Choosing where to donate your time or money is, for a Christian, a key part of the responsibility to steward God’s resources well. A good steward works to make sure those resources are used for a worthy purpose—and used effectively.
Not all of the 1.8 million registered nonprofit organizations in the U.S. can be equally effective. What can you do to ensure the resources you donate are really making a difference in furthering God’s kingdom?
Look at Impact Reports
Impact reports are designed to keep donors informed about the nonprofit’s work and results. You may find a nonprofit’s impact reports on their website or by request. As you read through the facts, figures, and stories, here are a few things that you can look for to understand whether the organization is truly effective.
1. Measuring impact starts with measurable goals.
Just like a for-profit business, a nonprofit should have clear, measurable, and attainable goals for their work.
These goals should align with the nonprofit’s mission statement. A mission statement tells you what problem the nonprofit would like to solve; their goals provide a roadmap to get there. For example, if the mission is to improve literacy in a community, their goals may center on the number of children or adults taught to read each year.
A nonprofit might directly state their annual or quarterly goals, or you may need to explore their website. Analyzing which numbers they report will also help you identify the organization’s goals.
2. Real impact is about outcomes.
The impact report should show you results, not just activities. Is the nonprofit really effective in solving the problem, or did they just put in a lot of effort with little benefit? Have they improved the lives of the people they serve? Do those improvements last?
Look beyond the inputs you see listed in any impact report. It might be interesting to know how many reading clinics the nonprofit held or how many books they distributed, but those numbers do not show whether students actually benefited from these resources.
Instead, look for outcomes—over time, if possible. For example, after participating in the nonprofit’s programs,
- How many adults improved their reading comprehension, and how was that measured?
- How many teens scored “proficient” on reading exams?
- How many children retained their reading skills over summer vacation?
These results demonstrate the impact that matters: real, positive change in the lives of the people served.
3. Real impact makes people better off.
The nonprofit should also help you understand the counterfactual: what could have happened without their intervention? If the work is effective, the people served should be better off than they would have been otherwise.
It can be hard to measure this. One way is to compare the nonprofit’s reported impact against regional statistics. For example, if the nonprofit reports that 50% of their students scored “proficient” on a reading exam, that may sound disappointing—until they also tell you that only 25% of nearby students scored “proficient.” This means their programs probably did make a meaningful difference in the lives of their students.
Another way to see the counterfactual is to just ask. Some nonprofits survey their clients to ask whether they feel better off. Questions focused on felt impact can be particularly powerful:
- Did this program help transform your life for the better?
- Did the staff treat you with respect?
- Have you recommended the program to others?
Measuring nonprofit impact through “customer satisfaction” is not terribly common, but it is a useful complement to traditional data.
4. How does the charity communicate?
Finally, how often do you want to hear updates about a nonprofit’s impact? If you like to receive quarterly progress reports, you may not feel comfortable donating to a nonprofit that only shares its numbers once per year.
As a donor, feel free to seek the level of communication you want. Impact reporting is a key part of your partnership with any nonprofit. One donor to The Signatry, Trey Cushman, describes how he found a nonprofit that goes above and beyond to keep him up to date:
“We know where [our dollars] go. We know the mission that we’re giving to … and we know what the campaigns are. We know the families we’re impacting. … I know because they were emailing me, telling me exactly what they’re doing, what the projects look like.”
Refine Your Choice Over Time
If you are choosing which nonprofits to support, you can start by donating to several and seeing what impact they report to you. “You can see what happens with that money,” suggested Richard Baxter, another donor to The Signatry.
“Did you hear back from them? How many churches were planted? How many disciples were there? … What kind of water well [did they dig]? … And then when you hear back from them, you know who to give more to, because you can see … these people, they’re doing something good with the money. That’s kind of how we figured out how much to give and where. And obviously with prayer.”
Generosity is a journey, and giving wisely is a learning process. As you give to different organizations, you will learn how to identify the kind of impact you care about most and, over time, prayerfully hone your strategies for generous stewardship.
Five Other Questions to Help You Choose a Charity
Measurable impact is just one component of an effective nonprofit. Find five more qualities to consider before you make a donation.Blog: 6 Questions to Ask Before You Give