Making the most of your charitable gift takes a little PREP work.
by Leanne McConnachie
When it comes to charitable giving, the best advice I can give you is this:
Choose the issues that matter most to you, then look for focused, outcome-based organizations whose philosophies and position statements align with your own values, who collaborate with or are supported by their peers, and whose financials are generally sound. If you are planning a large gift or bequest, split your gift amongst several groups who use different strategies to achieve similar outcomes. The reason is simple: no single organization working alone is as effective as several groups working together or in parallel to achieve a desired outcome.
I came to these conclusions from three perspectives: as a donor, as someone who studied organizational effectiveness of non-profits, and as an employee of the Vancouver Humane Society.
The goal of my graduate research at UBC was to determine what questions donors should be asking in order to choose the most effective charities. I identified four key areas for evaluation, which I termed the PREP Framework:
* Philosophy – the organization’s mission, objectives, position statements and values
* Red Flags –operational indicators that are not the norm for the sector
* Efficiencies – the financial and operational conduct of the organization
* People – the abilities and diversity of those who work in and support the organization
Philosophy:
Donors should ensure the organization’s overall philosophy and mission aligns with their own values. Their position statements should disclose what the organization supports, and what it is against. Ask the organization what they have achieved in the past, what outcomes they are trying to achieve in the future, and what strategies and tactics they will use to resolve a problem.
An example of how an organization’s goals and a donor’s values can become misaligned is with wildlife protection groups. Both the charity and donor may share a goal of conserving wildlife, but if the organization’s population management strategy includes culling and hunting, and the donor is opposed to such methods, the donor’s values will be compromised.
Red Flags:
Red flags are financial or operational indicators that are unreasonable or fall outside the norm for the sector. Common red flags include the inability to produce financial statements, salaries that are disproportionate for the size and scope of the organization and a lack of demonstrable achievements. One red flag that most people overlook, and is the easiest and perhaps most important to validate, is a lack of support from or collaboration with peers in their sector.
Efficiency:
Efficiency refers to how the financial conduct of an organization measures up against pre-determined benchmarks, such as administrative or fundraising costs and program expenses. Review their strategic plan and see how well their objectives align with their budget. Confirm that they have a diversity of funding sources and finances in reserve to sustain an economic downturn.
Although much importance is placed on efficiency, it is not the best reflection of effectiveness. After all, if an organization is achieving its mission and objectives, does it really matter how they allocate their operational funds? Isn’t the achievement more important than how they achieved it?
People: As in the corporate world, the people employed by an organization are the key to its success. View the backgrounds of the management team, assess the turnover rate and, again, see what their peers and supporters have to say about the organization.
The PREP Framework is by no means a perfect tool, but donors should garner enough information to ensure they focus their charitable dollars on capable, fiscally responsible, effective organizations with philosophies that align with their own values. An honest and effective charity will be all too willing to answer your questions about what they have accomplished, where they are going, and how your gift will be used.
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