I get a regular email from HBS Working Knowledge, and today's email had a very interesting article in it. The article was called Trusth in Giving: Experimental Evidence on the Welfare Effects of Informed Giving to the Poor. Professor Felix Oberholzer-Gee is doing research with Christina Fong to study whether people give more when they understand the plight of the person they are giving to. They try to answer the questions about how giving changes based on the context of the group being helped. Would you give more or less money to individuals who are poor because of circumstances they control (gambling or drug problems) or circumstances out of their control (children or economically devistated region). His research is interesting.

Here is a link to the absract. The paper brings up some interesting key concepts:

• It is important to produce credible signals about deservedness that are hard to ignore.
• A group of donors are willing to invest resources to better match their preferences.
• Making a good case about a deserving person leads to increased donations to the poor.

Of course my summary does not do this paper justice, but it got me thinking about how nonprofits and NGOs could do a better job fundraising. So let me manipulate this article to my worldview. Nonprofits and NGOs must clearly communicate their Theory of Change and their target audience as well as how they are making an impact. They need to use logic models to show that the activities and programs they are undertaking are impacting key constituents and improving their lives. These compelling cases will allow them to ask for and receive larger donations from their funders.

A Balanced Scorecard is just the logic model that will meet their needs. Show how investing in capacity will improve program execution and thus meet particular constituent needs to deliver on the overall impact of the mission. That is exactly what a Balanced Scorecard does. Put measures behind this logic model and you can begin to drive behavior within your nonprofit to achieve results. The measures can be communicated to your board and donors to demonstrate outcomes and impact.

Of course, from the second bullet, we can see that some donors might be willing to pay a nonprofit to build this logic model to show how they are serving a "deserving" constituency. Well, I think you will enjoy the article and the other findings are very interesting as well. Tell me what you think.

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