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The charity challenge

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Students at Northwestern are learning tough, real life lessons about philanthropy. The challenge is to give away $50,000 to the nonprofit of their choice.

Sarah Watson, a student at Northwestern University explained. "I think a lot of people will see a great cause and immediately want to donate to it without necessarily looking at why they want to give."

Jackie Edelson, a student at Northwestern University added, "There's a lot of due diligence that's involved on the part of the person that's giving the money, that I really didn't think about before."

Penelope Peterson, PhD. is teaching the course, funded by the Once Upon a Time Foundation. "We want them to think about their goals. We want them to think about what they want to do with the money. We want them to think about the impact and we want them to think about how you measure the impact," Peterson said.

Their top tips? First find the right fit. Watson said, "Doing the front end work to figure out why you want to give and what type of organization you want to give to is really important."

Then do some digging. Guidestar.org, Charitynavigator.org and Greatnonprofits.org can help you find a charity and evaluate it. But nothing beats seeing how the organization is run for yourself. "That totally was a game changer," Edelson admitted.

JoAnna Frazier, another student at Northwestern University, said, "Talking to different people, you know, was great, and seeing the actual place. Seeing where your money is going to go."

Another lesson? Measure a charity on what it gets done, not on how little it spends. Money spent on salaries, advertising and marketing can be just as important as the money that goes directly to the needy.

Edelson said, "Personally, I would rather you know give more money to overhead, if it encourages intelligent, competent people to go into running philanthropies." Perhaps their biggest lesson? To change the world, we must change our thinking.

In case you're curious, the students decided to split the $50,000 up and gave it to four different groups, with the biggest chunk going to the Chicago Coalition for the Homeless. The Once Upon a Time Foundation funds 13 philanthropy programs at elite universities across the country.