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How to Evaluate Charities

Evaluating nonprofits requires the right questions and the right data. Nonprofit Analytics capture the data. Our Charity Evaluation tool provides the questions.

You can now learn how to analyze charities on your own. Subscribers can download our interactive 2016 Charity Evaluation Tool and evaluate any charity using Nonprofit Analytics in our database.

Our Charity Evaluation tool measures nonprofits against 6 standards in each the 6 categories below. BOLD words correspond to 2016 Nonprofit Analytics fields:

  • Is the nonprofit CEO different than the Board Chair?
  • Is a CEO Annual Evaluation completed each year?
  • Is the annual Staff Turnover Rate under 25%?
  • Does the Board have 5+ Members, 2+ annual Meetings, and 2+ Committees?
  • Is Board Compensation zero with no Founder/CEO Family Members on Board?
  • Are 2 or more weaknesses presented in the S.W.O.T. Analysis?
  • Do Program Expenses have higher 3-year growth rate than Administrative Expenses?
  • Do Clients Served have a higher 3-year growth rate than Staff?
  • Do Clients Served have a higher 3-year growth rate than Funding?
  • Does the organization leverage multiple Volunteers?
  • Is there collaboration with multiple Strategic Partners?
  • Is the Cost to Raise $1 $0.15 or less?
  • Did the organization end in the black 3 of the last 4 years (see SURPLUS/DEFICIT in Financial Mngmt section)?
  • Is the Total Current Debt less than 30% of annual Cash Donations?
  • Are more than 3 months of Current Cash Reserves maintained?
  • Does the Reserve Coverage exceed 50%?
  • Is discretionary spending limited by Written Financial Controls?
  • Do $2 million+ organizations pay for Independent Financial Audits?
  • Are there specific milestones and deadlines in the 1-3 Year Plan?
  • Is future Plan realistic based on previous Results and Growth Trends?
  • Does Up-to-date Board-Approved Strategic Plan guide decisions?
  • Is Recent Program Improvement a significant and specific upgrade?
  • Are concrete Opportunities for growth listed in the S.W.O.T. Analysis?
  • Is Geographic Scope clustered enough to enable effective oversight?

 

  • Do staff use internal scorecard to track Key Performance Indicators?
  • Is the Big Organizational Goal a realistic and measurable goal?
  • Are outcomes measured against Benchmarks or averages?
  • Has there been an Independent Evaluation of program outcomes?
  • Do they Survey Beneficiaries about program quality and impact?
  • Do specific Results include long-term outcomes not just number of annual activities or one-time events?
  • Is the % of Gift Income from Largest Gift 15% or less?
  • Has Annual Income increased during the last 3 years?
  • Does the Donor Retention Rate exceed the average of 55%?
  • Has the number of annual Donors increased in the last 3 years?
  • Does Earned Revenue create at least 1% Self-sustainability?
  • Is the Revenue % from Board 1% or greater?

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