The Practical Guide To Evaluating A Charity’s Effectiveness
Deciding Where To Donate
Effective altruism is both a philosophy and an emerging movement. The philosophy that we should use our lives (or at least a part of lives!) to do the most good we can in the world is a meaningful one. Even if you have a 9-5, there are so many ways you can still give back, whether that includes your finances, time, or personal network. But with all these options, it still begs the question: how do you figure out which charities are the best to invest in? Is it dependent on their size, their impact model, where the organization’s funding comes from, or how much you vibe with their Instagram?
The short answer is, a little of all the above. Knowing if a charity is effective at carrying out its mission is essential. So, without having to dive into any Form 990s, here is a practical guide to evaluating a charity’s effectiveness:
1. Identify the intervention strategy personal to your beliefs
Thinking through what you find to be the most effective way to “combat” the problem (or a set of strategies) will help guide you towards what you think is effective. At a high level, all complex social problems are intertwined. When facing issues like the spread of malaria, juvenile delinquency in the US, or creating economic opportunity for vulnerable communities, there is often not a straightforward solution. Often, addressing these issues will require a combination of intervention strategies. Solutions could include providing:
Products like providing deworming medicine or school supplies to communities with limited access
Community development programs that holistically address the economic and social issues faced by a community, or build resources like libraries for a bigger group of people
Education and skills-based training to teach practical skills to provide access to a job market, such as artisanal training for those transitioning out of poverty or English classes to refugees
Faith-based or spiritually-driven support to address levels of hope and holistic well-being
Advocacy to change political systems or policies that hinder progress
For example, when it comes to the clean water crisis, maybe you’ll decide that the most effective strategy is to provide water purification filters through companies like Lifestraw. Or, maybe you think education about proper hygiene and sanitation is most important to stop negative practices. Or, you might sway towards organizations like charity: water that build wells for communities, allowing girls more time to stay in school. Still, you might decide that the water crisis at home is most effectively tackled through advocacy groups like Clean Water Action and electing the right politicians into office.
2. Drill down into measuring effectiveness
Once you’ve narrowed down the kinds of effort you want to give your time and resources to, then you can truly measure its specific effectiveness. A great place to start is GiveWell’s guide on key questions to ask when evaluating a nonprofit, dependent on its strategy. For example, when it comes to animal shelters, the guide recommends asking questions like, “Do you have more animals surrendered than you can take?” and “How do you monitor the living conditions in your shelters?”
It’s important to take a look into what the organization claims are its “success factors” and how it’s measuring progress against its goals. Is it the number of people reached, measuring clear before-and-after results, or passing a bill? The best organizations often have an attitude of wanting to “put itself out of business” by completely tackling and solving a social problem. You’ll also learn a lot by following a charity’s social media channels to humanize the organization and get a sense of how it talks about its work. You can also look into any media coverage or articles written about the nonprofit. Are there positive articles highlighting its impact? Has a journalist taken the time to sit down with the charity to delve deeper into its operations, or gotten to know its CEO?
If you really want to get a sense of the inner workings of an organization, you can also check out the nonprofit’s Glassdoor page to get a sense of the kind of people who work at the organization. Does it have a great, mission-driven culture? Are people effective and dedicated to the goals of the organization, or is it a messy operation? Although you may or may not be working in the office with these people, are they individuals that you would want to “partner” alongside in your finances or time? Keep in mind that no organization is perfect, but its internal culture could help shed light on some otherwise hard-to-identify internal challenges.
3. Factor in the financials: is there room to grow?
We promised there was no digging into Form 990s and tax audits, but it’s still important to consider how money is flowing in and out of the organization. In this last step:
1. Check your findings with third-party sources
Hint: they do the tax forms analysis for you. Financial accountability and transparency in a nonprofit are key, making sure your dollars go exactly where you intend them to. There are a ton of great certification programs that independently evaluate an organization’s accountability and transparency, ranging from GuideStar to Give.org, Charity Watch, Charity Navigator, and GreatNonprofits.
In addition, you can look towards respected foundations and check out their databases of awarded grants to see the kinds of nonprofits that they’ve funded in the past. Many of these foundations—including the Bill & Melinda Gates Foundation, Ford Foundation, and Draper Richards Kaplan Foundation—have rigorous processes for evaluating high-potential organizations before awarding funding, meaning chances are good they’re nonprofits you want to get behind.
2. Identify the organization’s sources of funding
Like any good investment portfolio, diversification is key. While not all organizations will have a diversity in their funding, it’s usually helpful if their dollars are coming from a range of both public and private sources. This can mean receiving government-funded grants, foundation funding, private fundraising from donors, or even selling its own products online to fund its charity work.
On the flip side, you may decide that you want to support an organization that has no political ties with the government, or one that operates like a business (what is a B corp?) so it doesn’t have to rely on private funding.
3. Consider the organization’s room to grow
In your research, you will inevitably come across both small and large charities doing great work, whether on a neighborhood or global level. While there can be pros and cons to both, it’s important to take a page from Goldilocks’ book (kind of!) and think again about what you consider success and impact to look like. While larger organizations may have a wider reach and more connections, internal processes could bog down operations and prevent it from diving deeper into specific issues that arise. Conversely, smaller nonprofits may struggle to find funding but be quicker to react.
There’s no guarantee that you’ll find a charity that’s “just right” for you, but more important than size, consider if the organization has room to grow and widen its impact. That way, you’ll know that your dollars have the opportunity to stretch the extra mile and your time won’t be wasted in advocating for a cause that has a “cap” or expiration date.
Are there any charities that you’ve vetted to be effective? What are your strategies for deciding whether or not to give? We’d love to hear in the comments… and happy hunting!
Alice is a California-grown writer thinking on the things shaping urban living, the modern woman, and living a conscious life of impact in light of a bigger world. A graduate of Northwestern University’s j-school, she spent time abroad working with a microfinance project in Peru before transitioning into a 9-5 in the global development sector. When she’s not daydreaming about opening a social impact coffee shop, you can find her traveling, plié-ing at the barre studio, or curled up with a good book. Follow her latest creative endeavors and musings at The Kind Citizen or on Instagram at @alice.zhng.