Is San Diego America’s most generous city?

Tuesday, August 8, 2017

By: Nancy Jamison and Emily Young

Have you ever looked closely at the words etched into the century-old County Administration Building? The phrase — “The noblest motive is the public good” — adorns the main facades, a motto that has ultimately fueled a true spirit of generosity across the region and most recently culminated in yet another accolade for San Diego — America’s Most Charitable City.

The annual Charitable Cities report by America’s largest charity evaluator, Charity Navigator, compared the median performance and size of the biggest nonprofits across the nation’s 30 largest metro markets with San Diego coming in first (up three spots from 2016). The rankings were determined by 21 metrics across three distinct rating dimensions of financial, accountability and transparency, and size.

Americans are generous, and this year particularly more so than others. Giving USA research showed that giving is up in all sectors for the first time in 40 years, from religious causes to the environment, animal welfare and education. But many organizations that play a vital role in ensuring the health and well-being of our communities still struggle to sustain their employees and day-to-day operations.

So how can we build on these positive giving trends and support a sustainable future for more than 10,000 nonprofit organizations across the San Diego region?

The first step is to dig a bit deeper into the Charity Navigator criteria, because while the giving trends are favorable, the metrics used are in fact flawed. They are based on the notion that the strongest charities are those that spend minimally on overhead while maximizing dollars to programs. We strongly believe that a more balanced approach focused on ROI (Return on Investment) and positive impact is a far better adjudicator of nonprofit practices.

For example, administrative expenses in the Charitable Cities Report reflect what percent of its total budget a charity spends on administrative staff and associated overhead. Dividing a charity’s average administrative expenses by its average total functional expenses yields this percentage, and the lower the number the more efficient the organization is purported to be. San Diego organizations come in at 9.5 percent.

However, while this focus on minimizing “overhead” is intended to promote organizational efficiency, it does not take into account the full costs incurred by many nonprofits to effectively support the causes and communities they serve.

This viewpoint does not necessarily mean we aren’t as philanthropic as the record reflects. Local research shows that the majority of San Diegans — 87 percent — have high confidence in the nonprofit sector to meet the community’s most pressing needs. Likewise, many San Diegans give their own time, talent and treasure to nonprofits — with 51 percent of San Diego households making monetary donations to charity in 2015 and 37 percent volunteering an average of 26 hours that year.

Yet gaps in nonprofit capacity and resources can leave the community with gaps in service occurring at a time when many nonprofit leaders report an increase in demand for their organization’s services and are confronting workforce development issues.

So how can we devise a holistic approach to philanthropy that starts with the end in mind? What are the outcomes we are looking to achieve and what does it really cost to deliver those outcomes?

A growing number of nonprofit and philanthropic leaders in San Diego County and elsewhere across the state and nation have identified the fact that many nonprofits operate with just enough funding in hand to operate for less than two months — a tenuous proposition for the long-term viability of these organizations and the communities they serve.

That’s why San Diego Grantmakers and The Nonprofit Institute at the University of San Diego have now launched phase 2 of the Full Cost Project, a statewide suite of groundbreaking trainings for both funders and nonprofits to support practical and big-picture cultural shifts needed to make this change. Instead of focusing on reducing nonprofit “overhead,” the Full Cost Project ( encourages a focus on outcomes and the role funders want their grant dollars to play in achieving those outcomes.

While the Giving USA and Charity Navigator data provides reason for optimism and pride, we must all continue to keep our energy up when it comes to supporting effective nonprofits. It is true that the noblest motive is the public good, but while mottos can be inspirational, our actions should reflect a genuine communitywide commitment to impactful service delivery, and that by changing the way we support nonprofits right now, we can fundamentally improve their ability to achieve our shared goals.

Nancy Jamison is president and CEO of San Diego Grantmakers. Emily Young is executive director of The Nonprofit Institute, University of San Diego.

This post was originally published by The San Diego Tribune. You can find the original post here.

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