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Measuring Charity Effectiveness and Success

Measuring Charity Effectiveness and Success

This is an editorial on the challenges of deciding whether a charity is effective

This is an editorial by Andrew Cates, CEO of SOS Children UK

Yesterday I was interviewed by someone studying for an MBA about the challenges of measuring success and effectiveness as a charity. It was an interesting conversation which I enjoyed and I thought I might discuss some of the points we covered here.

Keeping administration & fundraising costs low

The first bit is easy: money being spent on administration and fundraising is money not being spent on the charitable objectives and measuring these is a bit obvious. So last year SOS UK raised £9.3mLE and spent say 11% on administration and fundraising. As an internet charity we do very well on low "wasted" costs, because we do not need to spend on junk mail and TV adverts. But obviously that is not the end of the story. We spend quite a lot of effort researching what to do in given situations (for example, looking in each location at the root causes of children ending up "on the streets" and tackling each according to the specific reasons). Stopping that research might make head office numbers better but clearly it would make the programs less effective.

Deciding your objectives is key

In most aspects of life is possible to succeed simply by being unambitious in what you wish to achieve. Equally in the charitable sector both donor and charity need to decide what you wish to achieve before you can really decide whether your spend has helped achieve it. To decide what you are trying to achieve in broad brush terms is not necessarily straightforward but I thought I would have a go at characterising developing world charities.

(1) There are charities whose aim is specific and narrow:

SOS Children would come into this category: our vision for 2016 is to give one million children who would otherwise be alone a family life instead. That's 100,000 whom we will bring up in a family and 900,000 whose homes are still just viable whose families we will strengthen and keep together. We can talk about why we think family life is important to children (and there are lots of statistical reasons for thinking the children will be much better off, live longer, achieve greater financial independence, be happier etc as a result) but really that's post hoc justification for doing something which we and our supporters knew made sense from the outset. We can (and do) interview children at independence, three years later and five years later to learn and improve how well we look after them but, at the heart of it, knowing "children need mothers and families" is almost a dogma for us. And we achieve what we set out to do. 

Other charities have quite specific and narrow targets. If your target is "improving knowledge of child rights" in a country it is possible to measure whether you succeed. And if you limit your target to improving knowledge without caring whether that means the rights are more fulfilled or simply expectations are raised to be dashed it is easy to succeed. 

Equally, if your target is to improve the quality of lives of old people in a country then this can be measured. This is an example where there may not be economic benefit to the country as a whole but where there is a higher motivation to act.

(2) There are charities whose aim is general economic development by small projects (my personal favorite would be Christian Aid). No less worthily, many people look at the improvements in the last three decades in South America where nasty military junta have given way to democracies with economic growth and wonder how to achieve similar improvements in the economy in the African continent. Now with these charities economic measures are useful. For small projects this is easy: they can look at the change in economic circumstances from giving microloans and measure them in economic terms. We can also measure our economic impact: not just from where we use training and microfinance to improve the situation of a family where break up from poverty is a threat, but the improvement in education level of children as a result of our care improves their economic countribution to a country and SOS medical care saves economically active lives. We are happy to see the positive economic impact, and do quite well on this approach but we were originally motivated by helping the children.

(3) There are charities whose aim is general economic development (say "elimination of poverty") through larger scale intervention and major projects. There is sometimes a slightly starry eyed idealism to these. Governments tend to like these, and they tend to get lots of state support as well, but it is hard to judge the large scale projects without a lot of subjective analysis. Say an a government Aid organisation provides financing for Vietnam to expand its coffee production rapidly does this help? Not if it triggers a bloody civil war in Cote d'Ivoire from the collapse in coffee prices. Say a charity is successful in getting VAT taken off school books in an African country, does that help? Well maybe but the question is whether the tax forgone means a minister loses his Mercedes or whether they employ fewer teachers as a result (those of us who know Africa know the likelihood of a minister foregoing his Mercedes). On paper the econonic impact of the big ticket items often looks better than an assembly of small projects but there are some serious commentators like Dambisa Moyo who question whether such large scale aid has actually done more harm than good in total.

(4) There are other figures and targets used. For example is "number of beneficiaries" of itself a good target or boast? People sometimes talk of children being lifted from gutter to pavement before slipping back again, but perhaps the donor does not mind whether the change is in any way sustainable. Clearly spreading impact thinly is "fairest" but also realistically it is least likely to lead to any sustainable change and most likely to have no lasting effect. But at the very least if you simply target reaching a huge number of beneficiaries you are unlikely to fail; we could even include a few million children who have used the schools wikipedia at a cost to us of a fraction of a penny each.

So where does this leave us choosing a charity.

My advice is

(a) decide what you care about children, families, old people, education, happiness, quality of life, health care

(b) find five charities who seem to care about the same thing as you, not just in their adverts but in the way they approach their work

(c) choose the one which wastes the least on self promotion, fundraising, administration. Unless you really think that a part of what you want is more people understanding their cause, include "advocacy" as a part of fundraising.

Good luck!