Funder-beneficiary separation

The charity sector, for all the wonderful work it does, has many issues, and most of those can be accounted for by funder-beneficiary separation.

Funder-beneficiary separation means that the person who paid for a thing and the person who benefits from a thing are different people.

For example in the for-profit world, or in a market-based economy, the person who buys a thing (whether that's a tin of beans or a car or a holiday) is usually the person receiving the thing. In the world of charitable giving, this almost always not the case. So in the world of charitable giving we have funder-beneficiary separation.

This fact has a number of consequences. In particular it means that
- charities can continue to have very little (or even no or negative) impact as long as they can convince donors to continue funding them (see more here)
- charities are continually having to manage the interests of donors who sometimes care about things that are of little or no relevance to the charity's ability to get things done well (see more in this article about bouncers, this article about CEO pay, or this article about admin expense ratios)

What the solution to the problem?
We need to try to close the gap. We can do this by engendering the right mindset among donors, a mindset that encourages donors to view their donation as "buying" a philanthropic outcome, rather than simply giving money away. SoGive, the social enterprise creating a central database of charity impact data, exists to do exactly this.