Beyond Administrative Costs: A Better Way to Judge a Charity

As a program officer, I can remember the hours of sitting with our grants committee reviewing proposals. It seemed that we always spent a large amount of time reviewing each applicant’s budget and other financial information. How I would have loved to include Jack Shakely’s LA Times editorial, The Worst Way to Judge a Charity, in the committee’s orientation process.

As Shakely explains, “Low administrative costs could indicate prudence and sound judgment at a charity, but they could just as easily indicate inadequate staffing, insufficient salaries or, shall we say, fudging.” His well thought-out arguments, I am sure, would have helped the grants committee members understand that the numbers do not tell the whole story.

This article is a great jumpstart to a larger conversation about how we can effectively evaluate organizations and their successes, especially when we have limited or no staff.

The three things that make a great organization are leadership, staff, and the right culture.

• Leadership: The board and executive leadership should be visionary, clear, optimistic, and engaging — meaning the leadership makes you want to get involved.
• Staff: Employees should be knowledgeable about the organization and its mission, be passionate and smart about their jobs, understand both their role in the organization and its mission, and be committed to making a difference.
• Culture: Activities should support an organization’s values and be positive, focus on problem solving and outcomes, and build on individual and community assets.

The best way to get to know an organization is to spend time with the board, executive leadership, program staff, and other constituents. If you walk away changed from the time you have spent with an organization, be it in person or over the phone, then you will know, intuitively and rationally, that this is a good organization to support.

Practically, it is not always easy to meet face-to-face with an organization and its people. Luckily, technology has made this process easier. I always begin my research with an online search. I do not only visit the applicant’s website, but also search for press articles, client and donor reviews, and stories done by other funders or community partners.

I always conduct interviews via the phone or, if appropriate, through video conference call. During these conversations, I listen to what the person is saying as well as how they say it. Their tone, words, and level of enthusiasm will usually help me identify the passion, commitment, and culture of the individual and/or organization.

In addition, I have found that calling other organizations doing similar work in the same community can garner important information. Finally, some of my best reference checks of an organization have been my own colleagues: other funders, the local United Way, and local community foundations.

This may sound like a lot of work. But this process, I assure you, will increase your knowledge, understanding, commitment, and passion to your foundation’s mission.

Patricia Sinay is the founder of Community Investment Strategies, which supports national and international foundations, nonprofits, and governments to connect their passions to actions that result in positive outcomes.