“The lesson here is most people are fundamentally good,” [Panera founder and Chairman Ronald] Shaich said. “People step up and they do the right thing.”

The “right thing,” in this case, is choosing to pay the full retail price (or more) for a bagel at one of Panera Bread’s pay-what-you-want restaurants. These locations are nonprofit, and “prices” are actually just suggested donations. Any money left over after paying the utility bills and workers’ salaries (i.e. overhead) goes to Panera’s charitable foundation.

This is genius for two reasons:

1. Amazing PR for Panera

2. Combining hunger and peer pressure to make people donate to your charity

Seems like it’s getting easier every day to spend money. Is this the new philanthropy? Are $10 text donations just the start? Anything that gets people to donate more money to good organizations is progress in our book.

You have to wonder, though. Is this kind of giving the way you really want to spend your donation dollars? Impulse giving is kind of like impulse shopping – it will probably make you feel good about yourself at the moment (especially if you just ate a delicious sandwich), but it doesn’t usually reflect who you are or where your values lie.

And it definitely goes against the sage advice to do your homework before you give someone your money.

“People like to read the books,” says Daniel Borochoff, president and founder of the American Institute of Philanthropy in Chicago. “But the expense statement tells a story, too. Not as entertaining, but perhaps just as revealing.”

This seems like an appropriate follow-up to yesterday’s post about operational costs… A prominent organization dedicated to building schools and increasing access to education in Afghanistan – the Central Asia Institute – has recently gotten some bad press about its alleged money mismanagement.

Well, not money mismanagement exactly… more like financial nondisclosure. State auditors, donors, and charity ratings organizations have been surprised to find that more than half the CAI’s annual budget was spent in the U.S. instead of being sent overseas to pay for bricks and pencils.

Now, no one’s being accused of embezzlement – but it does seem like, at the very least, the organization’s finances were pretty incompetently handled. This is a great example of why it’s so important to do your homework before you give. Most charities are required to make their financial statements public, and you can use sites like GuideStar.org to help you get a better picture of where a nonprofit’s money is really being spent.

It’s also a pretty good example of how important it is to be on top of your finances. Even if you’re a great person (or organization), someday you’re going to be held responsible for the money coming in and going out of your account. SPEND.GROW.GIVE. will help you keep track, but you can get involved by setting a budget and sitting down with your advisor to talk about where you want your money to go.

Transforming a nonprofit into a for-profit company is a tricky and lengthy process that many organizations are willing to undertake.

• The majority of micro loans dispensed around the world come from for-profit microfinance institutions. However, it is rarely known that many of these organizations began as nonprofit NGO’s.
• Transforming a nonprofit into a for-profit organization is a long process and involves attracting investors, obtaining regulatory approval and getting a financial institution license.
• Many organizations struggle to achieve for-profit status while maintaining their social mission – it is difficult to keep the founder, investors and stakeholders equally satisfied.

Facts & Figures

• SKS Microfinance was funded by three rounds of venture capital and grew from nonprofit to have 4.7 billion borrowers in 2009.
• SKS just raised another $358 million in an IPO.

Best Quote

Grameen Bank reaches 7 million clients and that’s amazing. On the other hand, it took Professor Yunus [Grameen Bank's founder] 35 years to do that… Can you imagine how many generations it will take to reach 150 million poor households in India if we took that approach? We have to scale more rapidly, and only commercial capital will meet our huge funding requirements. – Vikram Akula, Founder, SKS.

Obama needs a hefty sum to implement his project, Promise Neighborhoods, and the senate and the house are reluctant to pay up.

• It seems unlikely that President Obama will receive the full amount of funding he requested from next year’s budget for Promise Neighborhoods – a program that helps nonprofits set up anti poverty projects.
• This year, only $10 million was delegated to the cause, however because the program was largely in the planning stages, it was sufficient to cover costs.
• In order to implement the program over the next five years, a large increase in funds is required, an increase that the Senate and House appropriations committees will not dole out.

Facts & Figures

• The Obama administration requested $210 million for the project.
• The Senate allocated only $20 million to the cause.

Best Quote:

“Every significant policy decision made by the Department on Promise Neighborhoods has been made behind closed doors, with little or no public knowledge or input,” – Paul Lester, Senior Vice President for Public Policy, Promise Neighborhoods.

