In last week's post on nonprofit due diligence, we discussed how conducting nonprofit due diligence on a potential grantee is a unique process for each philanthropist. While the research needed to answer, “Should I invest in a particular nonprofit organization?” will vary according to your specific situation, organizing your research into four categories—strategy and results, leadership, financials, and organization and operations—may help you make the best use of your time. This week we are focused on the first category—strategy and results.
Learning about the organization’s strategy will tell you who (or what cause) the organization serves, what its goals are, and how it intends to accomplish those goals. A nonprofit’s mission may be broad and inspiring, but its strategy will tell you whether its leaders are actually willing to make tradeoffs by focusing on something achievable. You will also learn how the organization works with others—through partnerships or other collaborative efforts—to accomplish its broader goals. Your research into strategy will help you uncover a nonprofit’s program design, which will give you insight into how your philanthropic strategy fits in with its work. You will also learn about the results the organization is getting (its program effectiveness). And you will learn how focused the organization is on improving its results—or the extent to which the nonprofit is collecting data about its program, and whether it’s using this data to improve the program.
Consider asking the following eight questions about a nonprofit’s strategy and results, organized into two categories. If you’d like a longer list of questions, or for more detail, see the links below.
What is the organization’s mission and strategy?
- Does the organization’s strategy resonate with your vision and what you care about?
- How has the organization defined the problem it is trying to solve?
- Has the organization matched its goals to its approach to achieving them?
How effective are the organization’s programs?
- What evidence of its outcomes does the organization have?
- Does the organization have support from external experts in the field?
- Does the organization have a clear definition of success?
- What metrics does the organization track to know if it is succeeding?
- How does the organization use the data it collects to learn and make decisions?
What questions do you ask when researching a nonprofit’s strategy and results? Do you have any to add to our list? Any you think aren’t useful?
For more, consider the following resources: