Co-founder and Director of Mieux Donner
Reading time: 6 min.
How do you know if your donation is being put to good use? It’s a question that haunts many donors. Some charities and foundations are sometimes subject to scandal or mismanagement of funds, which can damage the relationship of trust with their donors. Don en Confiance and Effective Giving are two approaches that attempt to address this issue.
The “Don en Confiance” label is a certification awarded to non-profits and foundations making appeals for donations that undertake to comply with strict criteria of transparency and ethics. It includes a wide range of large social and humanitarian associations and foundations, medical research associations and international solidarity organisations. Created in 1989 by the Charter Committee, it is based on 4 major fundamental principles:
It imposes total financial transparency, with the publication of detailed financial reports and supervision by auditors.
It ensures disinterested and rigorous management in the use of funds.
It ensures that there is an aspiration that the money will be used to best effect to achieve the objectives pursued by the association.
The fact that it is awarded by an independent organisation guarantees independence of judgement.
To obtain this label, a charity must meet specific requirements. Organisations awarded the label must put in place responsible governance with an independent board of directors and comply with strict ethical rules, showing that the association is run on a disinterested basis, with no monetary compensation.
The Don en Confiance label is awarded after an examination of the admissibility of the application, followed by an in-depth investigation. It is only after this phase that the organisation can be awarded the label. This process is accompanied by ongoing monitoring, carried out by two auditors who keep a constant eye on compliance with the commitments made.
The 99 organisations labelled by Don en Confiance benefit from official recognition, guaranteeing donors that their funds are rigorously managed.
The Comité de la Charte (charter committee) has drawn up a code of conduct, and compliance with it is a condition for obtaining the label. There are several stages to acquiring the label.
It all starts with the submission of an application file, where a committee examines the files to assess the charity’s governance and financial practices. An initial audit is then carried out to examine internal practices in depth. The dossier is then submitted to an independent committee, which makes the final decision on awarding the label. Once certification has been obtained, regular checks are carried out to ensure that commitments are respected.
The Don en Confiance label ensures that the charity is well managed and that the money is guaranteed to be used for the purpose assigned to it by the charity and communicated to the person making the donation: if the charity has announced that the money will be used to renew the pipes in an isolated village to guarantee access to drinking water, it must be possible to prove that this has indeed been the case.
This leaves aside the question of the real impact of the donation. Indeed, if there is a way of saving a hundred times more lives with the same budget by means other than renovating the pipes, for example by adding a few milligrams of bioavailable zinc [1] to the water consumed, the Don en Confiance label will not be affected.
This is not without consequences. Take PlayPump, for example. The aim of this organisation was to install turnstiles in sub-Saharan African countries such as Malawi. The concept was to create water pumps in the form of turnstiles: children would play on them and pump water at the same time. PlayPump actually carried out the projects promoted, and was not suspected of embezzlement. To a first approximation, it ticked all the boxes of the Don en Confiance label.
In practice, however, it turned out that children didn’t play on the turnstiles for long: because they acted as pumps, they were difficult to push. In the end, the people who came to fetch water, often women, had to push the turnstiles themselves. The turnstiles were also more difficult and expensive to maintain than traditional water pumps. Millions of euros in donations were wasted on this large-scale effort.
Looking at PlayPump's governance and its proper use of donations, people could have given in "full confidence" without suspecting that their generosity would have a negative impact.
We live in a complex world where solutions that may seem intuitive do not necessarily have the desired effects. Charities that do not ask themselves the question of the final impact or the reliability of their results are not sure of helping as they would wish. In contrast, the use of mosquito nets to protect against malaria has been the subject of scientific publications and is one of the most reliable interventions for saving lives [2].
A new system, which is becoming increasingly popular, is that of effective giving, and adds another step. An organisation, such as GiveWell or GivingGreen, will study a given area – in the case of GiveWell, it’s health and global poverty, and in the case of GivingGreen, it’s the climate. The evaluator will identify a certain number of charities whose impact seems particularly promising, and undertake a quantified survey of the impact of the additional funds donated to that charity. Their aim is then to recommend the most effective charities for solving a given problem. The evaluators are naturally committed to a high level of due diligence, and follow the principles of giving in confidence when it comes to the use of funds and the implementation of projects.
Don en Confiance is therefore only the first necessary step before Effective Giving: the former aims to ensure that funds are used properly, while the latter ensures that the money spent makes the greatest possible difference to the beneficiaries.
Effectiveness evaluators use three main criteria to identify promising associations:
Once this stage has been completed, the evaluators select the best opportunities from the interventions identified, using a key criterion: cost-effectiveness.
The first step is to choose an indicator that reflects the final impact of the intervention, rather than the intermediate impact. For example, in the case of health and poverty, QALYs, or quality-adjusted life years. In the case of global warming, as it is difficult to measure its final impact, it will be tonnes of CO2 equivalent.
The second step is to relate the measured impact to the budget spent by the association. For example, an association can guarantee 0.01 QALYs per euro. The associations are then compared with each other.
Impact assessment is more rigorous than Don en Confiance, in that the charity must not simply be well managed and use its funds as advertised, but must demonstrate the impact of its actions, the fact that without its presence, this impact would not have occurred. Where possible, this involves methodological analyses that can lead to scientific publications:
The aim is to establish the so-called counterfactual impact of the intervention. You can read our methodology to find out more about selecting the best associations.
The charities with the greatest impact generally stand out clearly from the rest: for the same donation, the best charities often have an impact 100 times greater!
The evaluators begin by identifying a number of charities whose approach seems promising, generally through quick calculations of its scope and neglected nature, as well as discussions with academics in the field. Once the charity’s approach is sufficiently focused on effectiveness and is showing promising results, it can attract the attention of the evaluators.
It is important to note that the assessments are updated regularly, generally once every year or two, and that the evaluators are constantly looking for new approaches.
Don en Confiance and Effective Giving refer to two different approaches: the former aims to ensure that funds are used appropriately, while the latter ensures that the money spent makes the greatest possible difference to beneficiaries. If you’re looking to direct your giving for maximum impact, Mieux Donner can offer you free advice.
At Mieux Donner, we share Don en Confiance’s objective of enabling people to give in confidence. However, the effectiveness of donations is not a priority for the Don en Confiance label. We are aware of the new criteria on the measurement and evaluation of activities, but we note that none of the current criteria focus on the comparison of net impact versus counterfactual to improve lives in terms of effectiveness versus cost. If Don en Confiance wants their label to be associated with high impact, Mieux Donner is ready and willing to support them in this process.
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