How is charity effectiveness evaluated?


Quick Answer

Charity effectiveness is evaluated in two prime areas, the financial strength of the charity and its transparency and accountability. The financial strength of a charity includes its effectiveness in meeting its financial goals, as well as its ability to work towards its stated purpose. Transparency is a look at how open the decision-making and activities of the charity are, while accountability is a study of the ways a charity is held responsible for the funds it controls.

Continue Reading

Full Answer

Financially, charities that can sustain operations until goals are met and considered financially strong. The most effective charities, however, are those that provide the highest rates of returns on donations. The highly effective charity uses as much of the donated funds as possible to work towards its stated goal. Less effective charities often use more of the donated funds to cover overhead than it does in operations, including administrative costs.

Transparency allows donors or watchdog organizations to see the inner workings of a charity. This is the key to evaluating the effectiveness of that charity. It also allows for greater accountability of the charity, opening it up to criticism if there is a misuse of funds, which can directly affect the charity's ability to continue operations.

Learn more about Business & Finance

Related Questions