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Eighty per cent of people do not know how much of their last donation reached a charity’s beneficiaries after fundraising costs and overheads were subtracted.

There is a widespread belief that charities who spend a higher proportion of the funds on administration are less worthy than those that have low overheads.

The Impact Suite Co-founder, Darren Howlin, said that a charity’s efficiency should not be determined solely on their spending.

“It is better to pay attention to other performance criteria: transparency, governance, leadership and impact, as well as cost,” Darren said.

“Often information about administrative costs is not comparable and often misleading.

Darren suggests five key factors to determine how much of an impact a charity is making.

  1. Purpose

All charities registered with the ACNC must have a charitable purpose, which outlines the reason a charity has been set up and what is activities work towards.

Darren said that an organisations’ purpose helps people running the charity and others to understand why the charity does what it does.

“The purpose outlines what outcomes your charity wants to achieve, how it will achieve these outcomes, who will benefit from these outcomes and where the benefits extend from,” Darren said.

“The purpose should be clear, precise and easy for people outside of the organisation to understand,” he said.  

  1. People

Darren said that people are a charities most important asset and therefore, donors should consider those volunteering and employed by the organisation and their skillset.

“To be more efficient and work smarter you must have the right people doing the right things,” Darren said.

“Leadership is vital in any organisation,” he said. “With charities, it is sometimes even more crucial given the constraints on funding and the number of volunteers wanting to help.

“The Board need enough of a (skills) mix to cover off on fiduciary issues, but also other skills relevant to the organisation which may include sector specific knowledge or new skills like digital marketing.”

  1. Process

Darren said that a combination of “people” plus “process” is the ultimate determinant of performance.

“You can take great people who are highly skilled, but put them in a poor process and the process will win every time,” Darren said.

“Processes should be efficient; driving out waste, and effective; achieving better outcomes for your beneficiaries.

“Some organisations (for instance) have boards that don’t meet, or meet infrequently. How can they offer the proper oversight an organisation needs?”

“Good processes are flexible, agile, responsive and quick to address beneficiary needs,” he said.

  1. Impact

Every charity has a mission that is associated with producing a public benefit. The changes produced in individuals and their communities, based on the organisations’ actions, can be referred to as the charity’s ‘impact’.

Darren said that to analyse impact, questions should be asked like:

  1. Is it clear what the charity was trying to achieve and how its activities worked towards its objectives?
  2. Did the charity collect and communicate useful information about how well it is achieving these objectives?
  3. Does it seem like this charity is responding to the information and feedback they are receiving?

 

  1. Review

Darren said that a charities reporting should be clear, consistent and comparable.

“With donors wanting to give their hard earned money responsibly, they also want to know that their charity is doing the best it can.

 “A charity that has an efficient and effective review process has a consistent and professional approach to managing the organisation.

“For instance, reviewing the skills and make up of people in your leadership is key to improved practices. 

The Impact Suite is an online platform which allows people to measure and compare charities, by analysing the five key factors: Purpose, People, Process, Impact and Review.

“The Impact Suite can help you determine which organisation meets your charitable intent, and that your donation is distributed to where it is needed most.” Darren said. 

Visit www.theimpactsuite.com.au  and donate with certainty today.