: while listening, the one who's also sitting on a stack of envelopes somewhere.
• 16:14
  SPEAKER_00: You can subscribe to get new episodes and essays as they come out,
• 16:19
  SPEAKER_00: and you'll find related reading on money and identity along with everything else
• 16:25
  SPEAKER_00: at aftertherush.store.
• 16:28
  SPEAKER_00: A quick note,
• 16:30
  SPEAKER_00: since this episode touches money,
• 16:32
  SPEAKER_00: I'm not a licensed financial planner and nothing here is financial or tax advice.
• 16:38
  SPEAKER_00: What I've offered is the perspective of someone who has sat on both sides of
• 16:43
  SPEAKER_00: the nonprofit desk and who believes money is never only about money.
• 16:48
  SPEAKER_00: Talk to your own tax professional about how charitable giving fits your specific situation.
• 16:54
  SPEAKER_00: I'm Catherine McDowell.
• 16:55
  SPEAKER_00: This has been After the Rush.