Ten Principles of International Giving

The Smart Donor’s Guide to Success

With the controversies over Greg Mortenson’s “Three Cups of Tea” and the Central Asia Institute, along with Madonna’s failed girls’ school in Malawi, people are questioning why charities fail and what we can do to ensure that philanthropy achieves the best possible results.

We’ve developed the following guide to highlight effective strategies for international philanthropy.

1. Donor Intent versus Donor Responsibility

You, as the donor, have a right to pursue your philanthropic passion and give where your heart leads you! You also have a responsibility to the people you can help to ensure that your investment is used efficiently and effectively as possible.

2. Transparency

A responsible philanthropic intermediary or charitable organization should provide clear, honest and timely reporting back to the donor as to the success or failure of the project. We all benefit, if all involved parties (donors, nonprofit leadership, and beneficiaries of the program), have the opportunity to reflect and share what worked, what didn’t, and what steps can be taken to improve results.

3. Good Due Diligence

Look for leadership quality and track record, for good project design and well founded assumptions in the project plan. Look at the external risks to the project. Before making a grant, clearly articulate the risks as well as the potential rewards of the program.

4. Performance Indicators

Insist on very clear target measures of performance. This should include the normal activity measures and impact, or long-term outcome, measures if possible. If this is not possible then find a proxy for the impact you seek. The key measures need to be on the written agreement with the implementing organization you are funding.

5. Work with Local Organizations

Grass-roots, local organizations almost always provide the greatest results for the lowest cost. This is good development – in terms of results and sustainability. Despite the best of intentions, larger, international organizations come and go, sometimes with programs inappropriate for the local context. Bottom line: You usually get the best philanthropic value from well-run, local organizations.

6. The Good and the Great

Look for giving opportunities that will both achieve individual transformation and trigger an accelerating factor that will bring systemic change.

7. Donor Collaboration

There is too much fragmentation in the charity sector; too many donors work alone rather than in partnership with others. Seek to collaborate with other donors (e.g. a co-investment strategy or a community of donors) in order to achieve scale and synergistic impact.

8. Active Portfolio Management

Never put good capital into bad projects. Once you realize the project is poorly run or not meeting target measures of performance, then stop funding, reduce funding, or demand a change in the project’s implementation.

9. Length of Funding

Try to fund a project for as long as sensible. Usually this should be for a minimum 3 year period with annual disbursements based on successful performance reporting in the previous year. The longer you fund, usually the higher the proportion of funding goes to the program activities and the higher the long-term impact.

10. Scale and Sustainability

Make grants to programs that offer both scale and sustainability. A program that achieves “scale” is one that not only transforms individual lives but also changes the greater community or society. A program is “sustainable” when it tackles the root causes of a problem and achieves long-term impact. This may include catalyzing a paradigm shift in community thinking, developing new ways to resolve conflicts, or helping communities to find a voice and solve their own problems, or building the capacity of local leadership.