What Makes a Good Charity?

Good charity analysis is one of the key ways to review and improve performance, and allow funders to better understand where to put their money to achieve maximum impact, according to a new step-by-step-guide by UK think tank, New Philanthropy Capital (NPC).

NPC’s latest free publication, What Makes a Good Charity, is split into four key areas: purpose, impact practice, people, and finance and operations.

“In the guide we explain why each area is important, the key questions to ask and what to look for in order to reach a judgement about an organisation’s effectiveness,” NPC chief executive Dan Corry said.

“It also helps charities themselves improve and so deliver more of the social and other outcomes that they are set up to achieve.”Corry said that since NPC published its first guide in 2010, the environment for charities has changed.

“We have seen the growth of new forms of finance, the shift, for many charities, from grant funding to contract delivery, ongoing demographic and societal changes, digital technology opening up new possibilities and a charity’s’ public benefit no longer being taken as read,” he said.

“Recent scandals and problems have brought a renewed focus on governance. What it takes to be effective as a charity in this environment has evolved and that evolution is reflected in this guide.

“We place a greater emphasis on the involvement of people using the charity, as well as on organisational culture, in supporting effectiveness. The need for organisations to be able to adapt and respond to change is greater.

“In our recent work we have explored how successful charities are embracing digital technology and the idea of ‘systems change’ as a way to tackle the root causes of complex problems. These ideas, too, have informed the development of this new guide.

We believe that analysis can help charities to improve. It can help funders to identify charities’ strengths and weaknesses, and make decisions about how to allocate resources. It can help charities to assess their own performance and make improvements to their organisation.”

The NPC guide also includes an assessment grid to summarise what “good” looks like for each of the four key areas and a blank template for notes as participants work through the guide. A separate assessment grid template can be downloaded and printed.