Business schools are balancing their curricula by not only teaching students to make tons of money – but also how to give it away

• Business schools have begun to integrate courses on practicing philanthropy into their curricula.
• Students are taught the historical and technical aspects of philanthropy. They visit non-profits, track the influence of donations and trace the relationship between philanthropy and public policy.
• The training aims to expand knowledge of philanthropy beyond grant writers and those who wish to work for NGO’s to people entering all areas of business.

Facts & Figures

• More than 100 college and business schools in the U.S. offer courses on philanthropy.

Best Quote

“At some point in their lives, most of these students will either be a corporate donor or an individual donor and my class teaches them how to do philanthropy effectively. Most general MBAs that I’ve taught marvel that there is this world out there that they never thought existed, and they are surprised by how hard it is to give away money.” – Kristen McCormack, Professor, Boston University School of Management

• Job-training programs typically collaborate with specific industries (like construction and health care, for example).
• Participation in a job-training program can significantly increase an unemployed or low-skilled worker’s likelihood of getting hired.
• Certain elements from the programs contribute to their success, such as linking to employers and screening the participants.
• These programs must identify employers’ needs, screen for suitable program participants, be able to fund the training and hire the staff needed to train.

Facts and Figures

• Program participants earned an average of 29% more than those who didn’t attend.
• Job-training programs are active in 40 states.

Best Quote

“It’s very easy for someone to say, ‘We have a sectoral-employment strategy,’ particularly when more money may be coming from Washington. We really wanted to make sure we were doing this with our eyes wide open, to help scale the positive findings in the study.” – Nadva K. Shmavonian, President of Public/Private Ventures, which authored the report

• On Facebook, direct fund-raising has proven to be unsuccessful.
• Nonprofits raise more money when donors can engage in the philanthropy (through dialogue and games, for example) rather than direct solicitations.
• Establishing relationships between Facebook users and real-world outcomes has led to more people donating to a cause.
• Zynga (the largest game developer on Facebook) has partnered with Water.org and Huntington’s Disease Society of America (HDSA) and has raised more than $130,000 for the causes.

Facts & Figures

• 61.1% of nonprofits reported little to no results when fund-raising through social media.
• More than 235,000 nonprofits are on Facebook, but a relatively small number of them have donor funds.

America is diverse, so a strategy to prevent a national problem has to be just as varied.

• On Tuesday, President Barack Obama issued the first national AIDS plan, a strategy that is considered a milestone in the history of AIDS in America.
• In America, AIDS users are diverse and the causes of the disease vary according to geography and economic background. Therefore, one single method of prevention cannot be applied to everyone.
• Obama’s plan links nonprofits, organizations, businesses, and philanthropies with local governments to tailor specific prevention programs according to the surrounding demographic of AIDS users.

Facts & Figures

• 1 in 30 adults in Washington, D.C. are infected with HIV
• HIV is the leading cause of death among black women of childbearing age

• U.S. relief organizations have received $1.3 billion since the earthquake, but experts fear that it’s not enough to fund rebuilding.
• Nonprofits have provided a lot of food and water, but may not be focused enough on providing shelter.
• Hurricane season is imminent and aid experts emphasize the need for stable structures and shelters, especially in under-served rural areas.

Facts and Figures

• An estimated 230,000 people were killed in the January 2010 earthquake.
• Clearing rubble and establishing land rights are the two main obstacles to construction.
• 3,722 transitional shelters have been built – each houses a family of 5.
• Nonprofits aim to build 125,000 transitional shelters by mid-2011.

Best Quote

“I feel really good about what the donor community did in this first six months. I would feel even better if I knew that the donor community was poised to stay active over the long haul.” – Regine A. Webster, Senior Associate for Disaster Philanthropy at Arabella Advisors

• Nonprofits in New York City are anxious that a state budget proposal will be implemented that greatly reduces tax deductions for charitable donations.
• The proposal is meant to bolster New York’s sluggish economy by allowing the 3,500 New Yorkers who earn more than $10 million a year to deduct only 25% of their charitable contributions – instead of the 50% it is now.
• If the proposal passes, it could generate up to $100 billion for the state, but it will also greatly decrease the incentive for high-income New Yorkers to donate to charities.

Best Quote

“Any proposal that could possibly decrease private giving is going to be a disaster for all nonprofits in New York City and throughout the state. The state cannot balance the budget on the backs of those in need.” – Michael Stoller, Executive Director, Human Services Council