I think that Karnofsky’s post, as well as the above discussions, miss another important set of considerations for effectiveness (which only really apply to people giving over $100,000, but still):
1) Lowering fundraising and transaction costs for the charity: When a large donor agrees to stay with an organization for a long time, that organization can focus more on their programs and less on fundraising—when donors are constantly shifting from organization to organization, organizations are constantly being forced to spend valuable resources replacing them. In addition to fundraising costs, it’s also important to remember various transaction costs, such as reporting requirements (which you can work to streamline over a long-term engagement with a trusted organization).
2) Uncertainty for the capacity building: Keep in mind that helping build an organization’s capacity can have long-term impacts beyond just ‘# of bednets distributed’. When it comes to long-term donor relationships, it’s not just about revenue planning (which was mentioned above), but also about strategic planning. Lets say that your current largest donor is really interested in, say, monitoring and evaluation. If you know that that donor will stay around for a while, you can invest in your M&E capacity knowing that it will continue to be funded, but if that donor is going to switch to another organization in a year, how can you be sure that the next donor will fund you in a similar way? You might need to prepare to cut your M&E the instant you find a new donor.
3) Giving to learn isn’t just about building a network and learning about a cause, it’s also important to have deep relationships with an implementer: Shallow relationships only go so far, building a strong, ongoing relationship with an organization you trust can help you prioritize growth areas within that organization, and set both you and the organization up for successful experimentation and problem solving.
Caroline Fiennes of Giving Evidence (https://giving-evidence.com/) has a few other good reasons for focusing on building a long-term relationship with a small number of charities, but unfortunately I cannot find a consolidated blog post or article on this specific topic. Still, if you dig into her work, she does have a lot of interesting work on how the way in which people give (e.g. long vs. short term) has implications for the long-term effectiveness of charities. I would definitely recommend looking in to her work.
I think that Karnofsky’s post, as well as the above discussions, miss another important set of considerations for effectiveness (which only really apply to people giving over $100,000, but still):
1) Lowering fundraising and transaction costs for the charity: When a large donor agrees to stay with an organization for a long time, that organization can focus more on their programs and less on fundraising—when donors are constantly shifting from organization to organization, organizations are constantly being forced to spend valuable resources replacing them. In addition to fundraising costs, it’s also important to remember various transaction costs, such as reporting requirements (which you can work to streamline over a long-term engagement with a trusted organization).
2) Uncertainty for the capacity building: Keep in mind that helping build an organization’s capacity can have long-term impacts beyond just ‘# of bednets distributed’. When it comes to long-term donor relationships, it’s not just about revenue planning (which was mentioned above), but also about strategic planning. Lets say that your current largest donor is really interested in, say, monitoring and evaluation. If you know that that donor will stay around for a while, you can invest in your M&E capacity knowing that it will continue to be funded, but if that donor is going to switch to another organization in a year, how can you be sure that the next donor will fund you in a similar way? You might need to prepare to cut your M&E the instant you find a new donor.
3) Giving to learn isn’t just about building a network and learning about a cause, it’s also important to have deep relationships with an implementer: Shallow relationships only go so far, building a strong, ongoing relationship with an organization you trust can help you prioritize growth areas within that organization, and set both you and the organization up for successful experimentation and problem solving.
Caroline Fiennes of Giving Evidence (https://giving-evidence.com/) has a few other good reasons for focusing on building a long-term relationship with a small number of charities, but unfortunately I cannot find a consolidated blog post or article on this specific topic. Still, if you dig into her work, she does have a lot of interesting work on how the way in which people give (e.g. long vs. short term) has implications for the long-term effectiveness of charities. I would definitely recommend looking in to her work.
Thanks, these are great points. I think that 1) applies even for smaller donors.