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What Is Nonprofit Evaluation?

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  • Written By: Jim B.
  • Edited By: Shereen Skola
  • Last Modified Date: 29 August 2016
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A nonprofit evaluation is an analysis of the operations and fund-raising efforts of those organizations that are deemed nonprofits. These organizations donate a large portion of the funds that they receive to charities and other worthy causes. Just like corporations that intend to make profit, nonprofits must take an occasional overview of their organizations to see if they are operating at their maximum efficiency and getting the most out of their fundraising efforts. It is often wise for such an organization to have its nonprofit evaluation done by a third party like a consulting firm to ensure that objectivity is maintained throughout the process.

Although it may not seem like it, it is just as important for a nonprofit organization to operate at its highest potential as it is for a moneymaking corporation to do so. Those large corporations often take the time to evaluate their operations to see where their strengths lie, what they can do to improve, and how they should evolve in the future. Since a nonprofit organization often has to answer to a board of directors in terms of the money that it raises, a nonprofit evaluation is extremely useful.

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There are certain key points that must be addressed by a nonprofit evaluation. In addition to the obvious examination of strengths and weaknesses, nonprofits have their own unique set of problems and opportunities which must analyzed. For instance, the relationship of donors to a nonprofit must be cultivated. Costs must also be kept at a minimum, both in terms of hiring employees and organizational maintenance, so that the bulk of fundraising efforts can go to the charity of choice.

Conducting a nonprofit evaluation requires a thorough look at all aspects of the organization. Financial records are a concrete source of information to show how well a nonprofit is raising money. Just as important is how the public perceives the organization, both in terms of the amount of people aware of it and their feelings about the charity. Focus groups and surveys are good ways to measure the temperature of the public concerning a specific nonprofit.

While it is possible for an organization to conduct a nonprofit evaluation on itself, it is not advisable if the nonprofit wants the correct answers. This is because executives that might be causing the problems with an organization might not be willing to point the figures at themselves. For that reason, it is a good idea for nonprofits to hire some sort of outside source for evaluation. Consulting firms that specialize in the examinations of nonprofits might be costly, but their advice can pay off in the long run.

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