Charitable Donations

Chuck Bean, executive director of the Nonprofit Roundtable of Greater Washington and Viki Betancourt, community outreach manager of the World Bank, were online Monday, Nov. 26, at Noon ET to discuss their report, "Beyond Charity: Recognizing Return on Investment" and answer questions about charitable donations this holiday season and the economic impact of nonprofit organizations in the Washington metropolitan region.

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Charities' Value to Economy: $9 Billion (Post, Nov. 26)

The transcript follows.

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Viki Betancourt: It's Viki online, and I'm looking forward to talking about the report with you.

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Chuck Bean: Happy post-Thanksgiving, everyone! Thanks to The Post for providing this forum. At this time of year there are a lot of "charity" stories in the media. We wanted to go beyond charity and demonstrate that the investing in the impact of nonprofits makes economic sense and is good public policy. I look forward to your questions and our discussion!

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washingtonpost.com: What steps would you advise readers to take in vetting charities before donating to them?

Chuck Bean: In terms of vetting nonprofit organizations, there are some existing tools out there. You could leverage the research done by others -- check out the Catalogue for Philanthropy or contact your local community foundation -- see cfncr.org, for example.

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Washington: The nonprofit sector in the region should now be viewed -- thanks to this great report -- as a proven stimulator of the economy, with impact on par with government and the hospitality industry. As such, don't you think it is time that media outlets like The Post begin to offer daily coverage and in-depth analysis of the sector, possibly on the business page?

Viki Betancourt: I couldn't agree more. One reason for getting this report done was to encourage local media to look for stories that tell the economic impact of local nonprofits. While we know the human side of the equation, and understand the enormous difference nonprofits make on people's lives, it is critical we also understand the economic benefit they bring to the community. Government leaders should take particular note of the efficiencies and cost savings, particularly during these cost-cutting times.

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Washington: I have a relative who gives donations to charities of their choice in my name, but does not provide a receipt that I can use on my taxes. Is it possible for me to contact the charity and get a receipt? I have my doubts these donations are real.

Viki Betancourt: If your relative gives his/her money to the charity, then that person receives the tax benefit, not you.

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washingtonpost.com: Can either of you discuss the methodology of the study? Has anyone in the government contested its findings regarding nonprofits' greater efficiency?

Chuck Bean: This has been a year-long process, and we began with the simple question: "What difference do nonprofits make?" We asked all of the 175 members of the Roundtable for their examples of impact and followed up on all independent research that they have done to show a return on investment or a cost-savings to society. One of my favorites was "Trickle Up: A Case Study on Community Benefits of Workforce Development" about the Training Futures job training program. It can be accessed here.

Regarding nonprofits' collaboration with government partners, we are explicit in the report that both government and nonprofits are needed to solve problems. Nonprofits can't replace government, but we're hoping to make more clear the benefits of investing in many services that nonprofits provide -- job training, community-based health care, child welfare services, the arts, and the environment.

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Designating money: I get direct mailers from Special Olympics, but when I donate I want to know my money will go to providing sports equipment for the athletes. Can I designate the direction of my donation? How can I follow up with Special Olympics to be sure that is where the money went? Thanks.

Viki Betancourt: Most organizations do in fact honor the wishes of their donors -- just make sure to send a letter with your donation specifically restricting the use of funds to your preferred purpose, and request confirmation of your request.

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washingtonpost.com: Do nonprofits disproportionately affect the Washington economy because of the number headquartered here, or do you think the findings of the study would apply to other metropolitan areas?

Chuck Bean: We are fortunate in our region to have so many national and international nonprofit organizations headquartered here. Some have called our region "The Nonprofit Capital." At our last count with the Urban Institute, there were 3,532 national or international nonprofits in our region. This adds a lot to our intellectual capital. I am particularly pleased that the District's deputy mayor for economic development, Neil Albert, has focused on the retention of these jobs in the nonprofit sector.

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Asheville, N.C.: In what ways do the nonprofits in the D.C. region contribute $9.6 billion dollars?

Chuck Bean: Nonprofits in our region employed more than 218,000 workers -- enough to fill several FedEx Fields! These employees generated approximately $9.6 billion in wages, or more than 10 percent of the region's total private sector.

For more details on the economics of the region's sector, check out this site -- with research from Johns Hopkins and the Urban Institute.

That said, the current report, Beyond Charity, focuses more on the return on investment from the impact of nonprofit organizations in our region.

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washingtonpost.com: Why did the World Bank choose to sponsor this study?

Viki Betancourt: We chose to sponsor this study because we believe a healthy mix of government agencies, private businesses and nonprofit organizations is the best way to address serious issues in our community. Through our work here locally, we know that there are nonprofits that are doing excellent, cutting edge work in different arenas (HIV/AIDS prevention for example) that clearly is providing a return on investment both in human terms and in economic terms. Working with the Nonprofit Roundtable was an easy choice -- they know this community and know nonprofits better than anyone.

