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Introduction

How ALMA Evaluates Nonprofits

There's no single measurement for picking the "best" nonprofits. Although some sites will try and rank charities based only on their financial reports, we think this is limited and unhelpful. So we use a combination of factual evaluations of their impact and financials with a look at their mission, their endorsements and values.

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Overview

At ALMA, curating funds comes in three steps:

  1. Determining the goal of the fund
  2. Finding the most effective strategies
  3. Evaluating nonprofits with three key questions

For each fund, we start by understanding the issue, eg. homelessness, education, the environment, etc. We dive deep into each issue to understand the root causes and the audience we want to serve.

We meet with experts in the space who provide their points of view on how the problem can be solved, and what they believe are the most effective strategies.

Once we've refined the goal of the fund and the strategies, we begin to evaluate nonprofits in the space, using the following three key questions...

Why does this organization exist?

First, we begin by asking ourselves why this organization exists. This is the most subjective assessment, and largely anchored in our selection of strategies.

Evaluation questions:

Is the nonprofit offering valuable solutions to a worthwhile problem/issue? There are plenty of nonprofits doing great work that don't address the root problem or solution that the fund is focused on.

Does this organization make the community better? Do we believe this organization is focused on a valuable solution to an important problem? Do the recipients of the organization's work see the value?

Is there a clear mission statement? We look for stated mission statements that are specific, measurable and achievable.

How does this nonprofit advance towards its mission?

This where we evaluate how the nonprofit bridges from its mission to its output.

Evaluation questions:

Does this organization operate in a sound matter? We look for organizations with strong teams that invest in their people. We look for fiscal responsibility, ensuring a healthy spend on infrastructure, growth, and their team. While people fear that nonprofits spend too much on marketing, we worry they often don't spend enough.

Does this organization value transparency? Here we evaluate if the nonprofit is transparent and proactive in sharing their public financials, such as their latest 990 filings and annual reports.

Is this a well respected organization? For this, we evaluate if the organization is endorsed by the public, nominated by experts or awards, or has high ratings scores on other platforms.

Is this organization capable of receiving incremental funding? Will support from the ALMA community be valuable? Is this organization prepared to grow?

What does this nonprofit do?

Finally we look at what the nonprofit is contributing by measuring the actual program work of the organization. Is the output clear and measurable?

Evaluation questions:

Is there evidence in the effectiveness of this organizations outputs?

  • Is it tangible? Is it something that can be measured?
  • Is it credible? Do other people believe the organization's outputs are making a difference?
  • Is it valuable? Do people endorse this organization's output as a worthwhile output?

The ALMA approach

A spotlight on smaller charities We aim to shine the spotlight on a handful of nonprofits that need help growing. We want lean towards nonprofits that haven't invested heavily in fundraising/brand/growth, and need a hand.

We'll be able to make an impact We want to know that we're able to make a meaningful difference to the nonprofit. We'd rather contribute $10K to a nonprofit with a $1M budget than a $100M budget, so long as their capacity for growth is clear.

Growth oriented We also lean towards nonprofits that demonstrate a desire to grow. While many nonprofits can accommodate additional funding, do they want to? Are they prepared for growth?