Evaluating Non-Profit Organization
The task in this section is to reflect on our experience of evaluating non-profit organizations. Consider the selection and application of the criteria we used to compare and decide between two organizations organizations with similar goals. I will attempt to address if the criteria we applied was indeed helpful when evaluating the chosen non-profits, if there were any elements in the analysis that surprised us in the evaluations, and if we were to perform this analysis again, how would we modify or change the criteria we applied.
The first step is to evaluate and reflect on the criteria we have chosen by which we evaluated the two non-profits we have selected for comparison. Our intent was to identify the main elements to consider when evaluating these types of organization and identify key performance indicators by which we can compare and evaluate the organization’s performance. In this approach we selected to compare their mission and goals, the allocation of funds in management salaries and fundraising activities as a KPI, and the accountability process they have in place that provides transparency to their stakeholders.
The first KPI selected and applied was Mission and Goals.
This indicator proved to be subjective from a quantitative perspective as it only describes what the non-profit stands for and does not provide a numeric proxy by which we can determine if one is better than the other one. However, I believe this indicator highlight the clarity and orientation of the organization and what are the values they stand for.
The second KPI we utilized is the allocation of funds to management burden and fundraising activities.
In this case, the quantitative analysis proved to be effective to determine which organization is more efficient in managing their activities. The surprise was not being able to find a good breakdown of the subsequent allocation of funds to other programs (smaller or local non-profits) these organizations sponsor down the line. It appears that they function as an umbrella organization that support other smaller organizations that actually execute and perform the plans drawn out by the non-profit. This is concerning to me because it could hide many of secondary management costs that are no readily available for the stakeholders to evaluate and verify. It would demand a complete breakdown, line by line, of each of the organizations they support and how those organizations are structured applying the same criteria.
Finally, transparency was the big surprise. My expectation from a non-profit organization of the caliber of the two selected was to find a clear accountability process in place and an open communication process with stakeholders and other potential contributors.
TRANSPARENCY = TRUST
I was surprised not to find a clear accountability process in either of the organizations evaluated. I believe this is a key element of the evaluation of non-profit organizations. Without a clear accountability process beyond the audit of financial statement and taxes, the organization can raise doubts as to how and where they allocate the contributions of their donors. It is necessary for a non-profit to give a voice to the stakeholder and provide an environment for them to ask the tough question and receive the necessary answwers.
The criteria selected was indeed helpful to compare the two non-profits. In a second approach, I would still use the same criteria, this time using more thorough evaluation of their management and fund raising activities before I would chose one over the other one. Finally, when applying the transparency criteria, I would like to request each individual organization to provide their accountability and communication protocols with stakeholders. Only when we have these information we can perform an effective analysis of the non-profits and decide which one should we support.
