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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 Scorecard provides the questions.

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

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

  • Is the nonprofit CEO different than the Board Chair?
  • Are CEO Annual Evaluations completed?
  • Is the annual Staff Turnover Rate under 25%?
  • Does the Board have 5+ Members, 2+ annual Meetings, 2+ Committees, and Term Limits?
  • Is Board Compensation zero with no Board Members related to Founder or CEO?
  • 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 and Funding?
  • Has Cost-per-Client Served decreased in last 3 years?
  • Does the organization have more Volunteers than Staff?
  • Is there collaboration with multiple Strategic Partners?
  • Is the Cost to Raise $1 $0.15 or less?
  • Does cumulative SURPLUS from the last 4 years exceed DEFICIT?
  • Is the Total Current Debt less than 30% of annual Cash Donations?
  • Are 3 or more 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?

 

  • Are outcomes measured against Benchmarks or averages?
  • Has there been an Independent Evaluation of program outcomes?
  • Do staff use internal scorecard to track Key Performance Indicators?
  • Do they Survey Beneficiaries about program quality and impact?
  • Is the Big Organizational Goal a realistic and measurable goal?
  • 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?
  • Has Self-sustainability % increased in past 3 years?
  • Is the Revenue % from Board 1% or greater?

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