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Bethesda, Md.: Very interesting, but now what? What are we supposed to do differently?

Viki Betancourt: We hope that the "what now" question will provoke further investment and research into the valuable work these organizations undertake every day -- for instance, an in-depth analysis of the cost savings provided by a clinic like Mary's Canter versus the cost of local hospitals providing free care to the uninsured.

Chuck Bean: I would add to Viki's comments: The Beyond Charity report shows the street-level expertise of nonprofit leaders. And, the "return on investment" model demonstrates that doing the right thing for our neighbors also makes economic sense. As leaders in our region come together to address regional challenges -- poverty, rapid growth and the cost of living, education, disaster preparedness -- we need to make sure that the expertise of nonprofit leaders are "at the table" with their business and government peers. When working together, everyone profits.

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Chevy Chase, Md.: So, if "both government and nonprofits are needed to solve problems," why the business lingo -- "return on investment"? And going back to a previous question, are the findings applicable to other communities?

Viki Betancourt: I do believe the findings are applicable to other communities -- a similar but less in-depth analysis in North Carolina provided very similar outcomes. In every community, nonprofits hire staff, rent or purchase office space and spend dollars locally -- that's one large similarity. In every community, there are nonprofits providing the same kind of efficiencies in their service delivery and providing an important impact on critical issues. So yes, I think the findings are applicable elsewhere.

As for the business lingo, generally, it is important to understand issues from multiple perspectives -- we wanted to ensure that the business community is made aware of the strong economic impact these organizations have on a community's bottom line.

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Anonymous: What benefits do you see for corporations invested in charitable giving of volunteer time as well as money?

Viki Betancourt: This is such an absolutely important part of charitable giving. First of all, the knowledge that corporations can bring to a nonprofit is huge -- most nonprofits rely heavily on their Board members to provide financial, legal and technical knowledge that they could not otherwise afford. In addition, the many hours spent by volunteers on projects are invaluable -- nonprofit staff may not be able to incorporate these projects because of their workloads and their client focus. Volunteers are such an important part of the life of a nonprofit.

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Washington: I'm still not entirely clear on the methodology. Did you add up the net benefit for each of the 175 members and get $9 billion?

Chuck Bean: The $9 billion figure is the total wages for all nonprofit employees in the region. That's a hard figure that The Post picked up on. Let's call that part of the "economic contribution." It is easier to count jobs and wages.

Our most recent study focuses more on "impact" -- the difference that nonprofits make -- which is even more interesting, but also harder to measure. Nonprofits include human services, health, education, the arts, environment -- these types are not just apples and oranges, but many other fruits in a great cornucopia. Also harder to nail down is the net benefit in the aggregate. (Similarly, could we add up "net benefit" of all local government services, such as paving the roads, police protection, trash collection, etc.?) We're pleased with this recent report, but this isn't the last word -- just a big first step.

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Silver Spring, Md.: I would like to know the impact of the various Catholic charities were included in this -- ranging from the St. Joseph House (for those with various disabilities) to the Catholic schools to various Catholic hospitals. For example, based on a cost of educating a child in Montgomery County of $10,000 per year, my child's elementary school saves the county/state more than $2.7 million per year. If Catholic schools and other institutions were not included, then what was the reason for it?

Viki Betancourt: All 501(c)(3)s in the metro region were included, so Catholic charities were included.

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Rockville, Md.: What percent of nonprofits in the Washington area serve the needs of the poor and vulnerable, in comparison to the number of arts groups and foundations related to political advocacy, etc.?

Chuck Bean: At our last count, there were 1,318 human services organizations in the region among those nonprofits with a local mission, along with 891 that focus on education. In the aggregate for the region, it's difficult to precisely identify those serving the needs of the poor and vulnerable.

In our count of local nonprofits, there were 540 arts and culture organizations.

We know that nonprofits are often the lifelines for our most vulnerable neighbors, now we're documenting the impact that nonprofits make and we're seeing how nonprofits raise the quality of life for all of us.

When a formerly homeless person gets a job, when a child is better prepared for school, when an elderly person can receive care at home -- these are all good outcomes for the individuals, but there is also a cost savings to society.

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Chuck Bean: Thanks everyone for your questions, and I'll look forward to the dialogue to come ... in the media, in chambers of commerce and with our government partners.

I wish everyone a happy holiday season. As I go, I'd add that "charity" has been defined as "generous actions or donations to the poor, ill, or helpless." Nonprofits are indeed charitable, but their impact also makes economic sense and is good public policy. As we give with our hearts, we can also invest with our heads.

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Viki Betancourt: Thanks very much to everyone for their insightful questions. This report shows that nonprofits save a community money by preventing and solving problems, both immediately and in the long term. They also can have a multiplier effect and greatly increase their impact because of their unique role -- we hope businesses, governments and community members join together to help solve many of our most pressing issues.

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