I work for...
Is my giving really making a difference? That is a question that haunts every giver. Every day individuals and foundations make decisions about where to give. Over a million active U.S. charities provide endless opportunities to support big visions and passionate leaders. The difficult task for those of us screening opportunities is how to know who is really making a difference.
The task should be easy. Charities should be measuring their performance and reporting the results. All of us who issue grants at foundations should have no more difficult a task than reading grant impact reports from previous gifts. But it’s not that simple. The quality and clarity of grant reporting is all over the map. So what do you do to raise the bar for grantee reports? Go to the rest of my post on the new Association of Small Foundations blog to find out and discuss.
Do you want to know if charities you support operate efficiently and effectively in pursuit of their mission? You can. The best online charity evaluation platform just got better. The 2-page nonprofit Analytical Overviews from Intelligent Philanthropy have added 30 entry fields for a total of 150 up-to-date data points on organizational health and performance. Check out a sample 2012 edition Analytical Overview. There is no more comprehensive and concise overview of a charity's leadership, financial management, strategy and impact available on the internet anywhere.
New nonprofit information in the 2012 edition Analytical Overviews include...
High performing nonprofits must understand how to manage their money. Charities cannot promise great things to supporters and run out of resources along the way. A delicate balance of maintaining healthy reserves, minimizing debt, and sticking to a budget is required. Donors don’t want a bait-and-switch where increased donations go to debt service or get stockpiled in the bank without any increased impact. And no one can tolerate financial mismanagement where an organization lives in the red with unrealistic budgets or doesn’t put the majority of its funds into mission-related activities.
Just days before Intelligent Philanthropy turns 1 year old, we have finally been recognized as one of 8 major online charity evaluation and accountability organizations. RELEVANT Magazine published an article "Where Do Your Donations Go?" and listed Intelligent Philanthropy alongside Guidestar and GiveWell. Admittedly, the author chose to highlight and interview Charity Navigator and ECFA leaders. But the citation in a 3rd party publication is a step in the right direction for what we believe is the best all-around charity evaluation platform available.
Where do you start when evaluating the health of a nonprofit organization? Incessant headlines about dishonest educational programs, irresponsible board governance, misleading cancer charities, and corrupt first responder foundations remind us a little assessment can go a long way. But most of us don't have time for detailed due diligence. So where do we begin a cursory evaluation of nonprofit infrastructure and impact?
Are foundations making good grants? I see positive trends to applaud and emulate in the latest Money for Good II study that surveyed foundation giving decisions. If you want to find out how many hours of research foundations are doing before issuing grants and how much their findings affect new gifts, check out my recent post about Positive Trends in Foundation Grant-making at the Council on Foundations RE:Philanthropy blog.
What if your donation to fight human trafficking paid the salary of a human trafficker? What if your donation to support widowed law enforcement families went to a felon’s bank account? What if your child sponsorship monthly donation and letters never helped the girl in the picture? What if you gave money to loan to a struggling entrepreneur in Africa that was actually embezzled by loan officers? In the last year, I have seen each one of these nightmares come true. It could have been avoided. Read how in my latest Alliance magazine article Giving poorly can be worse than not giving at all.
When people think more, they are less generous. How do you feel about that? Leon Neyfakh promotes this hypothesis in his new Boston Globe article "Why We Give to Charity." Nonprofit service organizations like Law For Change and Campbell & Company have posted the provocative article for website visitors to read. It has been swirling around philanthropy-related twitter feeds for all to see. I bumped into it on a daily news blast from the Chronicle of Philanthropy. I loved its trend-bucking subversion. But I found its case truly unconvincing. So much so, I'm firing back with some neglected facts in the oversimplified case.
Before you evaluate nonprofit performance, stop and ask 3 questions about the charity:
These 3 questions are all related to OUTCOMES. Outcome measurement and outcome-based evaluations have taken center stage in the contemporary debate about nonprofit performance. I, for one, am a voice and supporter of this trend. However, we can't let the trend rewrite each organization's goals. Some charity's just don't exist to produce the savory long-term, ever-increasing, measurable outcomes that have become all the rage. So if we are going to determine how well an organization is performing, we must first figure out what standards we can and cannot use to evaluate performance.
Endless conversation about "outcomes," "performance," and "impact" needs to come to an end. It doesn't need to stop. It needs to get somewhere. Concrete categories and conclusions need to take shape and either be adopted or discarded. That is what my next 7 blog posts are all about. I'm going to lay out a standardized approach to assessing organizational health and performance in the nonprofit sector.
Before I present the six standards for evaluating nonprofit performance, I've got to be clear about the pros and cons of a standardized approach vs. a customized approach.