NPC believes that you should care about the measurement of charities’ results, because you should aim to fund charities that achieve excellent results. You can think about measurement of results in terms of:

• The results of each of the charity’s activities
• The risks threatening the achievement of these results
• The capacity to sustain the delivery of these results

For more detail on each of these factors see our report Funding success.

NPC suggests the following general principles when thinking about how to give to charities:

• Pro-active selection of charities based on results: Support charities that are achieving excellent results for the people they help, rather than charities that have the most effective and professional fundraising teams or the lowest administrative costs. All organisations need administrative costs in order to be effective, and low administrative costs may in fact be a sign of an inefficient organisation.
  
  
• ‘Light touch’ engagement with charities: We recommend that you minimise the demands on the time and resources of the charities you fund. In practice, this means not imposing arduous reporting requirements and limiting visits and contact with charities. A range of different levels of engagement may be appropriate, depending on your objectives.
  
  
• Funding organisations, not projects (unrestricted giving): As a donor, it is tempting to stipulate that a grant can only be used for a particular project, because this makes it much easier to see the direct impact of the donation. However, we believe that this can limit the impact of the donation. Firstly, it may cause charities to propose projects that meet the donor’s objectives, but which stray from their core mission. Secondly, if circumstances change, charities are unable to respond. We believe that the charities we recommend can and should be trusted to make decisions in the best interests of the people they help. In general, we recommend that you fund organisations, not projects. Practically, this means giving unrestricted funding.
  
  
• ‘Just right’ donations – not too big, not too small: Judging the right size for a donation to a charity is an art, not a science. If a donation is too big, there is a risk that rapid growth will create significant organisational problems, particularly when the donation runs out. If it is too small and you require a charity to go through application and reporting processes, the administrative burden may outweigh the benefit of the donation. Of course, small donations with no strings attached are always welcomed by charities. Our researchers work with charities to understand their financial needs, and recommend a suitable size for a donation. In general, we work on the assumption that contributing more than a third of an organisation’s annual income may create problems. However, if a charity is looking to grow significantly and it has a robust strategy for growth, a larger grant may be entirely appropriate.
  
  
• Multi-year support: We recommend that you should provide multi-year support for charities, rather than giving them a lump sum in a single year. Choosing the right length for a grant depends on the specific case – as a guide, grant-making trusts often give three-year grants. Multi-year support gives charity leaders the opportunity to make long-term plans to improve their organisations. They can also build projects that will create and sustain improvements in the lives of the people they help. As the donor, it will allow you to build longer term relationships with the charities, if you wish.
  
  
• Funding measurement: Because of the widespread lack of funding for measurement and performance management, we believe that you should consider allowing a proportion of your giving to be dedicated to building this capacity among charities selected for support.

For more information on evaluating charities see NPC's report - Funding success.