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Nonprofit Assessment: Examining Nonprofit Assessment Methodology Towards the Development of a Holistic Assessment Framework University of Pennsylvania ScholarlyCommons Social Impact Research Experience (SIRE) Wharton Undergraduate Research 9-14-2020 Nonprofit Assessment: Examining Nonprofit Assessment Methodology Towards the Development of a Holistic Assessment Framework Alejandra Borda Follow this and additional works at: https://repository.upenn.edu/sire Part of the Business Administration, Management, and Operations Commons, Development Studies Commons, Growth and Development Commons, and the Nonprofit Administration and Management Commons Borda, Alejandra, "Nonprofit Assessment: Examining Nonprofit Assessment Methodology owarT ds the Development of a Holistic Assessment Framework" (2020). Social Impact Research Experience (SIRE). 81. https://repository.upenn.edu/sire/81 This paper is posted at ScholarlyCommons. https://repository.upenn.edu/sire/81 For more information, please contact [email protected]. Nonprofit Assessment: Examining Nonprofit Assessment Methodology owarT ds the Development of a Holistic Assessment Framework Abstract This paper explores the existing methodology used to assess nonprofit organizations. Across the literature, there is no consensus as to which is the most effective way to evaluate a nonprofit’s work. Different opinions exist as to which aspects of the organizations are most influential in achieving the most impact on beneficiaries. Nonprofit ve aluations allow organizations to determine areas where they are operating effectively and places where they can improve. It also will enable individuals to assess which organization to support and engage for donations to produce better outcomes. This will add to the current literature upon nonprofit ve aluation by bringing together already proven models and highlighting their most substantial aspects. A literature review, interviews with experts in the field and analysis of current charity review sites were conducted. Utilising this framework, I assess three nonprofits working towards economic inclusion. This will test its thoroughness and provide conclusions as to the aspects analysed that proved most influential ot achieve programmatic success and long term impact. Self- reported information, financial statements, third-party evaluations, and interviews with the leadership staff were conducted for the development of these assessments. Using a framework such as the one proposed will bring greater clarity for donors to choose what nonprofit ot support that will achieve the best impact and provide a source nonprofits can efr er to improve their operations. Keywords nonprofit organizations, economic inclusion, operations, resources, impact evaluation, livelihood development, poverty Disciplines Business | Business Administration, Management, and Operations | Development Studies | Growth and Development | Nonprofit Administration and Management This working paper is available at ScholarlyCommons: https://repository.upenn.edu/sire/81 Social Impact Research Experience (SIRE) Wharton Undergraduate Research 2020 Nonprofit Assessment: Examining Nonprofit Assessment Methodology Towards the Development of a Holistic Assessment Framework Alejandra Borda The Wharton School, University of Pennsylvania ABSTRACT This paper explores the existing methodology used to assess nonprofit organizations. Across the literature, there is no consensus as to which is the most effective way to evaluate a nonprofit’s work. Different opinions exist as to which aspects of the organizations are most influential in achieving the most impact on beneficiaries. Nonprofit evaluations allow organizations to determine areas where they are operating effectively and places where they can improve. It also will enable individuals to assess which organization to support and engage for donations to produce better outcomes. This will add to the current literature upon nonprofit evaluation by bringing together already proven models and highlighting their most substantial aspects. A literature review, interviews with experts in the field and analysis of current charity review sites were conducted. Utilising this framework, I assess three nonprofits working towards economic inclusion. This will test its thoroughness and provide conclusions as to the aspects analysed that proved most influential to achieve programmatic success and long term impact. Self-reported information, financial statements, third-party evaluations, and interviews with the leadership staff were conducted for the development of these assessments. Using a framework such as the one proposed will bring greater clarity for donors to choose what nonprofit to support that will achieve the best impact and provide a source nonprofits can refer to improve their operations. Keywords: nonprofit