What makes an effective nonprofit? The Association of Small Foundations recently released a report highlighting five key areas that should be considered by foundations as they evaluate prospective organizations for funding. Keep these criteria in mind when writing your proposals or meeting with donors:
1. Clear mission and purpose. The most fundamental quality of an effective nonprofit is clarity about its mission—both what it seeks to accomplish and why this purpose is important.
2. Ability to perform key functions. How well do you communicate your vision? Do you engage stakeholders? Are you tracking outcomes? What’s your plan for the future?
3. Strong practices, procedures, and policies. Donors should consider the following:
- Financial—Is there solid fiscal management? What does your 990 look like? Is there a diverse range of funding?
- Governance—Is there strong and active leadership? Are board meetings scheduled and attended? Who’s on the board?
- Organizational and Program Development—Is there a strategic plan in place and is it being used? Is the organization recognized as an institution; it is not identified solely with one or two individuals who work there?
4. Good people. Above all, nonprofits depend on one key resource to fulfill their missions: qualified, skilled, and talented board members, staff, and volunteers.
5. Ability to mobilize others. How well do you engage volunteers, other nonprofits, businesses, and government agencies in addressing the root causes of problems and bringing about long-term change?
This report also offers great tips on performing due diligence. Read more to find out what prospective donors are looking for when they review your financials, call up your executive director, or stop by for a site visit.