Why Trust in Charities is Crucial

A year ago, the German newspaper “Die Zeit” published a critical report on how many trees the nonprofit Plant-for-the-Planet (PftP) actually plants. After researching – by its own account – for a year and closely examining the numbers, the accusations in last week’s article now become more concrete: that the numbers PftP quotes for trees being planted are unrealistically high. Also, the trees would certainly not have a 94% chance of survival, and above all: there are already enough trees on the Yucatan Peninsula, where PftP is active.

A little later, Felix Finkbeiner, founder and spokesman for PftP’s board of directors, responded to the accusations with a blog article. The pattern is the same in both articles: first, discredit the opponent, then compile exemplary data to strengthen one’s own position, and finally address one’s own community. The articles are clearly polarizing and not written objectively. The newspaper “Die Zeit” doesn’t mention a single positive thing about PftP, yet this organization can’t be just this bad. PftP defends itself, but a statement is clearly missing on how the numbers will be independently audited in the future. This is demanded by the Center for Sustainable Management of the University of Witten/Herdecke.

My point here is not at all to judge the work of Plant-for-the-Planet. Certainly, PftP is planting some trees in Mexico (I haven’t been there yet, unfortunately), at the same time, they provide the infrastructure via an app to collect donations for hundreds of tree planting projects worldwide, and the fact alone that they draw attention to the climate crisis is commendable.
But it is important that they not only implement projects but also do so as effectively and transparently as possible and have them independently audited to build trust and have maximum impact.

Another example: organic food

The organic segment is one of the few segments in the supermarket currently growing and growing consistently. Supermarkets have realized that customers are willing to pay more for organic foods. Maybe because they’re healthier, produced more fairly, or do something good for the environment, or whatever effect you hope it will have.

But if supermarkets deliberately offer organic food more expensively because it allows them to earn extra money, this is completely reasonable from an economic point of view, yet it also breaks trust. And it leads to an attitude among customers à la “I don’t care what I buy, they just want to make money anyway.”

And that’s a huge problem because the whole idea of the market economy is based on the fact that customers know what’s best and control supply with their buying decisions. No one would produce products if there were no demand for them. But for customers to buy the products they think are “better,” it takes trust. And likewise, it takes trust for people to donate to the charities they think will be effective.

Transparency & Trust

The climate crisis is a tough problem, and many people and nonprofit organizations are working day and night to solve this problem. To really make a difference and not just take money that other nonprofits could have used, a nonprofit should be as effective as possible (in the spirit of the “effective altruism” movement). And most importantly, it also shows that it is transparent and trustworthy in solving the problem.

It is far more effective to pool donations and put them into non-profit organizations to solve problems than for each person to pursue their own little project. But for that to happen, there has to be trust that the nonprofit will actually solve the problem.

Thus, the most important value proposition of a nonprofit organization is not the solution to a problem but trust and transparency that this problem will actually be solved.

Our own experience

A year ago, I started a small publishing company: Visual Ink Publishing. We publish books in the realm of education, and we do it completely open-source under a Creative Commons license – both as a print and digitally. This means that we have a special responsibility to make a social impact in the realm of education, open-source & free access to knowledge, and the printing and delivery of the books. To print books, trees are cut down and turned into paper, which consumes a lot of energy and water. And finally, the books are transported to the readers, which causes additional emissions. Publishers have an important responsibility here for printed books.

As a young publisher and as a first step, we have also supported Plant-for-the-Planet through the Startup Review Forest, which we learned about through the Startup Insider newsletter, and thus have already planted the first trees. At least on paper. But this can only be a very first step. Also, we will evaluate in more detail which organizations are really effective and whether one might achieve more impact, for example, by preserving peatlands, remediation of soils, or in the area of environmental education in addition to planting trees.

Bottom Line

The most important task of a nonprofit organization, in addition to solving its own chosen problem, is to establish the trust that that problem will actually be solved.

And if you really want to achieve impact, you shouldn’t trust that Fairtrade, organic food, and marketing-heavy tree-planting campaigns will save the day or the world. Rather, research yourself, which projects are really effective, or in the spirit of “Doing Good Better” most effective, and then consciously decide how to donate your money so that real impact happens.

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