Evaluating Charities for ImpactBenchmarks of Highly Effective Charities

Gena Rotstein, FEA, MACEO & Advisor in Philanthropy gena@dexterityconsulting.ca

www.dexterityconsulting.ca www.place2give.com

About DVI and Gena Rotstein

Vision

“To make charitable giving a part of every person’s banking

and financial management experience and positively

influence $1Billion in charitable transactions.”

Integrating Philanthropy Planning with Wealth Management

About Dexterity Ventures Inc. & Gena Rotstein

Personal and group values shaping charity evaluation

Evaluating the Social Impact

If we have time…Non-traditional "philanthropy“

How do I know What Most Needs Doing?

Benchmarking charities for impact and effectiveness

What is Philanthropy? Love of mankind

A financial transaction predicated by moral response to a social dilemma

As a phenomenon, philanthropy is actively practiced throughout the world through voluntarily giving of time, talent and resources in support of the common good (Wagner et al, 2003, p 442)

What is Strategic Philanthropy? The process of identifying what you want to see

society look like, and using philanthropy as one of the tools for achieving that vision

The Charitable/Philanthropic Plan is the coordinated steps in achieving the vision

Picture Card ActivitySmall group acitivty

What Most Needs Doing?Collective Impact

Source: Collective Impact – Kramer, FSG Consulting

D-Rev - Mulago Foundation

“Greatness has more to do with how non-profits work outside the boundaries of their organizations than how they manage their own internal operations.”

~ Forces for Good

“High impact non-profits work with and through organizations and individuals outside themselves to create more impact than they ever could have achieved alone. They build social movements and fields, they transform business, government, other nonprofits, and individuals; and they change the world around them.”

~ Creating High Impact Non-Profits

What Makes a Great Non-Profit?

A Diversified Portfolio to Drive Social Change

Social Issue

Investments – Shareholder

Activism, Private Equity,

Traditional

Philanthropy – Annual giving,

multi-year financing

AdvocacyVolunteerism

Vendors/Suppliers

Charities & Non-Profits

Social Investing

Social Return on Investing

Social Entrepreneurship

Social Finance

Social Capital

Shared Value

Collective Impact

Social Innovation

Social Impact Bonds & Community Impact Bonds

Patient Capital

Co-Operatives

The Social Profit Sector

What Role Do You Play? Donation advisor

Vetter of options

Transactional

Solution creator

Asset manager (Investment committee)

Sponsor

Participant

Consumer

Connector

Donor Profiling – Creating a Strategy for Giving

• Leadership• Program Implementation• Community Engagement• Volunteerism/HR• Governance (policies &

procedures)• Funding & Financials

Source:

Benchmarks for Evaluating Charities

What to look for? Program Implementation

Capacity to report on long term effectiveness

What is success?

Volunteerism/HR Hiring policies Staff & Volunteer turn-over

Financial Management/ Fundraising Overhead Operational

Effectiveness Diversified funding portfolio

Leadership Qualifications History & Connectedness Board engagement

Governance Strategic v. Operational Board Policies to protect donors and

clients

Community Engagement How do they work with others in

their industry? Media

Governance & Leadership

Serve & Advocate What to Evaluate Strategic Direction

Financial Oversight

Ethical Fundraising

Policies & Procedures

The role of the board is to drive the direction of the organization, represent the needs of society, and steward the donors’ interests

Community Engagement

A community is defined not only by the geographic but by those individuals and groups that are within. A great charity has strong, positive relationships within its defined community.

Competitive Analysis

“Creating Evangelists”*

*Creating High Impact Non-Profits, SSIR

Program Implementation

Plan, Execute, Adjust

How resources are being allocated in order to achieve the mission

How the organization fosters exploration, experimentation, growth and solutions to the mandated problem.

Effectiveness = Time of your donation + Amount Needed

HR/Volunteerism A use of human capital

(talent and ties) to offset HR and admin costs

Ties financial contribution to time contributions

Policies & procedures are aligned with the values and mandate of the organization

Financial Management

The last sign of an organization in crisis is usually seen in the financials.

The Canary in the Mine

Questions to AskGroup discussion

Governance & Leadership6. What is the composition of the

board? How long are their terms?

7. Are conflict of interests publicly stated?

8. Policies & insurance to protect assets

9. Are conflict of interests publicly stated (i.e. investments are being held by the firm of a board member)?

10. What is the ED evaluation process?

1. What is the strategic direction and who is managing it (board make-up?

2. Is the board managing the budget & key financial transactions? (Chair, Treasurer and CEO different people)

3. Have they filed their annual return with the IRS or CRA?

4. How often does the board meet? Do you feel that it is often enough? GUT CHECK

5. Privacy statement

Admin/OperationsWhat is Good Management?

Management team

Volunteer team

HR Policies & Procedures

Shared Leadership

1. Are the right people sitting in the rights seats on the bus to drive the operations?

2. Whistleblower policy?3. Does the salary policy create

a cycle of poverty within the organization? Is it competitive with the marketplace?

4. Is there a business plan?5. Are the opportunities for

professional development?6. Are staff appropriately

trained?

Financial ManagementHow do I evaluate Financial

Management? Know the marketplace

Donor Bill of Rights

Report on Financial Activities

Investment policies

What are the liabilities?1. Are there public policies on

expense reimbursements?2. Who manages the investment

assets? Are all the investments with one firm/broker?

3. How much of the operating budget is spent on program delivery?

4. How long does it take for the donated funds to “hit the ground”?

5. Who is doing the fundraising?

Community EngagementHow to measure public perception

Inspires others to get involved

Creating strong networks with other non-profits

Strong relationships with media

1. Which companies have affiliated their brand with this organization?

2. What other charities are working with the organization that you support to address the issue that is mandated?

3. How has the organization been represented in press (unpaid)?

4. Who are the major donors and how are their donations being leveraged?

5. How are community members engaged in the organization?

Program Implementation:Is my money working?

People

Capital

Infrastructure

Innovation

1. What is the funding ratio (private foundations – government – corporate – individual donors – fee-for-service)?

2. What is your commitment to investing long-term?

3. What is your commitment to investing in overhead?

4. What is the process for measuring success? Does the organization have the ability to learn from failure and adjust?

5. What does success mean to you?

Donor Bill of Rights

Charter of Ethical Fundraising

Philanthrocapitalism

Giving 2.0

Giving Well

The Art of Giving

End of Fundraising

Impact Assets

Uncharitable

The Creative Class

The Blue Sweater

Soul of a Citizen

The HIP Investor

Harvard Business Review, Stanford Social Innovation Review

Blogs: DexterityConsulting.ca Philanthropy.com SocialFinance.ca

Resources & Book List

Contact informationGena Rotstein1-866-936-4483403-860-7572grotstein@dexterityventures.com @Place2Give @DexterityConwww.dexterityconsulting.ca www.place2give.com

Non-Traditional PhilanthropySocial Impact Bonds, Community Impact Bonds, Co-Operatives, Patient Capital

For Profit Social Enterprise

Village Capital* Private equity placement in

local social businesses

Co-Ops

Patient Capital

B-Corps

Community Economic Development/Social Biz Investments (BC, MB, NS)

L3C’s (US)

Crowdfunding: Awesome FoundationThe power of the crowd

Micro-Lending