organizations, economic inclusion, operations, resources, impact evaluation, ​ livelihood development, poverty Disciplines: Business, Social Impact, Nonprofit Administration and Management, Economic Growth and ​ Development, Social Change, Organizational Studies. Nonprofit Assessment: Examining Nonprofit Assessment Methodology Towards the Development of a Holistic Assessment Framework Alejandra Borda ([email protected]) ​ ​ Professor Jose Miguel Abito, Assistant Professor of Business Economics & Public Policy ([email protected]) ​ ​ Wharton School of The University of Pennsylvania Discipline(s): Business, Social Impact, Economic Development, Social Change, Organizational Studies. ABSTRACT 2 INTRODUCTION 5 Effective Giving 5 How funding affects the organizational capacity 7 Overview of the research 8 SECTION 1: An analysis of current framework methodologies from scholarly work, charity review sites and insights from industry experts 10 Literature Review 10 Charity Review Sites 12 Nonprofit Evaluation Framework 22 SECTION 2: Analysis of three nonprofit organizations 24 METHODOLOGY 24 NONPROFIT #1: Trickle Up 30 NONPROFIT #2: iDE (International Development Enterprises) 46 NONPROFIT #3: Five Talents 66 FINAL REMARKS 78 Limitations and potential gaps in the research 79 REFERENCES 81 INTRODUCTION Globally, close to 734 million people remain living under the poverty line of $1.9 a day.1 According to the world bank, the reduction of poverty has slowed down or even stopped altogether. Achieving economic development is highlighted as a critical target for many organizations and foundations worldwide. Financial inclusion programs are widely accepted as an essential intervention to end poverty. "End poverty in all its forms everywhere." is the #1 Sustainable Development objective set by the United Nations.2 Financial Inequality amongst populations is shown to be the main obstacle poor communities need to overcome; hence the main issue many organizations worldwide aim to eradicate. Thus, financial inclusion programs are amongst the most effective approaches to lift people out of poverty. These increase beneficiaries' skills, earning opportunities, connect them to markets and value chains, therefore, improving their livelihood and quality of life. As stated by Michal Rutkowski, Senior Director of the Social Protection and Jobs Global Practice at the World Bank, the successful implementation of economic inclusion interventions is a big priority in the World Bank's Agenda. This research focuses on interventions aimed at lifting extreme and ultra-poor populations out of poverty. Interventions such as microfinance, graduation approaches, livelihood development programs, savings groups, social protection, mobile data and access to markets have shown substantial results at improving beneficiaries' income and lifting them out of poverty. Studies performed by Innovations for Poverty in Action, The Ford Foundation, The World Bank, J-Pal, amongst others have analyzed the implementation, variables, effects, and ultimately impact of economic inclusion programs performed by a wide range of organizations. Although many successful initiatives have been implemented, more work is yet to be done to achieve a decrease in the poverty gap. Effective Giving With $449.64 billion worth of donations in 2019 just in the US3, if the donations were channelled to scale and implement the most successful approaches, this gap could be reduced at a faster rate. A thorough and efficient way to determine which organizations are performing the best work might help direct donations towards better outcomes. A study performed by Give.org in 2019 based on 2100 adults surveyed,4 shows that 69.9% of respondents placed high importance on trusting a charity before giving, yet only 19% trust charities. Another study performed by CHOICE shows that even though 90% of respondents wanted to know the outcomes their donations achieved, 81% did not know this information. On average, only half of the donors perform any kind of research related to areas such as impact, reputation, operating costs, mission and services, executive salaries, funding resources, amongst others.5 1 Overview. (n.d.). Retrieved from https://www.worldbank.org/en/topic/poverty/overview 2 Goal 1 | Department of Economic and Social Affairs. (n.d.). Retrieved from https://sdgs.un.org/goals/goal1 3 Charitable Giving Statistics. (2020, July 22). Retrieved from https://www.nptrust.org/philanthropic-resources/charitable-giving-statistics/ 4 2019 donor trust report (Rep.). (n.d.). Give.org. Retrieved June 15, 2020, from ​ ​ https://give.org/docs/default-source/default-document-library/2019-donor-trust-report.pdf. 5 Rovner, M. (2018, April). The Next Generation of American Giving (Rep.). ​ ​ ​ doi:https://institute.blackbaud.com/wp-content/uploads/2018/04/2018-Next-Generation-of-Giving.pdf?mkt_
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