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Funding success NPC’s approach to analysing charities

Funding success NPC’s approach to analysing charities. Cathy Langerman March 2007. NPC helps donors give more effectively. Published research Understand needs Identify funding gaps Highlight excellent charities. Tailored advice Develop giving strategy Select charities

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Funding success NPC’s approach to analysing charities

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  1. Funding successNPC’s approach to analysing charities Cathy Langerman March 2007

  2. NPC helps donors give more effectively Published research • Understand needs • Identify funding gaps • Highlight excellent charities Tailored advice • Develop giving strategy • Select charities • Manage their grants What is New Philanthropy Capital?

  3. # of charities 150,000 134,513 100,000 50,000 15,785 2,167 232 0 0-£100k £100k-1m £1-10m £10m+ Charity income Total income to charities £10B £8.0bn 8 £6.0bn 6 £4.9bn 4 £1.8bn 2 0 0-£100k £100k-1m £1-10m £10m+ Charity income Why does NPC exist? Number of charities and total income by size of charities (2003-4) 39 % of income goes to just 0.15% of charities Source: The UK Voluntary Sector Almanac 2004 (NCVO)

  4. Research into results • Vision: • Better funding for effective charities • Greater donor confidence and reward • Today: • Funding based on brand inertia • Some donor concerns on results ‘Investment’ analysis and feedback Expert advice on strategy and execution Our vision is to create a more efficient market

  5. 1,000% return from a special education charity One in six children in the UK has special education needs Parents often need legal support to secure additional support 6,000% return from a refugee charity One in four refugees in the UK was a professional in their home country Many need help requalifying but possess valuable skills Cost and impact of tribunal appeal on special education needs £3,000 £270 Cost of legal support Average support secured Examples of return that NPC might highlight for donors £250,000 could pay for Training one school leaver Requalification support for 18 refugee doctors

  6. So how does NPC analyse charities? A. Define issue or sector B. Identify range of needs and approaches C. Define sample of charities D. Visit each charity E. Analyse each charity F. Build balanced portfolio of NPC charity recommendations NPC research process E1. Identify activities and their results E2. Assess evidence for these results E3. Assess organisational capacity to deliver results E4. Assess risks threatening these results • E5. Summarise analysis: • Results • Risks • Capacity NPC charity analysis process

  7. Funding Capacity/ Resources Activity Results Risks Results not achieved It’s all about results Effectiveness and success are based on: • Results (what we really care about) • Risks (inevitable, but manageable) • Resources (important, but not the whole story)

  8. How do we think about results? Depth (impact on each individual) Change (tackling causes/systemic change) Breadth(number of individuals affected)

  9. Outcomemeasurement Evaluations Increasing availability User feedback Research Demand Richness of data Similarexperience Logicalmodel What if results haven’t been measured? • Build up a picture from all available evidence

  10. Mitigating factors • a • b • c • d • e • f • d • g • h • i How do we measure risks? Charity risks Strategy& Concept Management Finances Operations External

  11. How do we measure capacity? Strategy& Concept e.g. Operations e.g. Finances e.g.

  12. NPC charity recommendations – Page 1 Summary information on results and funding need, risk etc. • Nature and scale of problem, eg • 1.8 million isolated pensioners live in poverty • 70,000 persistent truants from school • 400,000 women face serious domestic abuse • Description of organisation, eg • History • Approach • Breadth of work • Size and funding

  13. NPC charity recommendations – Page 2 • Results from work, including anecdotal, qualitative and quantitative data, eg • £1,000 pays for friendship for a disabled child • £350 helps woman facing domestic abuse • £10 in benefits advice secures £260 to alleviate poverty • Why NPC likes the organisation, including, • Management • Cost effectiveness of approach • Risk • Possible uses for extra funding • Brief description of organisation, including • Geographic focus • Growth • Turnover • Staff • Replicability

  14. Individual & Family Community Organisations & Policy Society From single charities to portfolios Reach Certainty of results Typically higher depth, lower breadth Typically higher breadth & change, lower depth

  15. What NPC’s methodology is and is not • NPC’s methodology is: • A means of structuring analyst’s judgements • A methodology to make NPC’s approach transparent to donors and charities • An attempt to provoke discussion on measurement and effectiveness • NPC’s methodology is not: • An objective tool for ranking charities • A performance management tool for charities • A global reporting standard • A complete due diligence methodology

  16. Questions? • More information available on www.philanthropycapital.org • The publication, Funding success: NPC’s approach to analysing charities, can be freely downloaded from the website • The report contains more detail on how we think about results and measurement. It also has more examples drawn from our experience. • The appendices contain each factor that NPC considers when analysing charities and indicators for each. • The appendices include a list of all the measurement, analysis and evaluation resources we identified and links to them. • I can be reached on clangerman@philanthropycapital.org

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