Identifying effective nonprofits begins with clarity about your goals and values. As a donor, focusing on the impact you want to achieve can help you find organizations that align with your mission. By honing in on your priorities, you can support nonprofits that share your vision and help them advance the work you care about most.
To guide your decision-making, start by reflecting on these key questions:
- What are your values?
Understanding your core values can shape the types of organizations and approaches you’re most passionate about supporting. - What do you want to achieve?
Consider your goals for giving, volunteering, or using your skills and experience. What impact do you hope to make in your community or the world? - At what level do you want to create change?
Think about where you want to focus your efforts—whether it’s individuals, organizations, networks, policies, or big ideas.
5 Characteristics of Effective Nonprofits:
Finding effective nonprofits isn’t a matter of chance—it’s about identifying qualities that enable organizations to deliver meaningful, lasting impact. When you understand what drives a nonprofit’s success, you can align your support with groups that share your goals and values. This ensures your time, energy, and resources make the greatest difference.
Here are five characteristics to look for when evaluating nonprofits:
1. Clear Mission & Purpose
Effective nonprofits are crystal clear about their mission—what they aim to achieve and why it matters. They communicate this mission consistently to board members, staff, donors, volunteers, and the public, ensuring alignment and focus.
These organizations also document the need for their work and demonstrate the value they bring. For example, a human services nonprofit should explain how its programs fill critical gaps, while an arts organization should highlight how it enriches its community.
2. Strong Performance Across Key Functions
According to How Effective Nonprofits Work: A Guide For Donors, Board Members, and Foundation Officers by Marcia Festen and Marianne Philbin, effective nonprofits excel at these key functions:
- Clearly communicate their vision and mission.
- Engage stakeholders, including program users, in designing and delivering services.
- Track and achieve results through key measures, even with basic tools.
- Maintain an active and informed governance structure.
- Secure resources that meet operational and program needs.
- Plan for the future to ensure sustainability.
Festen and Philbin also stress the importance of creating a culture of learning. Effective organizations regularly refine their programs and practices by incorporating stakeholder feedback, assessing impact, and staying informed about new developments in their field.
3. Strong Practices, Procedures & Policies
Successful nonprofits adhere to best practices in finance, governance, and program development:
Financial Management
- Conduct yearly audits or provide IRS Form 990s (available via platforms like GuideStar).
- Maintain clear financial statements and solid fiscal management processes, such as monitoring cash flow and budgeting.
- Diversify funding sources and aim to establish reserve funds covering 3–6 months of operations.
Governance
- Ensure strong leadership and an informed, engaged board.
- Implement clear policies, such as board term limits and conflict-of-interest guidelines.
- Regularly evaluate programs and fundraising plans, and schedule board meetings consistently.
Organizational and Program Development
- Have and use a strategic plan, revisiting it annually.
- Actively involve clients and constituents in planning and evaluation.
- Demonstrate measurable outcomes and maintain a reputation for collaboration and excellence.
If you’re considering supporting a newer organization you admire, keep in mind it may still be developing some of the practices, procedures, and policies outlined above.
4. Skilled and Engaged People
People are the backbone of every nonprofit. Effective organizations recruit skilled and diverse board members, staff, and volunteers who are committed to the mission.
They also invest in their people through training, support, and appropriate compensation. Recognize that nonprofits with well-supported teams often achieve greater impact, even if their efficiency metrics (e.g., program expense ratios) don’t immediately reflect this.
See Exponent’s “Investing in Nonprofit Leaders” Primer »5. Ability to Mobilize Others
Effective nonprofits build connections to drive change, collaborating with:
- Volunteers and constituents as advocates and partners
- Other nonprofits as allies, not competitors
- Businesses to extend influence and resources
- Government to advocate for policy change
Effective nonprofits have the qualities needed to turn vision into impact. By supporting organizations with these key characteristics, you can help drive meaningful change and achieve your philanthropic goals. Thoughtful investments in well-run nonprofits expand their ability to strengthen communities and create lasting results—making your giving truly count.
Further Resources for Effective Foundation Management
Looking for more guidance on managing your foundation? Check out these resources:
- Foundations 101: Introduction to Philanthropy and Foundation Administration – A virtual seminar covering foundation essentials and best practices for effective administration.
- The Foundation Guidebook – A comprehensive resource tailored for lean foundations, offering practical tools and insights to enhance your operations and philanthropy.