Ken Stern: What’s Wrong With the Charitable Sector, How to Fix It – Wal-Mart Stores, Inc. (WMT), Chevron Corporation (CVX), Goldman Sachs Group, Inc. (GS)

Stern: Yeah. I’ll tell you a couple of stories. There are lots of stories in my book. It tells you in loving detail; I’ll give you the skim read of it.

D.A.R.E., which is — sorry, I can’t actually remember what the acronym stands for — is the principle educational charity in this country for educating children about the challenges of drug abuse. There is 20 years of high-quality research that shows that D.A.R.E. is actually ineffective, and in some cases harmful, because it’s where kids actually can learn about drugs.

What is extraordinary to me, it’s actually on a list of social programs that don’t work, yet it still remains because it has a good public narrative, it has good political connections and good ties to local police departments and schools. It still remains the principle charitable educational program in this country and, because no district is going to have more than one drug awareness educational program, it blocks other more effective programs from getting in.

Water charities to me are very interesting because water charities are very good … what you’ll find is charities are very good at the stories that sell. The stories that sell are drilling whole wells. The stories that don’t sell is maintenance and repairs — an engineer going out to tighten bolts — so what you have is lots of wells and lots of wells that fall into disrepair and don’t work anymore. It’s actually a tragedy across Asia and Africa.

One story I tell in the book — I’ll try to tell this fairly quickly — is the story of a group called Play Pumps, which was a very hot charity about 10 years ago. They had the idea of putting in merry-go-rounds that doubled as pumps so you’d have kids get on the merry-go-rounds. They’d go around and that would drive the pumps and water would come up into a tank.

It was this grand idea, great idea. Lots of money for the Case Foundation, it was a big star of the Clinton Global Initiative one year, they installed thousands of these across Africa until someone said that the emperor has no clothes.

The kids weren’t using it. They had taken perfectly good pumps out of service to put on these merry-go-rounds, which no kids used so it left the women of the village laboriously pushing these heavy playgrounds around.

No one thought to actually test these things on the ground before they went and instituted 4000 of these across the continent.

Byrnes: I think one of the main things that confuses people is, not necessarily all water charities are ineffective. Some have to be effective, but which ones are they? What’s the best way for an individual to know that they’re giving to a charity that’s actually going to make a difference?