whythawk ratings: measuring effective development

Smart donors should consider the following points before deciding whether or not to make a donation to any development organisation:

1. Be Proactive In Your Giving
   Smart donors generally don't give reactively, responding only to the first organisation that appeals for help. Take the time to identify which causes are most important to you and your family. Be specific about the change you want to affect. For example, don't just support generic HIV charities, but instead have targeted outcome goals for giving, such as providing anti-retrovirals to at-risk women in your community.
2. Eliminate The Middleman
   Recognize that for-profit fundraisers, those primarily used in charitable marketing campaigns, keep 25 to 95 cents of every Rand they collect. Never give out your personal information - like credit card accounts - over the phone. If you like what they hear about an organisation being promoted then investigate the charity directly and send your contribution straight to them, thereby cutting out the middleman and ensuring 100% of your donation reaches the charity.
3. Be Careful Of Imposters and Sound-Alike Names
   It is easy to be confused by charities that have deceptively similar names to others. How many of us could tell the difference between an appeal from the National Cancer Center and the National Cancer Coalition? Their names sound the same, but their performances are vastly different. Take the time to uncover the difference.
4. Check that they're real charities
   Don't drop money into cans at the checkout counter or hand over cash to solicitors outside the supermarket. Situations like these are irresistible to scam artists who wish to take advantage of your goodwill.
5. Check The Charity's Commitment To Donor's Rights
   Giving to charity shouldn't be a one-sided relationship. It should work more like a partnership. Seek out charities that want partners and not merely donors by checking if the charity has a donor privacy policy whereby the organisation promises to never sell or trade your contact information
6. Obtain Copies Of Its Financial Records
   The financial health of a charity is a strong indicator of the charity's programmatic performance. The most efficient charities spend at least 75% of their budget on their programs and services and less than 25% on fundraising and administrative fees. A charity's ability to sustain its programs over time is just as important as its short-term day-to-day spending practices. Therefore, seek out charities that are able to grow their revenue at least at the rate of inflation, that continue to invest in their programs and that have some money saved for a rainy day. A charity's willingness to send the documents is a good way to assess its commitment to transparency.
7. Review Executive Compensation
   Charities need to pay their top leaders a competitive salary in order to attract and retain the kind of talent needed to run a large organisation and produce results. But don't just take the CEO's compensation at face value; benchmark it against similar-sized organisations engaged in similar work and located in the same region of the country. Put the CEO's salary into context by examining the overall performance of the organisation. It is better to contribute to a charity with a well-paid CEO that is meeting its goals than to support a charity with an underpaid CEO that fails to deliver on its promises.
8. Start A Dialogue To Investigate Its Effectiveness And Results
   Although it takes some effort on your part to assess a charity's effectiveness and impact, if you are committed to advancing real change it is worth your time. Before you make a contribution, talk with the charity to learn about its accomplishments, goals and challenges. Walk away from any charity that is unable or unwilling to participate in this type of conversation.
9. Concentrate Your Giving
   When it comes to financial investments, diversification is the key to reducing risk. The opposite is true for philanthropic investments. If you've really taken the time to identify a well-run charity that is engaged in a cause that you are passionate about, you should then feel confident in giving it a donation. Spreading your money among multiple organisations not only results in your mail box filling up with more appeals, it also diminishes the possibility of any of those groups bringing about substantive change as each charity is wasting a large percentage of your gift on fundraising and overhead expenses.
10. Share Your Intentions And Make A Long-Term Commitment
    Support your favourite charities for the long haul. See yourself as a partner in the charity's efforts to bring about change. Only with long-term, committed supporters can a charity be successful. And don't hesitate to tell the charity of your giving plans so that the organisation knows it can rely on the you and the charity doesn't have to waste resources and harass you by sending numerous solicitations.

 This content is customised for South Africa from the original at US-based Charity Navigator