Austerity Measurement: The Grim Future Of Charity

—by , November 24, 2010

One look into Jimmy Wales’ creepy eyes on any page of the Wikipedia and an overlooked side effect of the world’s pursestrings’ drawing becomes painfully clear.

You’re not donating as much as you used to.

Well, maybe you are. Jimmy’s not trying to single anyone out. But it could be that you’re not. Or we’re not. Many are financially ruined, underwater on their mortgages, or just flat out of work. And even the steadily employed look over their shoulders when talks of budgets arise, and Americans now keep an eye on their spending more so than perhaps their entire lives. Frugality has become a worldwide obsession among governments, businesses and individuals, and while many in the world’s most charitable country still donate with stunning regularity, overall, donations are down.

In some cases, way down. The top 400 US charities reported an 11 percent drop in donations in 2009, and overall, charitable giving was down 3.6 percent. It’s the second time that the nation’s charitable donations fell from the previous year since the late 1950s. Even in 2008, far from a banner year for the economy, charitable giving beat expectations.

The earthquake in Haiti and the floods in Pakistan put on display the realities of giving in 2010. While the opening of pocketbooks for Haiti was immediate (text message donations were being sent at a rate of $200,000 per hour), Pakistan’s floods didn’t get nearly the same amount of financial support. There was a vast amount of speculation as to why. Are floods less gripping than earthquakes? Did not enough people know there were floods in Pakistan? If they did, did it not seem like an emergency?

Perhaps a little of all those factors were involved, but the reality is that Pakistan is mentioned in the same breath as terrorism in today’s media environment, and that’s a tough sell for donors.

But maybe there’s something like too much money. The overwhelming majority of giving for the Haiti disaster went to NGOs which have made the central government increasingly weakened over the last decade and functionally irrelevant over the last few months. Almost half a billion dollars flooded into the country of 10 million citizens, of which under 2 million were affected directly by the disaster. And despite the grim statistics on the recent outbreak of cholera in Haiti, aid workers have made tremendous strides in keeping down the body count, with a 1 in 15 mortality rate from a disease that can cause death in hours.

US aid to Pakistan, however, was barely more than $10 million in response to the flooding, during which at one point 20 percent of the entire country was underwater. To compare that to the United States, it would be like if California, Oregon, Washington state, Arizona, Nevada and Idaho were underwater. An estimated 20 million people were affected, almost 10 times that of Haiti, and yet the disasters didn’t raise a tenth of what the Haitian disaster did. Not even close.

The lingering media portrayal of Pakistan as an outpost for terrorism was the bad seed that led to weak support and the lack of media attention in general. The Haitian earthquake was in the US media’s backyard. We were on top of it from the very beginning, with telethons, benefit concerts and massive giving campaigns, in supermarkets and on your cellphone.

Pakistan’s floods had no face, no oiled pelican, no collapsed Presidential palace. There was just a message: Help! We’ve got a flood!

Not good enough.

Who else is learning this? Wikipedia.

Wikipedia and its associated arms traditionally used some text-based message or maybe even the homegrown-style “thermometer” to gauge how close they were to raising their budget. This year, they’ve gone with Mr. Wales right up front, looking at you with this “you know better” face. Why?

Well, why does anything happen these days? It fared better in market testing.

Wikipedia ran 14 rounds of tests with different messages (across a number of languages) and tracked each one with the click-throughs, total donations, average donations, etc. The personal appeal of Jimmy Wales outperformed all of the other messages by a factor of five.

It’s the old news meeting trope. We’ve got to put a face on the story. Don’t have a crisis without one.

    reader responses
  1. The “five times” better factor for Jimmy Wales’ appeal is very misleading. Jimmy’s ad was the only one that contained a visual image — the others were just plain text. If one of the competing ads was a bikini-clad model, it would have far outperformed vapid Jimbo.

    But that’s all beside the point.

    The point is that the Wikimedia Foundation is gouging the public’s goodwill. According to an audit by KPMG, the Wikipedia project actually costs only about $2.5 million to run. But the WMF is asking for $20 million. Why is that?

    It is why Charity Navigator awarded the WMF only one star (out of four!) in terms of organizational efficiency — because the tax-exempt non-profit is only spending 41 cents of every received dollar on program services that the charitable mission is intended to fulfill.

    Most people can detect a scam when they know the facts. The real problem is that the WMF is deliberately covering up the facts, so that Sue Gardner and Jimmy Wales can keep their ever-growing favors racket in business.

    Gregory Kohs on 11/25/2010 at 10:59 PM 

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