Charity Evaluation

We independently evaluate charity programs based on our investigation of expected and, where feasible, actual results realized by beneficiaries relative to program costs and risks (i.e., SROIs) and other factors.  We currently have the capacity to offer this service for free to several funders.

Current Recommended Charities

SMI maintains lists of evaluations of charities and charitable programs we have completed to date.  We make these available to people with whom we have a relationship for use in informing their funding decisions or in benchmarking SROI levels by service suppliers.  We are not ready to publish this list on our website.

Consider also reading our response to FAQ - Are there any charities you recommend giving to at present?

Our Methods and Criteria

SMI has been developing an approach to evaluating charities based on the value created for intended beneficiaries relative to program costs and risks and also on factors affecting the organization’s capacity to create value going forward.

We aspire to be the equivalent of a stock valuation analyst or ‘ratings agency’ for charities, which reports on past performance on investments in the evaluated organization (in SROI terms).  The analyst informs funders of the “bets” on likely future results (for the poor) they are making should they fund the organization.  We aspire to be part of a group of credible suppliers of this information.

We look for charities (and often individual projects within them) we can reasonably recommend to non-expert donors and/or to more sophisticated funders or grant-making institutions, based on the following criteria.

  • Cost-Effective Value Creation

We seek out opportunities for donors to create significant value in terms of meaningful changes in the lives of identifiable disadvantaged people at relatively low cost and risk.  Available estimates of a program’s cost-effectiveness inevitably will involve significant uncertainty and approximation.

We will address this explicitly and highlight where efforts have been taken (or have not been taken) to reduce this uncertainty.  We place significant weight on ex post estimates of cost-effectiveness (over ex ante estimates) because we think these should matter the most.  We also will examine and address risks of non-performance and non-success.

  • Capacity for Further Funding

Will the evaluated program productively use further funding for the program(s) evaluated and will the charity report when funding is no longer required for the specific purpose identified in requests for funding?  Our cost-benefits assessments of charitable programs often provide us insight into how much funding a program productively can use and still achieve optimal SROIs for disadvantaged clients.

  • Transparency and Accountability

Our evaluations depend on charities providing sufficiently detailed information for us or others to assess the cost-effectiveness of their programs.  This means information (or access to allow us to obtain information) on achieved results and their values and progress made toward achieving them and toward reducing risks of not obtaining intended results.

We recommend the use of results guarantees, financial incentives to beneficiaries, charity staff and the charity itself to facilitate the collection of this information.  In addition to cost-effectiveness information, we commend charities to be transparent about other criteria listed here, so that we and other donors can make reasonably reliable assessments.  Possible conflicts of interest (for instance, with funders, grantees or program beneficiaries) should be listed.

  • Documented Track Record of Integrity and Productivity

Charities must have a proven record of integrity and productivity and/or enter into an enforceable contract to truly use the donated money wisely and for the intended purpose.  Any organization that can make a compelling case of its cost-effective impact will be considered for an evaluation (and SMI recommendation) even if its proposal does not meet one of the criteria above. 

We invite organizations to respond to our evaluations and we agree to consider these responses and whether they should be published (if our original evaluation was published) and revise our conclusions, where appropriate.  We do feel, as a general rule, non-expert or retail donors might want to avoid experiments or new initiatives similar to those venture capitalists fund in financial markets.

However, we think it valuable to find ways to allow non-expert donors reasonable access to these giving opportunities, using approaches like those used in financial markets.  One option is for retail donors to contribute to a portfolio that includes some of these projects built and managed by independent professionals, using criteria similar to those used for financial investments.