The Retail Donor Perspective

Abstract

This chapter teases apart the information shortfalls in the philanthropy market for individual donors. Donors that want to use the CART principles to evaluate nonprofit organizations have little information to go on to do so. Few organizations put forward genuine measures of impact. And the rating information that is out there is often misleading. Retail donors are left to sway back and forth in the wake of informal impressions, nonprofit-driven public relations, isolated tales of success, and fortuitous personal connections. The chapter argues that existing nonprofit rating systems do not address the core problem since they typically focus on transparency, overhead, or other factors that may or may not be correlated to actual program impact. ImpactMatters, co-founded by Goldilocks co-author Dean Karlan, uses the CART principles to develop “impact audits” that evaluate nonprofits’ quality of impact evidence, cost to create impact, quality of monitoring systems, and extent of learning and iteration.