ProSpeak: What Americans Really Need to Know About Charities
2. Are we growing? Just as growth is one measure of the effectiveness of a corporation, so it is with a charity. Growth is often an indication of dynamism, vision, effective leadership and success.
3. Do we spend enough of our revenue on programs? A thriving charity should spend most of its revenue on the programs it purports to conduct because that's why donors give in the first place. But how much is the right amount? That depends on a number of factors including where the organization is in its life cycle (a new organization vs. a more mature charity vs. an organization in growth mode), what types of donations account for the bulk of revenue (e.g., small gifts, monthly pledges, large gifts, legacy gifts, gifts in kind) and what it needs to accomplish its objectives (e.g., hundreds of thousands of members to actually accomplish its advocacy goals).
A healthy, midsize charity in a strong growth mode that has a diversified development model across direct response, major gifts, gifts in kind, and foundation and government funds that designates 60 percent of its funds to program could be far more effective than a charity that is not growing and depends only on one or two sources of revenue, yet puts 75 percent of its income to program.
4. Do we invest enough in management and marketing? Strong management and marketing contribute to the effectiveness, sustainability and long-term impact of a charity. Skimping on either management or fund development is short-sighted and ineffective.
5. Do we adhere to the highest ethical standards? Is there an independent board providing governance and oversight? Is there an outside financial auditor? Are there written ethical guidelines for management and staff? Is there public access to financial data?
By many measures, Americans are the most generous people on earth. These otherwise practical people regularly give away their hard-earned dollars to assist people who are less fortunate and to address social issues of importance.