by Iona Joy, Head of Charity Effectiveness and Sally Bagwell, Consultant, NPC
- Charitable giving can change people’s lives. When donors give to effective charities, the results can be rewarding for everyone involved.
- One key decision for donors is whether they plan to be proactive or reactive in their funding.
- It can be helpful to define a clear process with distinct stages for assessing candidates.
- In depth analysis of a charity requires a detailed assessment of the funding proposal and a visit to the organisation. But below are the key questions that can be asked by any donor considering supporting an organisation.
Charitable giving can change people’s lives. When donors give to effective charities, the results can be rewarding for everyone involved. But how can donors make sure they choose effective charities? On what grounds should they make their giving decisions?
Many people choose to give to charities where there is a strong personal connection. But increasing numbers of donors are also interested in selecting charities according to their results, i.e. the changes that occur in people’s lives as a consequence of the charity’s work. Results can be hard to measure and articulate but more and more charities are collecting evidence to demonstrate what they achieve. Donors can ensure that their giving makes a difference by asking charities questions that focus on results.
One key decision for donors is whether they plan to be proactive or reactive in their funding. Proactive funders seek out organisations to support which meet their criteria, rather than accepting unsolicited applications. This approach requires an upfront investment of time in identifying good candidates and discussing funding opportunities with them, but means you are not inundated with applications. The alternative is to fund reactively by publicising funding and inviting applications. Reactive funding gives access to a large number of organisations which might otherwise be missed, but can be very time consuming due to a high volume of applicants.
It can be helpful to define a clear process with distinct stages for assessing candidates. For instance you may develop a long-list, narrow to a short-list, and then select the charities to fund. In a proactive funding process, the long-list of candidates is likely to come from desk research and meetings with experts (See resources to find charities). In a reactive process, your long-list will be applicants who meet the grant criteria.
Narrowing to a short-list can be done using documentation available publically and requested from a charity (eg, application forms, annual reports, management accounts, budget projections, recent evaluations, project proposals etc). Once you have created your short-list, you may have specific queries for the charity. You may also wish to meet or speak with the organisation directly, in which case it is useful to speak with the chief executive and/or Chair, as well as the fundraiser.
When designing your selection process, the level of analysis that you do will depend on the amount of funding proposed, the number of charities you are assessing, your preferences and the time available.
Key questions to ask a charity
In depth analysis of a charity requires a detailed assessment of the funding proposal and a visit to the organisation. But below are the key questions that can be asked by any donor considering supporting an organisation—whatever the size of the donation, and whatever the size of the charity. These questions are based on NPC’s framework for analysing charities.
- Activities: Are the charity’s activities clearly described, are they coherent and do they support its mission?
- Results: Can the charity articulate and evidence the impact it has on the lives of the people it supports or the issue it tackles?
- Leadership: Does the charity have a clear vision and strong management and governance?
- People and resources: Does the charity use its people and resources as effectively as possible to deliver its mission?
- Finances: Does the charity have the money it needs to sustain its activities and does it manage its money well?
- Ambition: Does the charity look to achieve long-term change by setting realistic, achievable goals?
With each of these aspects of effectiveness, it is important to vary expectations according to the size and maturity of the organisation. For example, a well-established charity with substantial financial resources should have better processes for measuring results than a smaller, newer charity.
For more in-depth discussion of the aspects of charity effectiveness, see The little blue book: NPC’s guide to analysing charities, for charities and funders.
About the authors
Iona Joy, Head of Charity Effectiveness, iona.joy@thinkNPC.org. Since she joined almost a decade ago, Iona has researched a myriad of topics for NPC, analysed over 50 charities, and helped us develop our charity analysis methodology. Iona advises charities and funders on improving their impact and leads NPC’s work on social investment. Iona has worked with clients including the Clothworkers’ Foundation, Scope and Synchronicity Earth, among others.
Iona is a regular commentator on issues facing the sector and has appeared on BBC Television News and Radio 4, and written for The Guardian and CityAM.
Iona joined NPC after a career in finance, including with the then Commonwealth Development Corporation and as a merchant banker.
Sally Bagwell, Consultant, sally.bagwell@thinkNPC.org. Sally’s work within the Research & Consulting team supports charities and funders to identify ways to overcome the challenges they face. Since joining NPC in 2012, Sally has helped design qualitative research to understand high-net-worth donor motivation, worked on a project for Big Society Capital on the measurement of social outcomes for investors and presented to Merrill Lynch’s Global Investing Programme. Before NPC, Sally worked at Community Action Southwark to support local charities and voluntary organisations and at GuideStar Data Services as Account Manager.