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How do you evaluate a charity?

January 22, 2011

In our many conversations and emails with South Asian donors, there is no real consensus on how we as a community evaluate charities in terms of our own giving.  This is a major point of potential activity for SAPP – there seems to be a real need for donor education and information about how to choose where to give.  What kinds of activities, information, events, or educational programs would you like to see from SAPP? What kind of information would help you make better decisions as a donor?

Three articles this month have addressed issues of evaluating charities and their efficiency:

  • How to Evaluate a Charity at Tactical Philanthropy – Sean asks three basic questions to evaluate any charity:  What does the organization do?  How do they do it?  How do they know if they are making a difference?
  • How Efficient is Private Charity? in the NYTimes – Princeton economics professor Uwe Reinhardt analyzes whether charities are more efficient that government and concludes (not surprisingly) that it depends.  Near the end of the article he describes ways that donors can “know the angels from the Scrooges” in terms of which charities are actually doing good works and which ones are squandering their resources.
  • Give Smart: 25 websites to learn a charity’s effectiveness & efficiency by Trista at New Voices of Philanthropy – Trista lists 25 key resources to help research a charity on a variety of metrics.  (She cites Joseph who mentions an IRS 35% rule on overhead by charities – does anyone know what this rule is?)
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