Why analyse charities?

The value of charity analysis: How reviewing your organisation can help you achieve more

Esther Paterson and Iona Joy

July 2011

Charity analysis is central to NPC's work. It underpins our advice to charities and funders, informs our research into topical issues in the charity sector, and in turn is informed by our in-depth research into social issues.

In this report, we asked 16 charities whose analyses we have published for their feedback, in order to be clear with ourselves and our audience about why charity analysis is useful. Three main benefits of analysis were evident from the report:

• Analysis informs, challenges and reassures. By identifying strengths and areas for improvement, analysis can both challenge and encourage charities in their work, and be used by the management and trustees as a tool for internal reflection and assessment. Charities told us that the process of being analysed by NPC was useful in itself, and our understanding of the context in which they work put the analysis in a helpful wider framework. Charities highlighted the value of receiving an independent view of their organisation from a 'critical friend'.

• Analysis prompts change. The internal reflection and assessment that analysis enables can prompt charities to make changes and improve their work. They can address weaknesses or gaps that are highlighted, and make informed decisions about resources and services. Ten of the charities we spoke to had made changes in their organisation as a result of our analysis, primarily in three areas: management, measurement, and strategy and planning.

• Analysis creates opportunities. Analysis can create good opportunities for charities, particularly when shared. Analysis had created opportunities for our 16 examples in three ways: attracting funding, improving communication and prompting collaboration. Its independence helped audiences, funders and potential partners to have confidence in the charity.

Read posts on NPC's blog about analysing a charity in two hours, why don't more people analyse charities?, how not to analyse charities, and keeping on with the quest for better analysis.