by Catherine Chapman, Founder & CEO, Fullanthropy

As a prospective donor, identifying one or a few causes that ignite your passion can be challenging. With almost one million public charities in the US, there is no shortage of nonprofits seeking donors to make a contribution. Determining which organizations will steward your money wisely and enable you to make the most impact with your gift can be overwhelming. Beyond the large nonprofits that are often rated and ranked by philanthropy watchdogs such as Charity Navigator, Guidestar, and the Wise Giving Alliance, there are qualifiers that you as a donor can review to determine the best of those seeking to do good.

1. Great nonprofits should be focused on a clear purpose.

A nonprofit’s mission statement defines the reason that they exist and the proposed positive impact that they have on the community that they are serving. If the mission statement is unclear or even worse, not followed, then the nonprofit is essentially violating their reason to be.

Questions to Ask:

Does the nonprofit have a clearly defined mission that aligns with the actions that they are taking? Does that mission align with the vision and their goals? Do they have a strategic plan that acts as a roadmap for achieving their mission and vision? Is that mission clearly communicated by their board members and in their marketing materials?

2. Great nonprofits must create meaningful impact.

Doing good work is simply not enough. Great nonprofits must create lasting change for their clients and the community through the services that they offer. Not only should the details of their activities be monitored such as time spent with clients, services rendered, etc., the results of those activities such as the way the clients lives have been transformed should also be documented in the form of outcomes.

Questions to Ask:

Is the nonprofit making progress towards its goals? Does the organization have an outcome measurement system? Is that system based on generally approved outcome measurement systems like those used by the government and United Way? How do their benchmarks compare with other nonprofits serving a similar population? Do they use anecdotal information as well as their raw data?

3. Effective nonprofits should be relationship-driven and accountable.

Trust is the cornerstone for any successful nonprofit. Trust requires strong relationships with others, accountability, and integrity. As a donor, you want to be appreciated for your contributions, respected as a partner in the provided solutions, and know that your funds enable the nonprofit to achieve goals that you both value.

Questions to Ask:

Does the organization answer my questions promptly, efficiently, and truthfully? Do they value me as more than a checkbook? Am I treated as a valued partner with a thank you beyond a form letter? Do staff treat everyone- clients, other staff, volunteers, etc. professionally and courteously?

4. Strong nonprofits demonstrate committed and formidable leadership.

Leading a successful nonprofit requires tenacity, flexibility, enthusiasm, and unwavering commitment. These qualities are essential to both paid and volunteer leadership. Just as the navigation of an airplane depends on the abilities and instincts of the pilot, a nonprofit is only as strong as its board and staff leadership.

Questions to Ask:

Are staff and volunteer leadership competent? Are staff compensated adequately based on responsibilities? Who serves on the board, and what are their qualifications? How invested is the board in achieving the nonprofit’s success? How much does the board give the organization annually in aggregate?

5. Sustainable nonprofit organizations manage their finances according to business practices.

Finances in a nonprofit organization are almost always a delicate balance between the organization’s and funder’s goals; revenue and expenses; fundraising and conservative spending; and mission and opportunities outside the mission. Nonprofits that achieve sustainability find ways such as social enterprise and strong fundraising to constantly bring in revenue, so that they can remain true to their mission and not constantly or randomly chase dollars.

Questions to Ask:

Are finances/budgets appropriate to accomplish the mission? Has the organization been audited, or had an independent review by an accounting firm? Are controls and policies in place to prevent embezzlement or fraud? Is the organization GAAP compliant? Are there multiple revenue streams? Does the organization have multiple funders so that no one funder is primarily supporting the organization?

The questions and categories above provide starting points to evaluate the nonprofit organizations that you are considering supporting. They are in no way exhaustive. The very best way to decide if a nonprofit is worthy of your donations is to trust both your head (does this make sense as a business decision) and your heart (do I believe that this organization is making the difference that I want to make). When you do that, it is highly unlikely that you will make a misinformed or bad decision.

Catherine “Katie” Chapman is the Founder and CEO of Fullanthropy. Catherine works with donors, including many entertainers and athletes regarding their charitable endeavors. She has more than 15 years experience in the nonprofit sector and possesses a Master’s Degree in Philanthropic Studies. Fullanthropy is part of AEF’s Philanthropic Advisory Firm Referral Program.