It is extremely difficult to select individual stocks that increase our net worth. This is true even though we examine financial statements, annual reports, online ratings and financial magazines before making our decisions. A monkey has even done better than many of us at picking winners.
If it is tough predicting the future performance of a single for-profit corporation using financial information, why do we think only evaluating financial statements of nonprofit organizations is the best way to select charities to donate to? They do not have a purpose to generate a financial profit. However, they do have a purpose to make an impact by furthering their mission.
Consider some of these additional factors when picking your next “winning” nonprofit organizations:
- Level of impact
- Cause, mission and strategy
- Reach (local, national, global)
- Quality of the staff and board
- Involvement and treatment of volunteers and donors
- Ethics/values of the organization
- How they work with businesses, other nonprofits and government
What factors can you add to this list?