Nonprofit watchdog organizations create a more efficient philanthropic marketplace by helping donors make informed decisions based on objective criteria. Or they would, if more people used them. “The watchdog organizations don’t reach most donors,” says Ram Cnaan, professor in the School of Social Policy & Practice at the University of Pennsylvania. “The majority of people have never heard of them, and if they’ve heard of them, they don’t know which one to look at.”
Only about one in five donors consults nonprofit watchdogs online. Cnaan found that being rich, computer savvy, highly educated, or engaged in volunteer work doesn’t make people any more likely to use them. “The vast majority of social investors and charitable givers really make their decisions predominantly on personal connections and emotional ties and things of that nature,” says Ken Berger, president and CEO of the watchdog Charity Navigator. “The whole movement toward using independent data is still in its infancy.” Also, for most of the more than 1 million US nonprofits, very little information is available.
Cnaan and colleagues analyzed data from the Donor Pulse, an online survey conducted by Harris Interactive. The poll asked respondents who had donated within the past year to check off the resources they used from a list consisting of GuideStar, Network for Good, Charity Navigator, the Better Business Bureau, the American Institute of Philanthropy, the organization’s own website, and “other.” The Better Business Bureau was the most frequently consulted of the group, at 40 percent, followed by Charity Navigator at 12 percent.
Two kinds of donors did seek out independent evaluations more often: people who were giving more money and people who were engaged in advocacy. “If you donate $50, you know you don’t have much impact on the organization,” says Cnaan. “But if you donate $10,000, you want to see that your money is not wasted.” Cnaan was more surprised by the scrutiny of the activists, who he supposes are more suspicious and less accepting of authority than the average donor.
One reason people may neglect watchdogs is an implicit trust of nonprofits. Another is that it’s too much trouble: To use a watchdog to choose a nonprofit, you first have to choose a watchdog. There are competing methods of assessment and “some nonprofits are considered a safe bet by one organization and not by another,” says Cnaan. Also, donors are often just motivated by the warm glow of giving, not by assessment.
Watchdog organizations have control over at least one aspect—no one will consult a service they don’t know exists. “All of us who are concerned about providing third-party information have an obligation to continue to educate and encourage people as to the importance of doing so,” says Berger. Cnaan agrees: “Donors should know that they have an option.”