Scrutiny and analysis: there is no way back

By John Copps 12 August 2009

Over the last decade, there has been an upsurge in information and analysis produced on charities and philanthropy. This seems to have happened worldwide – with organisations as far as Midot in Israel and Charity Ratings in Sweden, as well as new and established organisations in the US, such as Guidestar, GiveWell, Charity Navigator and the Center for Effective Philanthropy. NPC is proud to be part of this trend.

Without these organisations the world would be worse off. Together we have succeeded in providing a long-overdue challenge to the received wisdom, encouraging donors to become more discerning, and influencing the way charities are run. Greater scrutiny of good causes is now becoming accepted, and the language of outcomes and impact is commonplace among charities. As the Charity Commission [the UK government body that regulates charities] recently declared ‘organisations providing information about and analysis of charities are an important part of increasing transparency and accountability to the public, and can help make charities more effective’.

But this fledging industry faces its challenges, especially as the global recession bites.

Earlier this week, NPC struck a deal to take over the charity Intelligent Giving. Intelligent Giving runs a website that provided an up-to-date transparency ratings for the biggest 500 UK charities. It uses publicly available data to tell us how open charities are, and how good they are at telling us what they do. It is small but punches above its weight. But despite its valuable work, it struggled to sustain itself.

One thing that this tells us that the ‘market’ in analysis is yet to mature.

And there are worrying signs that this is not an isolated case. In the UK, the Charities Aid Foundation has apparently stopped producing its analysis of the top fundraising charities. In the US, the donor advisory service Geneva Global has dramatically cut its staff since 2007. NPC knows from experience the difficulty of being in this market and producing public knowledge.

We cannot let these setbacks curb the overall momentum and what has been achieved over the last decade. They must be a temporary blip and not part of a trend.

To do this, organisations must widen their base of support until the industry establishes itself and develops a sustainable business model. This isn’t easy and some parts of the world are ahead of others (it is telling that NPC’s two most committed institutional supporters are both foundations outside the UK – the William and Flora Hewlett Foundation in the US and the Bertelsmann Foundation in Germany).

For all those funders that think scrutiny, analysis and criticism is important, now is the time to act. Having started on the pathway to a transparent, self-critical and, let’s hope, better charitable sector, we cannot afford to go back.