The crisis for Australian charities is one of identity. They are in crisis because so many of them do not know who they are and they do not know why they are doing what they are doing. And what is sad is that many do not even understand the concept, according to Stephen Judd, Anne Robinson and Felicity Errington in their book Driven by Purpose: Charities that Make the Difference.
The world has many social problems which philanthropists are trying to solve, but philanthropy is not addressing those problems in an efficient manner, according to Eric Friedman in his book Reinventing Philanthropy: A Framework for More Effective Giving. The problem is that donors tend to give to causes that appeal to them, instead of directing their giving towards the organisations which address the biggest problems in the most effective ways.
As serious philanthropists know, the results of philanthropic giving are often significantly less than anticipated. Philanthropic organisations have to decide whether it is more important to make donors feel good about themselves (in which case “results” are reported merely in terms of inputs such as amounts disbursed and number of people “helped”) or to maximise the achievement of their mission (in which case it is necessary to do the hard work of measuring and evaluating the actual outcomes such as the net benefit or detriment of a program to a poor community). The book The Robin Hood Rules for Smart Giving by Michael Weinstein and Ralph Bradburd describes one technique for valuing and comparing the relative effectiveness of different types of philanthropic endeavours.