Charity analysis

Funding success: NPC's approach to analysing charities

Martin Brookes, Cathy Langerman & Tris Lumley

December 2005, 41 pages

An updated version of NPC's approach to analysing charities can be read in The little blue book.

NPC believes that the aim of charitable giving is to benefit society. Given this aim, we work hard to identify charities that produce excellent results. This is not straightforward – there are theoretical and practical barriers to measuring the results of charitable work. We take a flexible approach to analysis, incorporating as much data on results as is available. We also ensure that our analysis takes place within the context of in-depth research into the relevant social issues.

Good charities achieving (or with the potential to achieve) impressive results deserve funding. Such funding can help to deliver further results in the future. This is a premise of NPC’s research. It is not the reality at present for too many charities – funding is not generally connected to results. Ultimately, we analyse charities because we make the assumption that some are better than others at delivering results. With almost 170,000 charities in the UK, there is huge variation in the social returns available.

Funding success describes our processes of research and analysis, in the interests of transparency both to donors and charities. It explores some of the challenges facing the charitable sector. It also introduces the concept of a balanced portfolio – a group of charity recommendations that together address the needs identified by an NPC research report.

NPC’s analytical framework is far from complete. But it is now comprehensive enough to underpin our approach to researching and analysing charities. As a foundation of NPC’s work, we hope that it will help charitable donors to ensure that they are funding success.