©New Philanthropy Capital 2006

This document is confidential and intended solely for the use of the individual or entity to whom it is addressed

Funding successNPC’s approach to analysing charities

Cathy Langerman

March 2007

2©New Philanthropy Capital 2006

What is New Philanthropy Capital?

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

3©New Philanthropy Capital 2006

Why does NPC exist?

Source: The UK Voluntary Sector Almanac 2004 (NCVO)

Number of charities and total income by size of charities (2003-4)

39 %

of income

goes to

just

0.15% of

charities

0-£100k £100k-1m £1-10m £10m+

£1.8bn

£4.9bn£6.0bn

£8.0bn

0

2

4

6

8

£10B

Total income to charities

Charity income

0-£100k £100k-1m £1-10m £10m+

134,513

15,7852,167 232

0

50,000

100,000

150,000

# of charities

Charity income

4©New Philanthropy Capital 2006

Our vision is to create a more efficient market

Today:

• Funding based

on brand inertia

• Some donor

concerns on

results

Vision:

• Better funding

for effective

charities

• Greater donor

confidence

and reward

Research into results

‘Investment’ analysis and feedback

Expert advice on strategy and execution

5©New Philanthropy Capital 2006

Examples of return that NPC might highlight for donors

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

£250,000 could pay for

Training one school leaver

Requalification support for 18 refugee doctors

Cost and impact of tribunal appeal on special education needs

£270

£3,000

Cost of legal support Average support secured

6©New Philanthropy Capital 2006

So how does NPC analyse charities?

E3. Assess organisational capacity to deliver results

A. Defineissue or sector

B. Identify range of needs and approaches

C. Define sampleof charities

E. Analyse each charityF. Build balanced portfolio of NPC charity recommendations

E5. Summarise analysis:• Results• Risks• Capacity

E2. Assess evidence for these results

E1. Identify activities and their results

E4. Assess risks threatening these results

NPC research process

NPC charity analysis process

D. Visit each charity

7©New Philanthropy Capital 2006

It’s all about results

Funding ResultsActivityCapacity/

Resources

RisksResults

not achieved

Effectiveness and success are based on:

Results (what we really care about) Risks (inevitable, but manageable) Resources (important, but not the whole story)

8©New Philanthropy Capital 2006

How do we think about results?

Breadth(number of individuals affected)

Depth (impact on each individual)

Change (tackling causes/systemic change)

9©New Philanthropy Capital 2006

What if results haven’t been measured?

Build up a picture from all available evidence

Logicalmodel

Demand

Research

User feedback

Evaluations

Outcomemeasurement

Similarexperience Richness of data

Increasing availability

10©New Philanthropy Capital 2006

How do we measure risks?

Strategy& Concept

Management

Finances

Operations

External

Charity risks

• a• b

• c• d

• e• f

• d• g

• h• i

Mitigating factors

11©New Philanthropy Capital 2006

How do we measure capacity?

Strategy& Concept

Operations

Finances

Unmet need

Vision

Theory of change

Growth

Replicability

Philosophy

Governance

Leadership

Programme mgt.

User involvement

Measurement

Collaboration

e.g.

e.g.

e.g.

Reserves

Financial health

Funding sources

Funding diversification

Fundraising difficulty

Operational efficiency

12©New Philanthropy Capital 2006

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©New Philanthropy Capital 2006

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©New Philanthropy Capital 2006

From single charities to portfolios

Society

Organisations

& Policy

Community

Individual

& Family Typically higher depth, lower breadth

Typically higher breadth & change, lower depth

Reach

Cer

tain

ty o

f res

ults

15©New Philanthropy Capital 2006

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©New Philanthropy Capital 2006

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