1.4 Assessing Organizations

How do you assess which organizations to support? The number one criteria is that they make the biggest impact for the causes or values you support? That may be obvious. The harder question is, how do you assess the impact they’re making? You can break that question down into two questions. How do I define impact? And where can I get information about my criteria for impact? Here are some ways that you can define impact. Closest alignment with your values, you could compare organizations for how closely they match your values you may already belong to or very loyal to these organizations. Your decision may be based more on affiliation membership or who you identify with rather than objective assessment of the agency’s outcomes or effectiveness. Most people usually use this criterion when giving efficiency and effectiveness. People often translate efficiency as the percent of revenues that go towards the programs and benefits to the organization versus administration or fundraising costs. effectiveness is how well the organism meets its mission. Please understand that efficiency and effectiveness are not the same. An organization could be very efficient directing 99% of every dollar to programs but still be ineffective at its mission by not serving all the people it could or having a poor track record of improving conditions. And organism organization can sacrifice effectiveness by trying to be efficient. They can be unorganized, chaotic and poorly managed. It’s so easy to measure efficiency, but be cautious about using this as your main criteria for choosing an organization. breadth versus depth are the numbers game of how many people an organization serves. I know of a nonprofit that has two programs, one houses large numbers of homeless families with limited support for those families. The other serves a small number of families but provides in depth help to finding jobs finding housing and teaching life skills. families in this program rarely return to homelessness after being in the program. Which program is better That’s a decision only you can decide. Do you prefer an organization or program that provides a small benefit to a large number of beneficiaries, or one that provides more comprehensive benefits to a few beneficiaries? Once you have some criteria for prioritizing who you want to give to, you can do some research to assess organizations on those criteria. Here are some suggestions. personal observation, you can see firsthand the impact of organizations you belong to or volunteer with. It doesn’t give you a complete picture of the organization, but you have clear insight into a part of it. charitable organization information websites. The document titled charitable organization information websites in the next lecture has a list of sites that provide information on thousands of organizations all have searchable databases with lots of information about different organizations. Some have ranking systems to rate the organizations, you have to decide if their ranking system matches your criteria for defining impact form 999 One way to research the financial and other information about a nonprofit is through their IRS Form 990 called the 994. Short. The 990 is an information form that most organizations are required to send to the IRS each year. Most of the information on third party websites comes from a 990 form. You can request a 990 form directly from an organization view it on some of the charitable organization information websites mentioned earlier, or go to the IRS tax exempt organization search. The link to that site is at the bottom of the charitable organization information document in the next lecture. Not all organizations are required to submit a form 990 for example, churches and many faith based organizations are exempt from filing a 990 annual reports. Many organizations create an annual report that highlights information from the past year spotlights programs and may list major donors. They often include summarized financial statements, audited financial statements, you can request the audited financial statement of an organization They have no legal obligation to give it to you and many smaller organizations don’t pay for audited financial statements. The audited financial statements have many notes with detailed financial information about the organization. The auditors attest to the accuracy of the financial statements but not the effectiveness or efficiency of the organization. It’s time to start filling out a giving plan. Download the giving plan template that’s in the lecture two lessons from this one. Fill in the name of the organizations you have decided to support.