With 1,3 million charitable organisations in France alone, selecting the right charities for your foundation or fonds de dotation to support can be a daunting task. As a philanthropy advisor dedicated to effective giving, I understand the importance of making informed decisions when it comes to charitable contributions. This article aims to provide your foundation with a few tips for selecting charities, thus ensuring that your contributions have the greatest possible impact.
Choosing a Charity to Donate to - are Your Foundation's Values and Goals Clear?
The charity selection phase supposes that you have already done a fair amount of preparatory work. For example, you have clarity around your foundation's values and philanthropic goals. You have chosen your area of focus (i.e. education, healthcare, environmental conservation, poverty alleviation, or perhaps animal welfare), and know the size of charity you want to support (for example early start-up charities that may be testing a new approach, or a larger national or international non-profit). You know your geographic focus (local, national, international), and how you find your future charities: by RFP, scholarships and awards, or via your own research.
Selecting the Right Charities for your Foundation to donate to.
So. You’ve identified your values, objectives, selection criteria and support methods and timeframes, and you have before several possible donation candidates. How do you choose?
Mission and Vision: Review the charity’s mission and vision statements to ensure they align with your foundation's values. Be careful not to judge a charity by their website alone – smaller organizations may not have the funds to have a well-designed site, or glossy annual reports, but that doesn’t mean they aren’t skilled in their mission delivery. Look beyond the format and focus what is being said.
Programs and Impact: Examine the programs and initiatives the charity undertakes. Are they making a measurable impact in their field? Who are their partners? Look for organisations that provide evidence of their successes and the outcomes of their work. Consult with other foundations that have supported them and ask them to share their experiences.
Leadership and Governance: who is the founder or leader of the organization? Who are the team members? Human resources are at the heart of any charitable project – and quite often the only resources for very small structures. What experience do they bring, how does that impact the way they approach the issue at hand? Ask the same questions for the board members. And last but not least – can you bring value to their work over and above your donation?
Transparency and Accountability: Charities are required to be open about their operations and finances. Look for their annual reports, audited financial statements, and detailed information about their programs and impact. If not included on their website, you can ask them to send these items to you. Or you can check online governing bodies for copies (for example in France the le Journal Officiel).
Evaluating Charity Efficiency and Effectiveness
Efficient use of resources and effectiveness in achieving goals are critical factors in selecting a charity. Here are some important things to consider::
Administrative and Fundraising Costs: this one, much to my chagrin, tends to rear its head on a regular basis. Overhead. While it’s necessary to understand how they are spending, it’s also important to understand that for a non-profit and their teams to be effective, investments are needed. You wouldn’t invest in a business that didn’t invest in its staff and infrastructure, so why do we hold charities to a different set of rules? Why is social impact less worthy of our funds? We live in an inflationary world; for charities to be efficient and impactful they need to cover administrative and fundraising expenses, necessary to the survival of their work. While yes these should be reasonable, 30% running costs isn’t an unreasonable amount. And yes, your donation should be allowed to pay for those costs.
Impact Measurement: While larger charities will likely have systems in place to measure and evaluate their impact, for smaller charities it’s just too expensive to pay for outside consultants. Look for organizations that have identified the elements needed to assess their programs and make improvements. Ask for reports if they exist (often they are readily available), and if they don’t have them ask why not, and consider funding that work.
Sustainability: a non-profit with a sustainable model is clearly going to be able to maintain their work in the long term. This includes diverse funding sources, such as grants, donations, and partnerships. However, don’t forgot to look at your foundation’s role in this. Finding funding is getting harder and harder for charities. Don’t set aside a charity just because they’ve come up with a budget shortfall. Look at all the factors and see if perhaps a multiyear donation from your foundation can’t be the solution to getting them back into a place of stability.
Conducting Due Diligence
Before making a final decision, it’s essential to conduct due diligence. This involves verifying the information you’ve gathered and ensuring the charity eligible to receive donations. Most importantly, you should trust the charity’s staff and representatives.
Verify Tax-Exempt Status: Registration bodies and charitable status terminology varies from country to country (in the US it’s a registered 501(c)(3) organisation, in France it’s a “general interest organisation” registered under the “Loi 1901, in Belgium the “Loi du 27 juin 1921” modified by the “Loi du 2 mai 2002”. Check with your local governing bodies to confirm their status.
Visit the Charity: in my opinion this is the most important evaluation tool. The best way to understand and see if there is a good fit is to spend time the charity and beneficiaries. Seeing their work firsthand can give you a better understanding of their operations and impact. It is also the best way to launch a transparent and productive relationship throughout the funding process should you choose to support them.
In Conclusion
Selecting a charity to support is a major decision that requires careful consideration and evaluation. By understanding your foundation’s or fonds de dotation’s values and goals, conducting thorough research, evaluating efficiency, effectiveness and fit, you can ensure that your contributions make a meaningful impact – for the charity AND for you, your foundation and your family.
As a philanthropy advisor, I believe that informed and strategic giving can drive positive change and create a better world for all. Should you have any questions or require some help with the selection process don’t hesitate to reach out.
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